Fourteen of the 47 units at First Tracks in the Wildhorse Meadows development are under contract.

Photo by Matt Stensland

Fourteen of the 47 units at First Tracks in the Wildhorse Meadows development are under contract.

First Tracks seeks input

Developers want OK for companies to own, rent affordable housing

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Developers of First Tracks, the affordable housing component in Wildhorse Meadows, are asking city officials to change the affordable housing rules to allow business owners to buy the units and rent them to their employees.

— First Tracks developers are puzzling about how to get buyers into lower-cost units, and they brought in business owners Thursday to talk about it.

The developer, Resort Ventures West, plans to ask the city to change its inclusionary zoning and linkage ordinance to allow employers to buy affordable units and rent them to workers, a practice not allowed under current ordinances.

About 14 of the first phase First Tracks at Wildhorse Meadows units are under or nearly under contract, and 33 remain on the market. All of the units targeted at people who make 80 percent of area median income have been sold, development manager Mariana Ishida told business owners at the lunch meeting.

Nancy Engelken, community housing coordinator for the city of Steamboat Springs, joined the group to discuss how to get people into affordable homes. It's challenging, the employers agreed.

"We have a lot of young people who would like to come work for us, but they can't afford the housing," said Kim Johnson, an owner of Wildhorse Salon. "To get them here, it's a nightmare. I had several people from Denver and Wyoming who were interested, but they backed out because they couldn't find housing."

The city's housing requirements focus on ownership, though the ordinance also covers rentals. The restrictions are based on area median income. Steamboat requires high-density residential developments to build or put money toward housing for people with lower incomes. The homeowners must earn 80 percent of their income in Routt County, Engelken said.

The city is focused on those who make 80 to 120 percent of the AMI: $42,400 to $63,600 for a single-person household.

Resort Ventures wants to eliminate the income requirements and home appreciation caps for housing units that employers buy and rent to workers.

"If you work in the county, you should be able to buy one of these and sell it or rent it to someone who works in the county," Ishida said.

At the lunch, Resort Ventures aimed to get feedback about businesses' housing needs. The company plans to present its amended ordinance to the Planning Commission next month. The City Council is scheduled to take up the issue in December. Engelken said she had not written a staff recommendation on the proposal.

Part of the issue, business folks said, is that different businesses have different housing needs. Patrick Delaney, of Steamboat Resorts, said his employees usually seek seasonal rental housing. Affordability is crucial, he said.

"A lot of our employees who've worked with us for years, because it's seasonal they don't make $50,000, $60,000, $70,000 a year," Delaney said. "They're more in the $35,000 or $40,000 range."

Prices are high for all types of residences, Engelken said.

"More and more, the market here, whether it be rental housing or ownership housing, the market is closed," she said.

Though they expressed concern about the issue, the business owners didn't provide clear direction for Engelken or Ishida.

Delaney said he thought employees needed more education on affordable housing. He said Steamboat Resorts was not eager to buy housing.

"All things being equal, if we have to - and only if we have to - we probably are interested in buying some rental units, and I think on a case-by-case basis, we are interested in helping some of our long-term employees obtain housing," Delaney said.

Engelken encouraged business owners to contact her through the city at 879-2060 if they would like her to provide information about housing options and rules.

"I want this to be a partnership with all of you to figure out how to make this work, because in inserting this provision to allow the employer-based purchase of a unit, it's important for you to say, 'This is what we need,'" Engelken told the group.

Comments

Steve Lewis 6 years, 2 months ago

The problem with the proposed change above is that the heavy lifting achieved by the ordinance is forfeited. The current ordinance creates a lower buying price that allows our teachers, policemen, and nurses to establish long-term stability and bonding within this community by owning their home. The above proposal would immediately relinquish that important gain, and trades it for a windfall (moving to free market value) for someone else, either the developer or the employer.

A better solution is evident here and demand for it is proven - the 80% AMI First Tracks units are all sold. First Tracks could sell the remaining affordable units by pricing ALL of them at the 80% AMI level or even lower. In fairness that means less income for the developer, so the developer should be allowed to deliver fewer units. City staff has elsewhere established an "equivalent benefit" formula that could measure how many less units Resort Ventures would deliver. The extra First Tracks units could be used to satisfy another developer's affordable obligations, or sold at free market rates.

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Steve Lewis 6 years, 2 months ago

It is now obvious to everyone following this discussion that as the affordable unit's pricepoint (or AMI level) rises, it becomes less and less attractive because the qualifying buyer is closer and closer to affording free market products which offer better appreciation down the road. Suggestions over the past year by some to raise the AMI levels of the current ordinance would simply exacerbate a now proven difficulty in selling those units.

These particular developers have been exemplary through the past two years of this discusion and have walked the talk with their projects. I support adjustments to these ordinances that assist the developer in selling their affordable product, but only if those adjustments keep the workforce housing gains of the ordinances largely intact.

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Steve Lewis 6 years, 2 months ago

I comment above on fundamentals of the discussion to date. The economic background of the fundamentals is changing for the worse. The ability and needs of our workforce can look very different next year. This ordinance discussion will have a lot of new parameters to consider going forward.

