Brent Pearson, a principal and chief financial officer of Resort Ventures West, developer of Wildhorse Meadows, listens to Steamboat Springs City Council members discuss affordable housing requirements Tuesday night.

Photo by Matt Stensland

Brent Pearson, a principal and chief financial officer of Resort Ventures West, developer of Wildhorse Meadows, listens to Steamboat Springs City Council members discuss affordable housing requirements Tuesday night.

Affordable housing plan to see drastic changes

City Council will draft major policy revisions

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Resort Ventures West developer Whitney Ward addresses members of the Steamboat Springs City Council on Tuesday night during an affordable housing discussion.

— Sweeping changes appear to be in store for the city of Steamboat Springs' affordable housing ordinance.

In a 4-3 vote, the Steamboat Springs City Council decided to move forward with an ordinance that would suspend linkage, an impact fee that requires developers to mitigate - with units or a fee - a percentage of the work force housing their developments are thought to create.

Also Tuesday, and in another 4-3 vote, council endorsed a plan suggested by a group of developers and local business leaders that would replace the city's 21-page Community Housing Ordinance with three options for compliance: an affordable housing impact fee set at a percentage of the sales or market value of new developments, a real estate transfer tax and a third, catch-all option that would allow developers to make an alternative suggestion to be approved or denied by City Council.

The plan would eliminate inclusionary zoning, which along with linkage is one of two key components of the city's affordable housing ordinance. Inclusionary zoning, enacted in 2006, requires developers to include affordable units in their housing developments at a rate of 15 percent.

Supporters love the plan's simplicity. Opponents said the move was hasty and uninformed.

In both decisions, council members Loui Antonucci, Cari Heramcinski, Jon Quinn and Scott Myller supported the motions. Council members Steve Ivancie, Meg Bentley and Walter Magill opposed them.

Officially, no action was taken at Tuesday's work session meeting, which drew a large and opinionated crowd to Centennial Hall. With council's direction, however, both plans will return in the form of ordinances to be considered officially. Both would be subject to two readings.

In supporting the linkage suspension, Hermacinski said that basing a fee on the work force housing demand it creates is akin to taxing developers for creating jobs.

"I think the first part of affordability is having a job," she said. "I think penalizing the creation of jobs is just a bad policy."

Ivancie said the move was too drastic of a step and that linkage, enacted in 2007, had not been given a chance to work.

Steve Lewis, who participated in the discussion as a panel member representing the Community Alliance of the Yampa Valley, said Hermacinski's argument only works in the short term. In the long term, Lewis said, the economic benefit of eliminating linkage would be outweighed by a lack of work force housing.

"We'll be losing marginal and start-up businesses because we have so few employees," he said.

The second vote was on a motion by Quinn. The suggested plan was based largely on a letter from the group of developers and business leaders calling itself the Concerned Citizens for Affordable Housing. In the letter, the group laid out its preferred plan for affordable housing - and later went on to threaten legal action if the city does not substantially change its ordinance.

Ivancie recoiled at the proposal and failed in an attempt to table the vote, with only Bentley joining him in support of that step.

"We're kind of doing this on the fly," Ivancie said. "I personally need more information."

Hermacinski disagreed and said council has been discussing the issue since taking office in November 2007. She said the debate of a concrete proposal in the form of an ordinance would help advance the discussion.

Comments

Martha D Young 5 years, 2 months ago

"In the letter, the group laid out its preferred plan for affordable housing - and later went on to threaten legal action if the city does not substantially change its ordinance." Once again we have the developers and contractors trying to dictate city policy. Where do these developers and contractors think their labor force lives? Eight to a unit at Dream Island? When will we elect council members willing to stand up for the entire community and not the privileged few?

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sickofitall 5 years, 2 months ago

Whod want to live in these places anyway? Tourist! Locals want a house, not a condo in the middle of Ski Time Circus. (My opinion anyway :) ) Just don't let them get away with making taxpayers pay for a private gondola, thats the next one...

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Larry Feldman 5 years, 2 months ago

Why should the burden for providing affordable employee housing fall on one limited group-- developers and builders? The employees who need housing are the result of all of all of Steamboat's businesses including the City itself and only remotely linked to developers and builders. One way to spread the burden more equitably might be through a general sales tax, a real estate transfer fee on all sales (existing and new properties) or perhaps a payroll tax paid by employers and not employees. The money collected could be used subsidize down payments for employees purchasing homes or for rent subsidies in appropriate cases. It could also be used to purchase and deed restrict units as market conditions and funds available allowed. The need for employees and employee housing is created by all businesses and not just developers and builders and should be shared by all businesses. No plan will be perfect but one can more readily make peace with imperfection when it spreads the burden more equitably to those who benefit and doesn't limit it to one group.

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aichempty 5 years, 2 months ago

My family has recently gone through a period where a dear friend and an inlaw were critically and terminally ill. The friend passed away about three weeks ago, and the inlaw died last Monday.

