Steve Lewis: Keep eye on the ball

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Keep eye on the ball

As City Council reconsiders our effort to provide affordable housing for our work force, I respectfully request the Pilot & Today to keep its eye on the ball: Today, we can expect 15 percent of our new development in the city to be affordable. What level of affordability will we get when this City Council process is done?

The recent argument from Mary Brown that plays open space off against affordable housing does little to advance our effort. It offers a list of questions but no tool to better create affordable housing. In my opinion, Ms. Brown presents an illogical proposition: Open space has the same priority level in our surveys as affordable housing, so the tools we apply to create open space should resemble the tools we apply to create affordable housing.

If you accept that flawed premise, you then need to explain how a state-funded effort to create publicly owned open space could resemble a local effort to create housing owned by private individuals.

I agree with Ms. Brown that the survey priorities are meaningful. In my opinion, the surveys are meant to inform important area plan updates. But the more serious discussion of an area plan cannot fully adhere to a survey's priorities. For example, I would remind Ms. Brown that neither of her competing priorities, open space or affordable housing, are the community surveys' top issue, as she alleges. That top issue is growth management, as indicated in the 2005 survey and the more recent Vision 2030 survey. All of which represents a detour from the task of shaping policy to create affordable housing.

Let's keep our eye on the goal - creating more affordable housing, not less.

Steve Lewis

Steamboat Springs

Comments

Scott Wedel 5 years, 2 months ago

And the great irony is that literally at the same time that Steve in another forum argues that all affordable housing must be in SB because commuting 30 minutes to Hayden, OC or Stagecoach is not viable, the SB Today publishes an article with Moffat County commissioners talking about the issues they face with all the commuters going to SB each day.

I think it is far more important to have an affordable housing plan that actually provides a sizable number of affordable housing units and there is far more potential to get more units for less money in neighboring communities.

So I am entirely willing to let developers have no affordable units in their new developments by allow them to trade by building more units in the region. The goal of affordable housing programs cannot be to build a handful of units in that help only a very few, but to have enough that an average person has a reasonable hope of living in one day. And the affordable units have to be affordable based upon wages paid in SB, and not based upon some number distorted by rich retirees or investors and so on.

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Scott Ford 5 years, 2 months ago

Steve Your editorial encourages City Council to keep their eye on the ball but which ball? Home ownership? Or, more rental inventory? If the emphasis is on home ownership I am concerned that that the impact of all the efforts will be very small as to be almost undetectable. It is highly likely that a huge amount of energy will be expended with the current approach where is the biggest return? What will result in more housing units?

I hear next to nothing on expanding about rental options via building apartment complexes and a lot of them. What is happening in regards to this?

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JLM 5 years, 2 months ago

In today's economy almost every big project will have a stuttering start --- 5-year building permits anyone?

If affordable housing is going to be attached to otherwise market driven projects, then AH will also have to wait for the economy to turn.

Affordable housing IS rental housing in its purest form. The idea that shelter is required to be fee simple ownership is pure vanity and folly.

As a kid (Army brat), my family never lived in a house we owned until I was in college. We took pride in our housing whether it was an Army barracks cut up into apartments or when we finally bought an $8,000 house. [Lots of times we had really, really big apartments because they chopped WWII barracks into just 4 units each. Sometimes the units had been used as BOQs and we had a single bathroom with 4 showers and two toilets and two sinks. We were living high!]

When we moved to a new location (about 10 times), everybody chipped in to clean, scrape and paint. It was part of the ritual of moving and becoming established. To this day, I can still paint an entire room (walls, ceiling and trim) in about 4 hours including putting drop cloths over the furniture. One time I painted the family room when my family went to a movie and they never noticed it when they returned. Only the smell of fresh paint gave me away.

Hell, it was fun. Everybody got to pick the color of their room but had to paint it themselves.

Pride of ownership can be generated in an apartment complex as easily as in a house.

The City of SBS needs to take the bull by the horns and designate a piece of land by the golf course and get a developer to build affordable multi-family housing to be rented at affordable rates. Local employers could reserve units for their employees by pre-leasing the units. The City could issue a Certificate of Participation thereby accessing lower cost capital (though interest rates are plenty low just now).

