Steamboat Springs A policy supported by local developers could "defeat the whole purpose" of the city's affordable housing efforts, a city official said Tuesday night.
At a meeting of the Steamboat Springs City Council, debate flared as the council worked on proposed revisions to the city's inclusionary zoning and linkage ordinance, which regulates how the city provides affordable housing in Steamboat's increasingly expensive real estate market. The debate resulted from an "exit strategy" policy currently included in the ordinance.
City regulations already require developers to provide affordable housing units with a new development, as a percentage of the total units built. Those requirements could be increased with the new, revised ordinance, which the City Council could adopt as soon as June 5. But the exit strategy would allow developers to place affordable units back on the free market, if the units don't sell after 18 months from the time they are available - and if the developer pays the city a fee in lieu of providing affordable units.
Specifically, the exit strategy allows 12 months for a consumer to buy an affordable unit, and failing that, six months for either the city or Yampa Valley Housing Authority to buy the unit.
"I think an exit strategy is to the city's best advantage, because we have the option to buy (the unit) at a fixed price or take the cash," City Councilman Paul Strong said.
Some developers in Routt County have had difficulty selling affordable units, due to an unwillingness by consumers to take on the deed restrictions - such as an annual appreciation value capped at 3 percent - that make the home affordable.
"We're extremely concerned about the ability to sell these units," said Garrett Simon of the Atira Group, which is developing the Bear Claw III, or Edgemont, project on the slopes of Steamboat Ski Area. "If there isn't a demand, there's got to be a compromise."
The Atira Group also is the local developer for new projects at Ski Time Square and the current site of Thunderhead Lodge, which together form a large portion of the base area that was purchased April 26 by the Washington, D.C. firm Cafritz Interests.
City Councilman Towny Anderson said that to allow an exit strategy would violate an introductory statement in the housing ordinance that says affordable units should be "permanently protected community assets."
"I think this would defeat the whole purpose of the inclusionary zoning ordinance," Anderson said. "I can see the city and the Housing Authority having to either buy a lot of units, or just watch them go."
Anderson and Richard Levy, a member of the Steamboat Springs Planning Commission, expressed concerns that developers attempt to market affordable units at the highest price possible, with the intent of not selling them and, as Levy said, "taking advantage of the exit strategy."
Strong strongly disagreed with that concern.
"The only way for a developer to make money is to sell units," he said, citing the prohibitive costs of the fee to the city, and of having unsold units on the market for 18 months.
The City Council will continue its work on affordable housing issues June 5.