The transformation of the family members has been remarkable. They went from hand-wringing, praying for a miracle and lying awake worrying to a calm thanks for the end of the suffering.

Ending the affordable housing link to development and putting an end to the hope for cheap housing for wage earners is the kind thing to do. When people understand it's not going to get better, they'll find another way and cope with it. It's time.

I really do understand that people don't want to commute from Walden, Hayden, Craig, OC, Clark, etc. I really do understand that they arrive at work stressed from the commute.

I also really understand that we have a population where a lot of people are getting drunk and stoned every night after work, and that puts them in a bad mood the next morning.

Well, here's the thing. We're not responsible for someone else's comfort. They have a choice.

The only things Steamboat needs are a grocery store, gas station and emergency room. All the rest of the retail sector can go out of business and never be missed. If UPS, Fedex and the U S Postal So-Called-Service can't provide everything else we need, then we can drive to Craig or Hayden.

Small businesses are disposable around here. Their only value is one of convenience. Most of the wage earning locals go for low price, and that's it. The only thing we'll lose by losing a worker population is people who don't support local businesses anyway. The chain stores get most of the business because they have corporate support and buying power that puts small businesses at a cost disadvantage they cannot overcome. Don't ask me how I know . . .

You want to blame somebody for this? Blame the guy who started clearing trees to build ski runs in 1958.

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Scott Wedel 5 years, 2 months ago

I think the biggest improvement for housing would be to stop worrying about income and deed restrictions and that sort of stuff and instead simply use zoning to require that a bunch of less than 1,000 sq ft units are built with minimum amenities and limits on monthly dues. And if it is a single family housing then add a deed restriction that it cannot be expanded into a larger house.

We need to be building modest housing units that by their very nature are less unaffordable.

A real estate transfer is a horrible idea because it is too easy to avoid (an investor would have a company own the property and then sell the company so the property's owner does not change) and too unpredictable because sometimes, like now, there are few sales. Also, as some have been proposed they make a big deal about how much money it is over 30 years, but that is misleading because $1M today if properly invested should be at least $4M in 30 years.

And the AMI (average monthly income) should be ignored. This is a resort area. It attracts wealthy people. The average income of wealthy people moving here has absolutely nothing to do with affordable housing for people that work here. Thus, using AMI which includes the income of wealthy people is irrelevant for determining what average local workers can afford. They need to stop looking at the AMI and instead look at what local workers are being paid and set that as the target income levels of what we need to be sure is being built.

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TWill 5 years, 2 months ago

I agree that the AMI and other AH qualification standards need to be adjusted, but not for the reasons that Scott suggests. The current qualifying standards for potential AH buyers are contradictory in their nature. Current applicants need to meet income requirements set by the housing authority (based on AMI and number in household) that are too low to qualify for a conventional loan. Therefore, an applicant can either qualify by AH standards and not the lender's or Vice Versa. Either way doesn't work. You then have conflicting factors that prevent REAL working class people (nurses, police officers, small business owners, etc.) from being able to participate in AH programs. The end result is marginal (charity case) neighborhoods and complexes that are not sufficiently upkept and maintained because people with a decent enough wage to afford the cost of home ownership are not qualified to purchase an AH property in the first place.

The very small segment of AH buyers that actaually are able to qualify for both income and loan standards are reluctant to commit because its very likely that they could ultimately be stuck with a property they can't sell in the future when the same buyer "catch 22" occurs down the line.

Affordable housing is critical to the future of this community- as growth and development are as well, but the current AH model is flawed in a number of areas. Kudos to the current council for using common sense to move forward by simplfying an unnecessarily comlicated system. I hope the same bureaucrats that we always seem to hear from don't muddy these waters- but they probably will.

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Steve Lewis 5 years, 2 months ago

I'll try not to muddy the water. We are past many of those arguments now anyway. Even the commuting is moot.

Scott, Your hands are on the steeing wheel now, not mine. I'll take a back seat and try to listen well. Support what sounds good. And your last post is excellent.

Wages, and rtf avoidance. Keep thinking.

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Steve Lewis 5 years, 2 months ago

One thought I'll leave you with:

Second home pressure is a central factor. An Inability to tax that group left previous councils with the guy standing between them and us - the developer. O.K., maybe we'll no longer burden the developer one bit, now these costs may be passed to the buyer in an impact fee. It wil no longer be the case that "we're taxing the last developer over the pass". Please don't soon be saying "we're taxing the last buyer over the past!"

I hope we are saying, "Dear second home buyer. So glad you like Steamboat. It really does live up the the advertisements. Beautiful experiences with your loved ones do come true here. You won't need statues of children playing to grace your time share, because our town is chock full of laughing kids and their families. Let them show you the ropes. Thanks so much for the contribution you made to help those families live here too."