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aichempty 5 years, 2 months ago

JLM,

There's no such aminal as building affordable rental units to be rented at affordable rates.

If you look into building costs, and finance rates, you'll find that there is a strict lower limit on what you can spend to produce a square foot of living space. If the tactic you propose was profitable, somebody would be doing it.

HUD housing is subsidized by the government and serves low-income Americans. The target clients for this kind of assistance make WAY less than what it takes to live around here.

The thing your scheme requires is for someone with a lot of money to give away to go ahead and give it away for the benefit of people who are only needy because they refuse to face the reality of how much money they can make locally as opposed to what it costs to buy housing here.

If you want to live in Steamboat on what you can make as a wage earner, you need to bring enough cash to buy your house so that housing costs are not an issue. That's reality.

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Steve Lewis 5 years, 2 months ago

Scott W, Our debate on a commuting solution is well documented at:

The community plan does take a position on this, as well.

Scott F, Yes rental is needed. The existing ordinances were intended to address one piece of the housing problem, ownership.

The unaddressed, larger and harder piece is rental housing for the lowest income levels. Its been my expectation that this is where private sector has less ability than the public sector. This economic slump is a big obstacle.

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Steve Lewis 5 years, 2 months ago

JLM, I agree much will wait on the economy. The current IZ ordinance presents no cost until you pull your permit, so its tuned to harness upcycles in the economy. For this reason, I hope we don't lower our housing policy as some kind of stimulus package - it wouldn't stimulate anything.

I hear rumor of a parcel trade in the annexation. Makes sense.

I wish local employers would do as you say (I've agreed with developers this would be a good "escape clause" use of First Tracks units, with any profit going to YVHA or the city). but they just aren't showing up to own employee rentals, even when the economy was hot.

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Steve Lewis 5 years, 2 months ago

Aich, The West Area Plan puts lower income (80% AMI) as a target user for 20% of the units built. THe city target is 100% AMI. Danny (700) was saying he would deliver a mix, so rental in the annexation would exist to a much greater extent than in the city.

I think 80% AMI and below is definitely rental range. Maybe 100% AMI and below is too, though 80% AMI sells better in town now.

Control on the rent levels is yet to detailed? Any rent control scheme requires some fraction of municipal ownership.

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JLM 5 years, 2 months ago

@ ai ---

There is no question that the creation of AH rental units will take some financial engineering and subsidy. I would see the City of SBS providing the land gratis (that's why I keep suggesting land adjacent to the City's Haymaker golf course), issuing Certificates of Participation, providing tax and fee credits and other public-private initiatives. The numbers have to be made to work on the front end because as you correctly note the costs of construction and capital are otherwise immutable.

Nonetheless, it could be done in much the same way that open space is acquired --- public funds are dedicated to that use and are simply spent with no expectation of a financial return. This is not just equity it is invisible equity and will never, ever be returned. Maybe social equity?

You are quite insightful to point out that this is not a HUD type Sec 8 customer base and therefore traditional HUD approaches are not applicable to a SBS family. This is a social judgment and one I hesitate to opine upon. Nonetheless, this is the real problem.

As to employers, they could partipate in the development of properties similar to what American Campus Properties and Education Realty Trust (two public REITs) have created in their partnerships with major universities to replace dorms which require huge amounts of capital to build. Again, these properties would require a bit of social equity as the numbers are tight here also but universities are able to make it work.

In the end, the public sector is going to have to harness the talent and expertise of the private sector if they want to change the current outcomes.

While I am not sure that I can embrace everything that is implied in recent comparisons of the public will toward open space and AH --- some of the financial imperatives may be useful.

What we have now is simply silly -- all talk and no action.

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Steve Lewis 5 years, 2 months ago

Scott F, I thought, with some glithches fixed, we had "keep up" pretty well addressed. At Planning Commission in Spring 07' we recognized a role for City wasn't spelled out, so we revised the "Housing Implementation" document to put the city on the spot for the "Catch Up", about 600 units.

The Iron Horse was the one project which put a city shoulder to this effort. You'll remember I defended the Iron Horse. Cari Hermacinski, also from that 07' PC, refrained from joining the other campaign attacks on the Iron Horse.

The city needs to step up again, when revenues return. I expect that next effort would be toward the gaps in our workforce housing.

