Affordable homes could be outside 700

Housing plan built on free land, revenue from home sales and fees, flexibility

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Learn more about the proposed Steamboat 700 annexation at www.steamboatpilot.com/news/steamboat700/.

Vote on 700

■ Ballots for the mail-only election have been sent to city voters. City Hall is the only place for voters to return their ballots, by mail or drop-off. City Hall is open from 7:30 a.m. to 5:30 p.m., Mondays through Thursdays, and closed Fridays.

The mailing address is: City Clerk’s Office, 137 10th Street, Steamboat Springs, CO, 80477. One normal postage stamp is sufficient for ballot mailing.

■ Steamboat 700 is a proposed master-planned community on 487 acres adjacent to the western city limits of Steamboat Springs. The project proposes about 2,000 homes — from apartments to single-family home lots — and 380,000 square feet of commercial development that would be built to the standards of new urbanism (dense, walkable and transit-friendly).

— A former city planner who played a key role in developing Steamboat 700’s affordable housing plan said Wednesday that the plan’s focus is not on squeezing 400 homes onto 15 acres.

Rather, former planning services manager John Eastman said, the plan’s feasibility is based on generating revenue from the sales of affordable homes that the city could build with no land costs — because of Steamboat 700’s 15-acre land dedication — then using that revenue to purchase more land for affordable housing, build more affordable homes and sell them for a profit, ultimately creating a self-sustaining enterprise for providing long-term affordable housing in Steamboat Springs.

At the request of the Steam­boat Springs Planning Commis­sion, Eastman and Nancy Engel­ken, then the city’s community housing coordinator, laid out a scenario for how annexing Steamboat 700 could provide resources for local affordable housing in an extensive analysis completed last year. Using 12.5 acres from Steamboat 700 — the proposed annexation’s original contribution to the city, before the Steamboat Springs City Council increased it to 15 acres after public feedback — the analysis calculated how affordable home sales, construction costs, funds from Steamboat 700’s real estate transfer fee and land values could extrapolate to the production of 400 affordable units, sold to buyers earning no more than 80 percent of area median income.

Some of those units could be outside Steamboat 700, Eastman said.

“It could be anywhere,” East­man said about affordable housing sites. He said that 12.5 acres was “enough to do approximately 200 units” and that he envisioned about 12 to 15 units per acre, including single-family, detached homes such as cottages surrounding a shared lawn, or “green” area. He said that style of home has worked well in Breckenridge.

“They were going to give us enough land for about half the units … and we were going to use those revenues to go out and buy more land,” Eastman said Wednesday from Austin, Texas, where he moved after leaving the city’s Planning and Community Development Department late last year.

As a Routt County planner before his time with the city, East­man helped develop the West of Steamboat Springs Area Plan that guided Steamboat 700 negotiations.

He said Steamboat 700’s affordable housing plan provides flexibility for the city to choose quality over quantity, if it desires, and build affordable housing dictated by demand. But the community housing plan in the annexation agreement also stipulates 20 percent affordable housing throughout the phases of development, meaning the zoning and capability to build all 400 affordable units within Steam­boat 700 is there, if the city, Yampa Valley Housing Authority or other development entity chooses.

Eastman said the value of free land — with built-in infrastructure — is crucial.

“One of the key components of it all is that you get the land for free — and it’s fully ready-to-develop land,” Eastman said. “Even when you sell it to somebody at a reduced affordable price, you make a profit.”

Initial risk

Eastman and Engelken’s analysis included a projection of real estate transfer fee revenues from Steamboat 700, which would assess a transfer fee of 1.2 percent of the total sale price on every real estate transaction in the annexation. That fee would generate about $8 million for affordable housing in 25 years, Eastman projected. By 2050, the analysis shows, the fee could generate nearly $14 million for affordable housing, nearly $14 million for the Steamboat Springs School District, and about $5.6 million for a city capital projects fund.

Eastman said there could be risk for the city on the front end of the annexation, when the city would need to find revenue — potentially from a bank, state housing organization or its own funds, he said — to build affordable homes on dedicated land.

The 15 acres would be spread throughout the annexation. Eastman noted that the annexation agreement has a “front-loaded” land dedication policy that allows the city to access significant parcels of land that would be developed early in the annexation, which he said could jump-start the affordable housing process.

Steamboat 700 proposes about 2,000 homes and 380,000 square feet of commercial space on 487 acres just west of current city limits, with a 20- to 30-year time frame for development. City voters are deciding the annexation’s fate in a mail-only referendum election that ends March 9. Registered city voters who have not received a ballot or need to update their registration status can call City Hall at 970-879-2060.

Mary Alice Page-Allen, asset and program manager for the Yampa Valley Housing Authority, said she agrees with the scenario of using home sale revenues to purchase additional land.

