700 housing plan on agenda

Attainability program would market 480 homes to set income levels

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If you go

What: Steamboat Springs City Council meeting

When: 5 p.m. Tuesday

Where: Centennial Hall on 10th Street

Vote on 700

■ Ballots for the mail-only election will be sent to registered Steamboat Springs voters between Feb. 15 and 19. The election ends March 9.

■ 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).

Online

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

Editor's Note: This story has been changed from its original version, to reflect new numbers from the Yampa Valley Housing Authority regarding household income and maximum home prices at 200 percent area median income, or AMI. The initial numbers provided included a calculation error at that income level.

The attainability program for the proposed Steamboat 700 annexation would require 480 homes to be initially marketed to buyers earning no more than 200 percent of the area median income.

The attainability program must have Steamboat Springs City Council approval before any development occurs at Steamboat 700 and is in addition to other affordable housing measures in Steamboat 700’s annexation agreement. A discussion of the attainability program is on the City Council’s agenda for Tuesday night.

Steamboat 700 proposes about 2,000 homes and 380,000 square feet of commercial space on a 487-acre site just west of city limits. City planning documents cite a 20- to 30-year timeframe for development. City residents will decide the fate of the annexation in a mail-only vote that concludes March 9. Ballots will be sent to registered voters from Feb. 15 to 19.

Whether the city’s annexation agreement with Steamboat 700 developers does enough to provide affordable housing is a topic of local debate.

The agreement’s community housing plan stipulates that Steamboat 700 will give the city 15 acres, on which the city would be responsible for the development of affordable units. The West Steamboat Springs Area Plan requires that 20 percent of the total number of units built in the annexed area be deed-restricted affordable housing, with buyers averaging 80 percent of the area median income, or AMI. If 2,000 homes are built in Steamboat 700, 400 would need to be affordable units.

Steamboat 700 also would place a real estate transfer fee, of 1.2 percent of the total sale price, on all sales at the development. Of that 1.2 percent, 0.5 percent would go toward a city affordable housing fund. Another 0.5 percent would go to the Steamboat Springs School District, and the remaining 0.2 percent would go to the city’s capital fund.

“When they dedicate that land, and with the real estate transfer fee, that covers their (affordable housing) requirement,” city planner Jason Peasley said last week.

The attainability program is in addition to that requirement. It stipulates that 30 percent of the remaining 1,600 homes at Steamboat 700, or 480 homes, would be marketed to buyers or households earning between 120 and 200 percent of AMI. Danny Mulcahy, principal and project manager for Steamboat 700, said last week that the marketing requirement applies for each home’s first 12 months on the market.

He said when combined with the affordable housing requirements, the attainability program results in 44 percent of the total homes at Steamboat 700, or 880 homes, having either a deed restriction or income-related marketing requirement.

“I can’t sell a piece of dirt until that (attainability program) is approved,” Mulcahy said.

Tom Leeson, director of the city’s Planning and Community Development Department, said City Council will review “a skeleton” of the attainability program Tuesday. Mulcahy expressed confidence that the current numbers won’t change, but he said how the program is implemented and monitored remains to be decided.

According to documents provided by Mary Alice Page-Allen, asset/program manager for the Yampa Valley Housing Authority, 120 percent of AMI for a household of four people is $96,720. Assuming a down payment of no more than 20 percent and total, annual housing costs of no more than 30 percent of annual income — numbers stipulated in the annexation agreement — the maximum home price for that family is $408,828, with 80 percent financing. For that same household, 200 percent AMI is $161,200 in annual income. The maximum home price is $681,380 with 80 percent financing.

For a household of two people, 120 percent of AMI is $77,400 and the maximum home price is $327,164 with 80 percent financing. Also for a two-person household, $129,000 is 200 percent AMI and the maximum home price is $545,273 with 80 percent financing.

Exactly whom is targeted by local affordable housing programs also will be discussed at Tuesday’s City Council meeting, which includes a presentation from a citizens committee that has studied the city’s affordable housing policies.

The meeting also includes review of a development plan for Ski Time Square.

Comments

Scott Wedel 4 years, 11 months ago

The 12 month marketing rule is worthless. Houses are marketed before they are built and then are built when there are buyers. So the 12 months of marketing is likely to expire years before the house is built.

Also, the 30% of income rule is silly. That 30% rule makes sense when applied to those making less than AMI because a household needs some money to pay living expenses and so on. But a family making nearly $200K can safely decide to spend more on a house and have less than $10K a month for living expenses.