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aichempty 5 years, 2 months ago

JLM,

The difference between the city spending public money to preserve open space for the benefit of ALL citizens and spending money to benefit a favored few who just happen to be unable to afford housing in the local market should be obvious.

Creation of housing with a means test involved will have some unexpected consequences here, just like it has everywhere else. Once outside people learn that such housing is available to low income working families in such a great, safe and affluent place, we'll be inundated with applicants who are on the "most needy" end of the criteria and therefore will obtain priority for the housing. Why live in crime-ridden crowded Denver if you can live in Steamboat, right? If a residency test is applied (must live here and have a job here to qualify) then a court challenge could be expected by womens' advocacy groups and the like, since they can argue you can't live here and work here if you don't have a place to live already, and if you already have a place, why do you need another one? See where this goes?

Again, it's like the interstate highway beltways around some of our big cities. Instead of reducing traffic congestion, the bypasses created more traffic by providing transportation access to more outlying areas, allowing them to develop into suburbs providing housing for the downtown workers.

When Vail, Aspen and the other exclusive areas got too expensive for less than the ultra rich, what did they do? They started moving to Steamboat because the housing was more affordable. That's why we have so many second, unoccupied homes around here for much of the year. We provided ski resort town housing at bargain rates to a willing market and they streamed in like spawning salmon.

There are a few of you who have very specific ideas of what will happen if affordable rental housing is built, and unfortunately, your expectations are not realistic. Once you get past the criteria of "ability to pay the rent" and start trying to apply a bunch of "if, then, else" types of rules to qualifying people for residency, it gets too big and complicated to manage equitably. Access to rental housing is controlled by federal civil rights laws, just like all other housing, and if you make it cheap enough for people to get IN, then you can't decide who to keep OUT except for inability to pay the rent.

A hundred rental units would cost -- are you ready for ths -- at least 10 million dollars to build. Probably more like $15,000,000 (and that's with free land). Even at 5% (which you'd be very lucky to get), the rent on each unit would have to be around $1000 per month to service the debt, cover maintenance and management expenses. Where's the city going to get that kind of money to benefit only 100 families who could live elsewhere except for their own personal preferences?

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Steve Lewis 5 years, 2 months ago

The city is going to get that 100 units, which sound like 50-60% AMI units, in return for annexing property it will have to provde services to. Annexing residential property is a net loser for a municipality, so this is the trade we suggested in our west area plan. The average of 80% AMI means the other units would be higher AMI.

Contrary to the insurmountable difficulties suggested above, affordable rentals have been in Steamboat for a decade at least. Hilltop Apartments, Mountain Village. It works just fine.

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JLM 5 years, 2 months ago

@ ai ---

I agree completely with everything that you say as it relates to the consequences of building AH apartments and the social engineering implications. The law of unintended consequences surely applies to this situation.

I have built and/or owned over 15,000 market rate units (never anything subsidized) in very diverse markets in my lifetime, so I am intimately familiar with the business. I have been out of the business for a decade but I am still knowledgeable with the cost structure.

I am envisioning the old fashioned TCC middle of the line v Gables top of the line units.

You are just a bit high on the total "all in" cost (remember I posited "free" land as a basis for the undertaking as well as Certificates of Part to lower borrowing costs and help w/ the fees) and the rent would be more in the $750-900 range (1B1B to 2B2B) given my assumptions but these are not "dealbreaker" or "dealmaker" differences.

The other wild card is how much more, if any, the City of SBS would be willing to invest social equity thereby in effect "buying down" the principal nut to be crunched.

I also anticipate that you would have to build approximately 300 units to hit the sweet spot for construction costs and management expenses.

If your view is the prevailing view (and there is no reason why it should not be a viable conclusion), then the prospect of market rate units in adjoining towns is the way to go.

In the final analysis, apartment rent as a proxy for a mortgage payment appears cheaper in the current environment.

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aichempty 5 years, 2 months ago

JLM,

Thanks for the comments. I'm going on estimates and theory, but you've got the t-shirt. I have mentioned before that I did not go into the rental apartment business because I could make just as much money investing in tax-free muni bonds at the level I could afford to develop without partners and investors (which I will NEVER EVER DO AGAIN).