“The bottom line here is that this is an enterprise,” she said about affordable housing. “This is a business that has to thrive. You’re not going to sell those lots for nothing.”

Comments

insbsdeep 4 years, 9 months ago

How does a 1.2% transfer fee generate 8 million dollars in the next 15 years in this economy. Selling $600,000,000 of property doesn't even generate that much. None of that money goes to pay for capital expenditures?

By 2050, $30,000,000,000 in sales.... wow. Steamboat 700 = the new Aspen.

Let's hope the voters can see through all the smoke and mirrors.

We can come up with better affordable housing options.

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seeuski 4 years, 9 months ago

You haven't yet, have you? Lets just let things happen the way they have all along, no planning just hodgepodge growth and no infrastructure to support it.

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Scott Wedel 4 years, 9 months ago

I keep looking at the calendar because surely it must be April 1st and I'm reading the SB Pirate. This article is brilliant satire.

The idea that the City of SS, whose last foray into providing affordable housing was the financial disaster known as Iron Horse, is going to use a few free lots to develop affordable housing (affordable because the lot is free) and then make so much money from the sale (profitable because the lot is free) in order to buy other lots simply has to be a joke.

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John Fielding 4 years, 9 months ago

It is true we could find a better way to create affordable housing, and faster too. But there is probably going to be too much opposition to any plan that places the costs on current residents and businesses. The land is not free, it will be paid for, plus interest, by the purchasers of homes and businesses in SB700. As they have no voice yet, we can easily burden them with costs for subsided housing that we would never accept.

The whole concept of affordable housing deserves reexamination. If we are going to use subsidies, I propose a fund be established as a loan guarantee program to create 1% mortgages for low income residents. This would make anything more affordable by far.

A more challenging concept is to remove governmental restrictions on designated development to reduce the expenses. One small example is the Cities prohibition on mirror image duplexes. If our CDC was carefully examined for cost saving measures a great many could be found.

In the meantime, with the requirements currently in place, SB700 will pay up. They have given everything we have asked for, following the WSSAP design, funding improvements, even asking the vote on annexation be easier to attain. Lets just not forget that its the future residents and businesses who we are taxing.

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1999 4 years, 9 months ago

I agree with scott...the entire premise is a pie in the sky dream. and a preposterous one at that.

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Krista Monger 4 years, 9 months ago

“They were going to give us enough land for about half the units … and we were going to use those revenues to go out and buy more land,”

When did the City of Steamboat decide to be developers? And isn't this called a flip?

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Kevin Nerney 4 years, 9 months ago

Kmm, you beat me to the punch, I was just saying the same thing about flipping. Look what happened in this country when people saw flipping houses as a get rich quick scheme. TV shows popped up and made it look easy. Then reality sunk in. In the same vein (vain) will real estate agent become a new city hall position or will the realtor who donates the most campaign money be given all the contracts?

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housepoor 4 years, 9 months ago

Yeah this deal should be about as good as the iron horse or airport terminal at bob adams has for us.

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Steve Lewis 4 years, 9 months ago

I attended the Yampa Valley Housing Authority meeting where they reviewed their final letter endorsing SB700. John Eastman's "scenario" had been published weeks earlier. The YVHA letter made no attempt to endorse that the SB700 plan would result in 400 units.

I made the obvious request that, as YVHA endorsed SB700, they should also state that YVHA believed they could turn 15 acres and .5% VRTF into 400 units of affordable housing. YVHA would not.

What does that tell you?

One of the YVHA boardmembers made the remarkable effort to fully understand Eastman's very complex pro-forma. She made the point that a rise in interest rates quickly shot the whole thing down. She also noted that he used far too many small units to get to 400 units. Her work resulted in the original 12.5 acres being increased to the currently proposed 15 acres to allow larger AH units.

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Steve Lewis 4 years, 9 months ago

Disappointing that Mike Lawrence is writing pro-700 journalism like this. He knows full well the impacts of interest rates on this scenario, because both he and I have heard that YVHA board member's finding more than once in Centennial Hall.

Nor is hers a subtle and difficult calculation. Eastman's work was good and he put it all into a published spreadsheet. Click the cells of interest rate upward in any of the scenario's 5 phases (5 years each) and the scenario crumbles.

Steamboat Pirate it is.

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Scott Wedel 4 years, 9 months ago

Steve, I am not willing to say that this article is pro SB 700. I do not think the reader has to be particular clever to doubt the viability of this plan. And it does, in the paper for the first time, reveal the plan of how 15 acres were going to result in 400 units. Thus, shattering any credibility to the claim that SB 700 will provide hundreds of units of affordable housing.

It would have been more favorable to SB 700 if this had not been published.