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aichempty 5 years, 2 months ago

And my "for sale" ad shall proclaim:

"This lovely home is outside the Steamboat Springs city limits, and not subject to the affordable-housing transfer tax surcharge."

Thanks for making my property more desirable to second home buyers.

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Steve Lewis 5 years, 2 months ago

Aich, You make a good point. But somehow I don't think you are suggesting the county commissioners pitch in.

If the county would get behind housing and match this next move, it would take away the problem of spending this money only in the city limits.

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Scott Wedel 5 years, 2 months ago

AH is not that unfair of a requirement for developers because the developers are getting something very valuable - they are being granted additional rights to use a property. Yes, it is an additional cost on the developers, but the argument is that the development also puts an added cost upon the community.

What has been so wrong about the AH program is too few units were created and too many were of the wrong type (too expensive or with high monthly association fees).

I have posted in the past about how deed restrictions on price are extremely difficult to get right. SB has not gotten it right because too many of the deed restricted AH units have not been immediately purchased.

It is also an unfortunate fact that a builder of a home makes more money off of a bigger home than a smaller home. So they build as large as they think they are likely to sell.

I think a workable plan would be to give developers the choice of: a) pay for Y apts to be built and owned by the YVHA b) build X small homes (less than 1200 sq ft) without convertible basements and with deed restrictions limiting additions within 30 miles of SB at a price that is affordable to a reasonable number of SB employees (Scott Ford can probably help determine that number). No deed restriction on appreciation, just size. c) Allow the developer to propose some number of affordable units within the project and make the developer explain why that will work in that development.

As part of an overall affordable housing plan I would also greatly encourage so called secondary units (aka an apt) in a house by permanently waiving tap and building permit fees, and charge water/sewer for one residential unit (aka the House). There are enough drawbacks to these secondary units that no one should be surprised that very few are built. Thousands in additional tap fees for a small part of your house, pay two base water/sewer charges even if apt not being rented such as being used as a older child's room. If employee housing within SB is so important then the City should stop discouraging secondary units and, in fact, find a way to encourage them.

Lastly, recall the stupid rarely enforced, widely broken, ordinance that says no more than 3 adults, unless all are related, may live in a house. Could my wife and I share our house with another family that are having hard times? Not legally in SB. Maybe limit number of occupants to no more than 1.5 per bedroom, and enforce parking and noise ordinances because that is what affects neighbors. I do not accept that providing housing is a true goal of the City as long as they maintain that no more than 3 adults may live in a 3,000 sq ft house.

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Steve Lewis 5 years, 2 months ago

Scott, Are the basement and addition restrictions to limit future pricing?

Maybe developers can support the lower income targets now. They logically argued for the higher goals before because that meant higher selling prices of their built AH units.

In 2006(?) Diane Mitsch-Bush published a spreadsheet comparing AMI to real Routt wages. Yes, its a lowering of our target incomes. Diane was instumental in changing the West Area Plan target from 100% AMI to 80% AMI.

Curtis Church offered that First Tracks might widen its window of financing by switching its chosen category of the building, I think going to residential...

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Scott Wedel 5 years, 2 months ago

Steve, The addition and basement restrictions are not so much to limit future price increases as much as it would be to keep the product the same. That does not significantly limit appreciation of the house because the house can always get it's free market price.

Houses never get smaller. They tend to get bigger by additions and so on. At times it can be profitable to convert a smaller house into a bigger house. So there is a constant decrease in the number of smaller, somewhat more affordable houses.

An AH program should not let an AH constructed house be converted into a larger, significantly less affordable house.

I don't like deed restrictions on appreciation because when that homeowner makes smart financial decisions then there are negative consequences. If the owners have to live there X years to gain the full appreciation then you have sacrificing everything to make it to that last year because that is worth so much money. If the appreciation is fixed regardless then homeowners may chose to do no maintenance because it won't make a difference in the below market selling price. A house is just too much of a person's or family' financial wealth to let it be distorted by price controls.

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Steve Lewis 5 years, 2 months ago

Scott, I understand the static constraints of a housing product. Makes sense. Deed restrictions amount to a patch of muddy water TWill warned me about. Another time maybe, after the front end of the housing strategy is redefined. We keep asking what goals are leading this revamp. Hope an answer emerges soon.

I'd like to hear your goals, funding wise. It looks like an impact fee. I believe you earlier referred to an abillity of a corporation to own a unit and avoid transfer fees by simply selling the stock of the unit rather than its title. So impact fees it is.

Current estimates are that IZ units on site cost developers locally and nationally about 3% of construction cost. That's out the window, but does a 1% impact fee make sense? The ordinance complaint was difficulty selling the units, not the amount of subsidy. Trappeurs told planning commission they would happily sell at the lower prices in coming months if they could close on a deed restricted unit.

What impact fee would you put in place of the old ordinance's 3% ?

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