Can you imagine 300 rental units crowded with families in Seamboat? Holy cow. Kids and dogs all over the place, etc. Dealing with snow machine trailers, off-lease roomates violating the lease provisions, noise complaints. Brrrr. Why would anybody invest their personal money to buy into that kind of headache around here?

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Steve Lewis 5 years, 2 months ago

JLM, Fox Creek, West End Village, Hilltop Apartments, Mountain Village do really exist.

Aich, if putting all the AH units in one neighborhood seems crowded, you might apreciate how our plan and the ordinance seek to integrate units through the community.

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JLM 5 years, 2 months ago

Apartments are always a management issue but like any business they work if the ownership is attentive. If you can build them for $65K a unit and sell them for $100K a unit 2-3 years later when leased up, it's a pretty good business. Used to be anyway.

You surely have to like people cause there are a whole lot of them. The key is always tenant qualification.

Three hundred units is not really a problem as it is the sweet spot to be able to afford great on site management --- now 1200, that's an apartment complex! Oh, the memories! LOL

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aichempty 5 years, 2 months ago

Steve,

Nothing has gotten cheaper to build. Building costs are significantly higher now than when the places you mention were built. Just because people can't borrow money to buy existing homes, and existing home prices are dropping, that doesn't mean that new ones will be cheaper to construct. A drop in demand for building materials will lead to a decrease in supply at some point when current inventories are used up, keeping prices near current levels.

Labor and lumber aren't going to get much cheaper either, because all the things people need to buy are still expensive. This truly is a depression scenario. Companies can't afford to pay people to produce things that are not in demand, and at some point, even if you have money to buy what you want, nobody will be producing it because most people won't be able to afford it.

I never really understood the Great Depression until I started analyzing our current dilemma. People who had real wealth and assets did okay throughout, but the ones who were only wealthy on paper got royally screwed. Some people on the margin who depended on wages to live did okay because their jobs survived and they were able to pay their rent, or the tax on their real property, but millions of homes and farms were lost to bank and tax foreclosures.

A paid-for home, low living expenses and an essential job are the elements of security for average people now. So what's in our future? Just like the working folks got pushed out of Steamboat in the 90s, a lot of us are going to be pushed out all across the country by people from elsewhere who have the means to buy what we can no longer support.

And so, why did WW-II end the Great Depression? It put people back to work on a large scale (public works? Ring a bell?), and when the war was over, we had great industrial infrastructure that allowed us to sell to the rest of the world, which mostly HAD NO INDUSTRY because the war had destoyed it. This time, there's no foreign market when the public works jobs run out, and nobody needs what we sell outside of agricultural products.

We can't compete globally if we have to pay salaries high enough to cover the current costs for housing, cars, etc. That means prices must fall, and so some products will disappear because of the loss of economies of scale (like new houses and new cars that have to be purchased on credit). What it comes down to is a massive write-off of existing debt, meaning that the national wealth represented by paper promises to pay debts will disappear. That money all has to eventually come out of somebody's hide, and it looks like that's going to be the banks. The only thing left at that point is for the government to step in (as it already has) and take over the failing banks and bad assets.

So good luck on getting the feds to lend money to build houses for resort town workers. That's money that nobody around here will ever see, because it would look awful on TV.

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Steve Lewis 5 years, 2 months ago

Aich, JLM, You have to cut a lot of corners to make your housing argument. Ignoring the projects that are working is a one corner you cut.

Another, it doesn't seem to register, in your free market perspectives above, that a community took the time and effort to gather, discuss, and write a plan of "how we want our community to grow". You make zero accomodation for the goals of your neighbors.

It also may not register, in your free market perspective, that developing in a community is a privilege, not a right. Courts uphold this principle that a community may define how development will fit their vision. "Cheaper" was the not sole argument used to build our town, nor is "cheaper way out there" a given when commuting costs long term are considered.

Please at least try to accomodate realities, such your neighbors' goals, amidst your arguments.

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Steve Lewis 5 years, 2 months ago

Aich, A=A, B=B, C=C, is not a logical path to say that A=C.

Fewer words might keep this thread alive. Please don't bury me in irrelevancies.