This is such a joke. This sort of stuff is why it makes no sense to annex the entire property at once. By 2020, my prediction of when construction will begin in earnest, SB residents will wish they could rework the annexation agreement.

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Krista Monger 4 years, 11 months ago

I am trying to be educated about 700, but I am confused. The article states "The agreement’s community housing plan stipulates that Steamboat 700 will give the city 15 acres, on which the city would be responsible for the development of affordable units." Does this mean that not only is the city picking up expenses for infrastructure, but also the construction of the affordable housing?

another question: Is the definition of "affordable units" ones that are priced from $408,000 - $817,000? Theoretically, can the developer choose to use the top end of this price range for his required "affordable units". And back to the above paragraph, is the city the developer of these units?

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aichempty 4 years, 11 months ago

KMM,

Yes! You figured it out!

The City has to find a way to build the affordable units on the 15 acres of land.

The City has to pay for the water and waste treatment infrastructure in advance of home construction, and then try to recover the costs from tap fees and taxes.

Compliance with the other "affordable" contingencies is not spelled out. That's one of the big pieces that's been missing all along.

One of the faulty underlying assumptions about the whole subject of future development is that a "plan" was put in place to "preserve the character" of Steamboat Springs. That would be a real nice idea if it was all being done by some private foundation that owned all the land, however, in this case it comes down to a bunch of people with a narrow point of view attempting to enforce their prejudices on the owners of private property. What right does anyone have to tell others how to run their lives or use their property as long as zoning and land use regulations which protect all of us are observed?

We don't live in a socialist society yet. It would be a lot simpler for "affordable" housing advocates if we did. The details of "who gets the benefit" of the so-called affordable housing development have not been worked out, and the truth is that the first time a government entity discriminates against someone who can afford to buy a home built on the "free" land in favor of someone else (by changing the selling price based on "family status" for example) it will be in violation of the Fair Housing laws.

HUD housing programs are in place to aid low-income families. Anyone who can afford to buy ANYTHING built in SB700 is not going to qualify for HUD housing, and that's why it won't work around here.

People are choosing to be voluntarily underemployed in order to live in a resort town, and there's not a government program anywhere else that uses public tax dollars to benefit people just because they want to live in a high-cost area.

So, the "plan" cannot succeed in the long run without using private funds to purchase land and give away homes at a loss to people considered "worthy" by the private entity. The legal challenges will come only after there are homes built and the policies result in discrimination covered by the Fair Housing laws.

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Fred Duckels 4 years, 11 months ago

Let's get back to market economics here, forget all the worthy social goals as it only results in job security for beaurecrats. On the national scene we find that the proponents of all this social justice are headed south in the polls. The pendulum is swinging in favor of common sense, sounds reasonable to me.

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Steve Lewis 4 years, 11 months ago

KMM, Affordable housing is defined by jurisdictions large and small as that housing one can own by spending x % or less of one's income. That x is typically 30%, and includes mortgage, interest, insurance and HOA fees.

Scott, That definition structures a very useful rationale when geared to make sense of ownership at the margin. It looks silly when applied to 200% AMI because it is irrelevant at that level.

Thank you for your point of properties marketed before they are actually built. I suppose that's called a pre-sale. This attainability program should look at limiting pre-sale timeframes.

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Steve Lewis 4 years, 11 months ago

Aich, Your stated view I believe is: 1) The area plans come down to a bunch of people with a narrow point of view. 2) Those plans/people have no right when annexing to tell the annexed property how to behave.

Please accept at least this: Yours position is on the extreme fringe. For heavens sakes, the "private" owners whose wishes should trump all else? They also disagree with your position!!

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Scott Wedel 4 years, 11 months ago

The numbers shown here shows that the attainability program is pointless, silly and just an added expense of no public benefit. Making regulations for buyers earning nearly $200K a year as if providing housing for them is a public benefit is a waste of time.

It makes no sense for the government to be intervening in a market at prices above what is available on the open market.

And why again are we approving an annexation of hundreds of acres, most of which will not be built for at least 10 years. We should let SB 2020 residents have a voice on the annexation agreement for what is being developed in 2020.

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Mike Lawrence 4 years, 11 months ago

All, The Housing Authority provided new numbers today regarding household income and maximum home prices at 200 percent area median income, or AMI. The initial numbers at that level included a calculation error and were incorrect. The above story has been changed accordingly. The new numbers show lower household incomes and home prices at 200 percent AMI. We apologize for the error. Contact me anytime with questions, etc, regarding Steamboat 700.