I note this is yet another situation in which the advocates of local affordable housing create some unrealistic dream scenario of how affordable housing can be free or even profitable to the taxpayers (Iron Horse, etc). If any of these scenarios had any credibility then they should form their own nonprofit development company and endlessly produce affordable housing.

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pitpoodle 4 years, 9 months ago

No matter how the Pilot tries to sugar coat this fiasco, the fact still remains that a real estate transfer tax is illegal in Colorado. SB 700s voluntary real estate transfer fee is very likely to be ruled illegal as well. If this annexation passes, the city will be left holding this $40-$50 million bag to provide the housing.

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Steve Lewis 4 years, 9 months ago

AH free or profitable to the taxpayers is not my advocacy, nor have I heard it from my peers. Not sure where you heard that other than in this annexation rhetoric.

Obviously we give to the YVHA out of the City's general fund. Many did support Inclusionary Zoning which expected development to give back as we grew through their projects, but even in the day where that program was in place we also said other tools were needed. The "layer cake" was the plan then. Dismantling (Linkage) and reducing (IZ) funding sources is the plan now?

To be honest the City AH program's future is so meager that we're talking pennies in my opinion. I'm done wasting my energy on it. And I Iost my respect for this newspaper along the way.

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Bergie13 4 years, 9 months ago

"How does a 1.2% transfer fee generate 8 million dollars in the next 15 years in this economy."

It doesn't. Because this economy won't last. If you believe this economy will last 15 years, then you're one of the people that believe Steamboat doesn't have to grow. You know that is wrong, right?

"We can come up with better affordable housing options."

Like......? I have yet to see a viable plan that doesn't involve free land, and transfer taxes. Which is what this plan proposes. If you've got another plan, now would probably be a good time to speak up.

Say what you want about the city's ineptitude with housing options before, but the staff at the city and county have been working on West of Steamboat expansion for decades, with public comment all along the way. It has to happen, do we really want to delay the process by another year or two, or even blow the chance altogether now?

I only wish it had been opened up to the entire county to vote. After all a large percentage of the people that would like to buy and live in 700 right now live in Hayden, Stagecoach, etc.

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Duke_bets 4 years, 9 months ago

If you can't stand doing yard work and love the smell of your neighbors, this would be a place to buy a home if approved. The affordable housing units would be on .05 acre lots. You could possibly squeeze a 750 sq ft house onto those lots and have less than 30 feet separating the homes.

It sounds like the layout for a mobile home park.

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Steve Lewis 4 years, 9 months ago

Sigh...

SB700 is NOT yeilding 1.2% transfer fee to affordable housing.

The right number is .5% to affordable housing.

Yet another example of either crafty or sloppy Pilot writing that effects an overstatement of SB700's contribution: Pilot above- "Eastman and Engelken’s analysis included a projection of real estate transfer fee revenues from Steamboat 700, which would assess a transfer fee of 1.2 percent of the total sale price on every real estate transaction in the annexation. That fee would generate about $8 million for affordable housing in 25 years, Eastman projected."

The two sentences are literally true. But also apples and oranges.. Call it crafty or sloppy. Either way your takeaway from of SB700 giving 1.2% VRTF to AH is undeniably FALSE.

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Steve Lewis 4 years, 9 months ago

I looked at Eastman's spreadsheet of his scenario above. Mike Lawrence's "initial risk" is only a small part of the risks he should report. Interest rates are the achilles heel of SB700 housing.

Change Eastman's assumed 25 years at 6% interest to 7% interest instead, and the SB700 housing effort loses $7.7 million of the money it would use to buy more land.

Extra land? 400 units? Don't count on it.

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insbsdeep 4 years, 9 months ago

"After all a large percentage of the people that would like to buy and live in 700 right now live in Hayden, Stagecoach, etc."

LOL, good luck getting a loan.

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Scott Wedel 4 years, 9 months ago

Steve, My comment about the advocates of affordable housing creating unrealistic scenarios was not directed at you. It was directed at those that describe how this or that project will result in so many beneficial side effects that it will pay for itself or fund a "self-sustaining enterprise for providing long-term affordable housing in Steamboat Springs". Or that the Iron Horse was going to be a profitable workforce housing venture for the City.

If the economics of affordable housing generated so much free cash flow the YVHA with all of their units would have boatloads of cash and not be in survival mode.

The honest truth is that affordable housing costs money. It takes money to bridge the gap from market rate to affordable. Places with strong affordable housing programs do not pretend it can be done for free or on the cheap. They acknowledge that it costs money and thus have realistic expectations.

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blue_spruce 4 years, 9 months ago

"After all a large percentage of the people that would like to buy and live in 700 right now live in Hayden, Stagecoach, etc."

yeah, right! LOL !!