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Martha D Young 5 years, 2 months ago

Remember when Ski Corp offered the units on Pine Grove Road, adjacent to The Pines, as employee housing? What happened to the idea of getting employers involved in providing housing for their underpaid (by Valley standards) employees? (With all deference to the preceding comments made by people much more informed about construction than I am.)

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diplodocus 5 years, 2 months ago

Not everyone who moves to Steamboat can afford a house. The opposite thinking is what got us into the subprime mortgage mess that we're in today. When we moved to Steamboat, we lived in an 8X40 trailer for two years till we saved the money to buy a lot, and used the lot as collateral to get a house loan at more than 11% interest. I worked 3 jobs, and my wife worked full time for $5.00 an hour. We didn't eat out or go to movies or buy televisions or cars. Today's work force needs to learn to delay instant gratification in favor of long term goals. Everyone thinks he/she is entitled to everything-- including a home-- NOW. If owning a home is the most important thing to these people, let them move to the front range where homes are more affordable. If living in Steamboat is more important, stop whimpering and start skiing the 100+ inches of powder we receive each month. My parents couldn't afford to buy a home till I was out of elementary school. My dad worked two jobs to get enough money for the down payment. This country needs to get back to a mindset where saving is a virtue instead of running up credit card debt.

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Fred Duckels 5 years, 2 months ago

Dip, My sentiments exactly, you made it on your own, and are better off for it. You are low maintenance, and probably a thorn in Steves side. Steve and pals are looking to create dependency. The result is that Steve will feel needed. The "need" to be needed, is a disease that is far more problematic than the actual problem. First comes AH, then Steve will be needed to solve the next issue that arises. In the meantime, we are breeding dependency, i.e. high maintenance. All the time Steve will become more indispensible, as will his left agenda. O is following the same path of induced dependancy, that will assure the left, and socialism of a green light. Steve, If controlling growth is our top priority, how does AH fit in, as it fuels growth and encourages investment? You are helping special interests, but I guess it fulfills the need to be "needed".

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Steve Lewis 5 years, 2 months ago

Marthalee, At its foundation, this discussion is about building the community we want to live in. That comes with input like yours. Better understanding our "Heart and Soul", is how the chamber would put it. Please add your thoughts!

In my opinion, you represent a very healthy balance of the above- a presentation on how to build the least expensive Steamboat.

Your willing humility raises a contadiction I had not seen: Without question, an ultra high-end environment is being developed all around us for wealthy new owners. I'll guess even those new owners would ask that Steamboat please keep its "heart and soul".

How strange then, this argument that "as cheap as possible" should define how developers attend their shaping of the remainder of Steamboat.

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Steve Lewis 5 years, 2 months ago

Ad in today's paper:

Trappeurs Crossing : 4 pools 9 hot tubs tennis courts spa services private shuttle putting green concierge staff heated underground parking

I don't begrudge anyone their luxury. But it seems fair these developments can also support of the "heart and soul" of the town and valley that attracted their clients.

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Steve Lewis 5 years, 2 months ago

Marthalee, To your point, you are right. A few employers like the Ski Corp do provide housing for part of their workforce. But they are the exception, and even they could do more. I was a little shocked to see some of my Lift-Up donation last year come back to me in the form of a rent payment, on a Lift-Up check. I figure its just been that kind of year, tough on everyone.

At Bud Romberg's affordable housing roundtable last year there were a few employers in attendance. It may be hard for them to engage this conversation for political reasons? I don't get it either. I agree with you, they should have some stake in this.

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Steve Lewis 5 years, 2 months ago

Diplo, The workers aren't lobbying for this. Folks of all incomes reached the conclusion affordable housing was needed. Its not a case of low incomepeople asking for this.

What do you think about importing employees on work visas? Did you have that competition as you built your equity?

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aichempty 5 years, 2 months ago

Steve,

Your little series of equations proves you don't know what you're talking about. You're just wishing.

The fact the community came together to think this thing up doesn't mean anything. Star Wars was thought up. It made a lot of money for the guy who thought it up, and some others. Still, have you seen a flying car lately?

Your plan requires people with money to spare, agreeing to give it away to other people, who are going to end up treating them rudely in the shops and stores around town.

