Steamboat Springs City officials could adopt a controversial affordable housing ordinance as soon as June 5, after taking a major step forward with the ordinance Tuesday night.
The Steamboat Springs City Council approved the first reading of a revised inclusionary zoning and linkage ordinance, which regulates how the city provides affordable housing in Steamboat's booming real estate market and will increase building requirements and fees for developers. The council previously tabled action on the ordinance on April 17, May 1 and May 15, after extensive debate and public comment at each meeting.
But Tuesday night, the council methodically moved through the ordinance's 16 pages before approving the first reading with a 4-1 vote. Council members Ken Brenner and Loui Antonucci were absent. Councilman Paul Strong cast the sole vote against the first reading, citing a clause that he said would place too heavy of a financial requirement on commercial developers.
The clause has to do with the ordinance's linkage policy. Linkage would require residential and commercial developers to compensate the city, either by a fee or by construction of affordable homes, for a percentage of the market-rate housing units or employees created by their new development.
The question is what that percentage, or "mitigation rate," should be.
The council lowered the mitigation rate for commercial developments from 15 percent to 10 percent, a figure that Council President Pro-tem Steve Ivancie called "a reasonable compromise."
"I still think the number is too high," Strong said. "I'll be voting against this whole ordinance because of that."
The difference between 15 and 10 percent is significant. According to figures prepared by city planning staff, the developer of a new, 50,000-square-foot commercial building that generates 140 jobs would be required - under a 15 percent rate - to provide the city with 10.7 housing units, or a fee of nearly $1.4 million. Under a 10 percent rate, the same building would require 7.1 affordable housing units or a fee of nearly $933,000.
Tuesday night, several developers and members of the construction community asked the council to lower the mitigation rate to 5 percent - or eliminate it altogether - saying higher costs will get passed on to the entire community.
"One of the largest line items in my estimates is already government fees and permits," said John Shively, president of the Yampa Valley Construction Trades Association. "This will raise the price of goods and services across the board."
The council also changed the ordinance by exempting all industrial uses from commercial linkage fees.
"Industrial uses are primarily big spaces that don't really generate job issues," City Council President Susan Dellinger said, citing warehouses as an example.
However, the council did not exempt institutional buildings or projects - such as future expansions of Yampa Valley Medical Center - from commercial linkage fees.
"For me, this is the toughest issue of the whole thing," Strong said.
The council's second and potentially final reading of the revised inclusionary zoning ordinance is scheduled for June 5.