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kathy foos 4 years, 9 months ago

One thing that effects the value of property that we buy is the appraisel value that the county assessor appoints.They have been calling the shots for what we pay for our homes and if you live in steamboat or north of steamboat the values are sky high and crazy,any other areas are kept at a minimum.Isnt it time to do something to regulate the values?If the homes cost 400,000. say to build in a modest way,why the 600,000. figure?Maybe if they would value an area, lower like they do rest of the valley,there could be affordable housing.600,000.00 is alot to pay out for a modest home anywhere.

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Clearsky 4 years, 9 months ago

The affordable housing can be built somewhere else like Hayden or Craig or make it really affordable, how about Vernal? Now excuse me my head is going to 'splode. Needs more work. Build the infrastructure first! All structures should be net zero. If Habitat for Humanity can do it, surely any developer can.

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housepoor 4 years, 9 months ago

Can't get much more affordable than hayden, they have a 40 year supply of vacant lots.

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sledneck 4 years, 9 months ago

Help me out here guys. Does the peoples' vote make or break this deal? Is the vote the final word or will Council still have the final word? I'm just not clear on that.

Sounds to me like if the people have the last word this things dead.

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housepoor 4 years, 9 months ago

Not dead at all, it's voted down, SB700 comes back with a different proposal, i would imagine a scaled back would sail through, sell it out, come back with another this all or nothing is what is bs

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aichempty 4 years, 9 months ago

Here's what will happen. Even if approved, SB700 is not affordable (reference a 40 year supply of vacant lots in Hayden because there's no money in spec building and nobody has money to contract out for a new house). Why buy a house in there and pay the extra fees and taxes that will be required? Even "affordable" units will have to pay fees and taxes to the "special district," resulting in those occupants paying as much in the end as if they bought market rate housing. They'll be paying the same amount of money for less square footage, and getting no benefit from appreciation on their deed-restricted homes. That includes all 8 or 9 of them which get built in the next ten years.

The infrastructure improvements will be completed on the City's budget, and lots of locals will benefit from the construction required. Even if an out-of-town "small female-owned or economically deprived" company get the bid for the excavation work, they'll sub it out to locals, just like the logging work in the National Forest.

It will be five years before any meaningful development can start because the economy is still suffering. This includes infrastructure improvements.

SB700 developers will end up suing the City to provide water.

All the undeveloped vacant lots sitting around in Hayden, Clark, etc., are proof that housing for worker bees is unaffordable on local wages. With equity lost as prices have collapsed from the real estate bubble, people who own existing homes who would have "moved up" have to sit tight.

One good thing, however, is that if SB700 is approved, people who've been holding vacant property for speculation may start selling it off below-market rather than be stuck with it. I know of at least 100 lots where people have money tied up in land that cannot be sold today for anywhere near $100,000 per acre. $10,000 per acre would be a stretch.

It's sorta nice, in a way, to have been around long enough to see cheaters and embezzlers maneuver themselves into a place where all their money is tied up in land that can't be sold. God works in wondrous ways ;-)

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sledneck 4 years, 9 months ago

I'm more interested in what will happen if it fails. Will it be dead? Whats the "rule" about the power of the citizens' vote on this?

I know SB700 can submit a new proposal (probably as many as they wish) but will a no vote this month completely kill the current proposal?

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Scott Wedel 4 years, 9 months ago

Sled, A no vote overturns the city council vote approving the project. The approved annexation agreement would be overturned. No more votes by the city council on the existing annexation deal. I am pretty sure SB 700 would have to file a new planning application.

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Julie Green 4 years, 9 months ago

Sled, If the SB 700 Annexation fails in the public vote. The Developer must go away for one year. They can come back and resubmit another proposal after that year. The Developer's attorney has stated that they will not be back and will probably divide into 35 acre parcels. I don't know if that is a threat to be used as a scare tactic or the truth? Regardless, if SB700 is not annexed water will be a big issue for that property as it purportedly sits on a 1000 foot deep layer of Mancos Shale. "In 2006 Steamboat 700 paid $24,978,592 for the parcel they seek to annex to the City. Local developers scratched their heads upon hearing the purchase price, thinking it too high, even exorbitant. They should have known the land sits on a 1,000 ft thick layer of Mancos shale, drilling for potable water is impossible and it is dry land, i.e. it comes without “wet” water rights." from https://letsvoteno.com/Editorials.html

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ybul 4 years, 9 months ago

Wow, they did their due diligence on the project. That said, I do not think they have the market to try and sell 35 acre lots and as the can only sell 20 they are in a money losing position without annexation, even if they had the ability to drill.

If they do not succeed with the annexation agreement then either they will file again or someone else will be able to buy the property and develop it (probably with a lower land cost).

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housepoor 4 years, 9 months ago

Sounds like the county is open to 5ac parcels now, maybe that change is in response to the possibility of the annexation not going through?

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