The only reason the people who would benefit from your plan are here is to enjoy the resort environment year-round without having to buy their way in at market rates. Are the people who work in Manhattan getting "affordable housing" within walking distance of their jobs? If the businesses doing business in high-cost Manhattan are not providing employee housing two blocks away, then how can you expect the mom and pop shops on Lincoln avenue to do it?

Jesse Jackson has made his career on championing the cause of the downtrodden. He's gotten rich at it. But, how many of them has he personally financed into an affordable home? Not many, I'll wager. You're getting something out of this, even if it's only admiration. I'd have a lot more respect for your cause and your approach if you were showing some results in terms of working families actually getting into affordable homes. So far, we've only seen "affordable" homes being built, with few takers. What do empty homes do for us? They just drive up the real estate prices for everybody else, helping to shut lower income people even further out of the market.

Continuing to polish this pet rock is not going to make it any more viable.

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Steve Lewis 5 years, 2 months ago

Diplo, My point is that the ladder you climbed for local equity now has a few steps missing. Many marginal businesses are reaching elswhere for the only employees they can afford.

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Steve Lewis 5 years, 2 months ago

Fred Duckels, You comments are typically directed at my character and ridicule my support of workforce housing. Unbelievable:

"Duckels has just started looking for his summer staff."

"We're always shorthanded," he said. "We have to work with the competent people we have. You could do a lot more work, but you can't find the people. As soon as you try to get marginal people and do more work, that's a recipe for losing money."

He said they have to sort through a lot of applications to find people who fit. Duckels said he prefers people who live in Steamboat because his company has had little luck with those who don't. The housing issue crops up again with out-of-towners, Duckels said.

"I'm sure that's a problem," he said. "That's why it's difficult for people to come in from outside. If they don't have a place to live and everything, it's hard to get started."

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Steve Lewis 5 years, 2 months ago

Affordable housing works:

Fox Creek Village - 30 deed restricted units, sold out

Sunburst Condos - 7 deed restricted units, sold out

First Tracks - 47 units under construction, 16 undercontract

Hillside Village Apartments - 38 rental assistance units

Mountain Village - rent adjusted or controlled units

I don't know the status of 8 or so units recently finished downtown by Jim Cook and Paul Franklin, but I suspect half are sold.

Deed restrictions work, or this list wouldn't exist. Terms of IZ ordinance has an "escape clause" (as written by developer's) that agrees ONE YEAR from C.O. would be appropriate time frame to reconsider unsold AH units. The ordinance is not broken, the economy is.

The lower income units show much more demand. Shifting IZ's AH product to lower incomes will better target the ordinance's units.

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aichempty 5 years, 2 months ago

Steve,

I thought I'd posted this before, but I guess not.

I owe you an apology. Your numbers show that the program works.

Are the people moving into the deed-restricted homes the ones our community intended to help? Are they people who were working in Steamboat and renting, or who owned in a nearby community?

I'd be curious to know how many of them moved directly in from elsewhere and then started working locally. For example, if someone from outside meets the income test, is that all that's necessary to qualify?

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Steve Lewis 5 years, 2 months ago

Aich, The Area Plan puts it this way: Steamboat wants its workers to be able to live in Steamboat.

There is no "locals only" qualifier that I'm aware of. For the IZ units, which I'm more familiar with, I believe Routt employment (or 2 years of Routt employment before retirement) are the qualifiers.

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Fred Duckels 5 years, 2 months ago

Steve, I don't mean to villify you, but you seem to represent the face of pro AH. This article was the result of a call from the Pilot reporter. I was not complaining, just describing the scenario that that most of us are in. I could expand if everything worked out, but that would be foolish as the next economic cycle would find me overextended. This was the marketplace at work, I was comfortable in it, knowing that micromanaging at a time like this could land my name on the front page, with all the lefties proclaiming my stupidity. I do have a crew from southern Co. that I provide lodging for. When they are in Steamaboat I rent, but I would not consider help from the government, this could easily lead to problems like the sub prime, since the economy is not a place for amateurs to tinker.

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Steve Lewis 5 years, 2 months ago

Fred, Your quotes in the Pilot article make a perfect case for SUPPORTING affordable housing ordinances.

You also make a case that the free market (yourself) won't go there. And you oppose workforce housing ordinances for what reason?

And your solution?

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