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canudigit 6 years, 2 months ago

Speaking from the point of someone who has tried to qualify for an affordable unit, what they have to offer is either too expensive or too small. My family of 5 cannot fit in a one or two bedroom unit. One of the previous projects we tried for, all the 3 bedroom units were spoken for and the price being asked for them was at the top of what we could pay. One of the problems for a lot of families is that if you have an income in the 80-120% AMI you can qualify for the affordable housing but, you still can't afford it. We don't need affordable housing with hardwood floors and alder cabinets (as some projects have offered), we need affordable housing with the basics at prices that people in the 80-120% AMI can actually afford. I know that is a tall order for Steamboat but, until that happens, I think we are going to see the empty unit problem continue.

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Fred Duckels 6 years, 2 months ago

Our world economy is a very good example of social engineering, and the inevitable inability to have anyone own up to the results. In this valley we have had too much money and social engineers have been allowed to run amok. Keeping the affordable housing fiasco up to date will provide job security forever and will never come to a logical conclusion. The markets will solve the problen with infinitely more wisdom than short sighted beaurecrats.

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Steve Lewis 6 years, 2 months ago

Fred, I concede the national Democratic agenda of getting more people into ownership is part of the mortgage bubble that burst. But these deed restricted units are not seeing foreclosures like the lower end free market.

Our housing policy is about housing our workforce - which is about the workers available for a healthy economy in Steamboat. I believe community fabric is also affected, a social side is there, but the workforce is the reason we have these ordinances.

Commuting is proving to be a significant cost for workers and is an unsustainable long-term source for a reliable workforce. Those workers looking long term understand they need the ability to own where they work.

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Fred Duckels 6 years, 2 months ago

Steve: Constant tinkering with deed restrictions, to make the program work seems insane. A good theory works under all applications. This one, does not work well in practice and should be abandoned. Worker shortage will eventually balance out in a free market, it may even slow down some of the runaway growth. It would be a shame if the trophy home owners had to scrub their own floors. The big money may think twice before investing unless they provide their own housing.

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Steve Lewis 6 years, 2 months ago

Fred, I too can chuckle about a worker shortage forcing us to scrub our own floors. But in truth, it's likely the trophy owners will pay enough to be immune to a worker shortage. They'll simply outbid local restaurants for their kitchen workers, retail stores for their clerks, Safeway for its clerks, the county for its snowplow drivers, etc...

New oil and gas energy work to our west will grow a lot, but is already creating a need for service workers supporting those energy workers. For instance the new superstore in Craig contributes to a shortage of grocery clerks here. They will need medical and educational workers next.

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Steve Lewis 6 years, 2 months ago

NOW, the PBS show on Friday's, said recently that workers who live near their jobs spend 6% of their income on transportation. Workers who have longer commutes spend 25% on transportation. The details of distance involved may weaken my argument, but the drive from Craig vs. housing here is obviously an increasing detriment for us going forward. The program backs up another study I've seen that correlates mortgage foreclosures to higher commuting distance.

The NOW program pulled out maps of the mass transit rail system in S.Cal in the 1930's. It looked like the current map for Portland OR in its service abilities, but more extended to cover a huge area. They listed the utility, tire, oil and bank companies that joined together to buy and tear the system up.

Abandoning infrastructure was profitable for some, but was insane leadership. Abandoning these ordinances to instead rely on workers from Craig, Hayden or Oak Creek will prove to also be a HUGE mistake in 15 years or less. Workforce housing (given the second homes competing for those units) amounts to needed infrastructure, and in my opinion, mandatory for our economic health the long run.

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Steve Lewis 6 years, 2 months ago

Getting back to the ordinance, and either way you see it, workforce housing is not a philosophy we can turn completely on or off with cycles of the economy.

I understand some of the fixes needed for the ordinance's "escape clause". But it does seem awkward to be tinkering with the front end of the ordinance amidst all the uncertainty of our tourist and construction economies. We could at least wait until next summer to better see the lay of the economy, and the ability of workers to secure long-term housing in our free market.

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Fred Duckels 6 years, 2 months ago

Good ideas Steve: I have thought over the decades of a tax that would reward those living near their workplace. A person with a long commute would be more expensive for an employer. See I do have a liberal side to me, I'll leave the details up to you. In my experience once we establish a definite market for affordable housing, we will find that private sources will fill the void with much more creativity than government ever can. The answer is in governments ability to stop meddling long enough and have faith in the system. I know it is hard for our leaders, not to follow the lead of our sister resorts and copy their social engineering. Regretably when I see what appears to be a new idea in town I later find that we are copying what other areas are doing. We need leaders and not just follow what others are doing.

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Steve Lewis 6 years, 2 months ago

Fred, I do recall how we looked at what tools were out there, so yes we looked at housing precedents in the other resorts and across the country. But by no means were we going there because somebody else did it.

The effort definitely began, and continued, because of "sticker shock" - the rapid rise in real estate value right here in Steamboat. That was in everyone's comments.

Only when we needed constructive policy ideas to address the problem did people say "look at what they did in Telluride".

In this realm it seems that a city's re-inventing the wheel typically also means being taken to court. Finding precedents became somewhat mandatory.

That being said, a new idea or two would be good these days.

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