Mike Lawrence Reporter Steamboat Pilot & Today (970) 871-4233 mlawrence@steamboatpilot.com

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jaded 4 years, 11 months ago

Basic point to make. We as a community have 3 basic options for growth. Remember, I said basic - these can all be tweaked a bit so...

  1. No growth, this is what Boulder did a number of years back. It results in skyrocketing property values and the work force living outside of town, leading to increased traffic and pollution among other things. Those of you who already own a home here would love that but what about the rest of the population?
  2. Unchecked growth, this is what has been going on here for the past few years. This results in empty buildings and empty retail space.
  3. Managed smart growth. This is what this agreement states. The growth phases will have to be approved by planning, the houses will be built after they are purchased, the developer will pay for infrastructure --before or during, but they will still pay! We will have the necessary road improvements, retail and schools that will OVER TIME alleviate many of the trips through town that everyone loathes so much.

If this agreement fails, we will be left with nothing, the traffic will continue to increase, the land will be resold in 35 acre parcels and the City will get nothing for it except alot of regret. The work force will move out of Steamboat, trips to Oak Creek and Hayden and Craig will increase, and the Steamboat population will become lots of second homeowners, all wanting no more growth to keep their perfect sanctuary the same as it was "when I came here".

Vote YES on the annexation agreement!

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Steve Lewis 4 years, 11 months ago

I agree the prices of these AMI's may be had on the free market today. And that appears useless. But our market is also in collapse with no buyers. This is hardly a permanent condition. Prices will again present a problem for workers at these AMI's. Some of us did argue for or lowering this AMI average.

The City's "intervention" on attainable housing is nothing more than an attempt to "put in writing" the developer's verbal promise of attainability. Frequently we have heard "Steamboat's workforce is our natural market". Many, including me, believe that is an empty promise. If we are able to MAKE that promise come true through, we should.

What I will agree is pointless: artificially lowered prices has little to do with workers owning that product. The physician in New York will snap up a cheap second home or the other money in Las Vegas will see a sweet return once they hold the property for awhile.

Annexation is not a free market excercise. Its a City swallowing adjacent land and there are only 2 parties at the table. 700 either pleases the City or it doesn't.

I don't dispute this would swallow easier if smaller.

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Steve Lewis 4 years, 11 months ago

jaded, I agree with Scott here. This annexation passed city council 4-3. Its a marginal bargain if passed, a marginal loss is beaten. The sky will not fall.

This annexation is NOT a guaranteed home for our workers. That key element, the whole point in fact, is very much in doubt.

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housepoor 4 years, 11 months ago

How about focusing on creating sustainable jobs and promoting commerce before start worrying about where these people will live. We can't get rid of the affordable housing we have now.

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best4steamboat 4 years, 11 months ago

Qualifying persons making 120 percent of the area median income of $80,600, which would be $96,720. This means the buyer has a gross monthly income of $8,060 of which 30 percent can go towards housing expenses of principal, interest, taxes and insurance, or a total of $2,418.

The stated maximum home price of up to 480 homes is $408,828. This would provide an approximate 1,635 square foot home based on average building costs today of $250 a square foot. The qualifying persons would need to put $81,757 down and would be carrying a mortgage with principal and interest (calculated at 5 percent) of $1,756 plus $212 in property tax and an estimated $95 in insurance for a total monthly payment of $2,063. This obviously falls easily into the range buyers making 120 percent of the median average income for this area.

The questions that need to be asked are real and concrete. Who is this “affordable” or “attainable” housing aimed at? Is it entry-level school teachers that the district hopes to retain? Is it medical provider personnel at doctors’ offices or health care facilities? Is it entry-level law enforcement, county and city employees, waste management employees, private taxi, restaurant workers, small business owners, or our children trying to make a home here?

It is questionable that any of these individuals or groups make even 80 percent of the area’s average median income, or $64,480 a year, even with combined salaries. And let’s ask who among our families of four, which implies two parents and two children, make 120 percent of the area’s average median income of $96,720? How many of us even make the average median income of $80,500? These figures in themselves are unattainable for the average person for whom the West Steamboat Area Plan and the Vision 2030 groups were addressing.

All of this number crunching leads us back to the primary questions about this development that will drastically change the face and character of Steamboat Springs regardless of how long the build out will be. Will it provide the attainable housing we are seeking now for our community members? Will it help us continue to promote and retain a sense of community? Are there other ways to provide opportunities for lot and home purchases on a smaller scale?

There are other developments being proposed that conform more to the Routt County Master Plan as well as to the WSSAP that provide for growth originating from the growth center, which is downtown Steamboat Springs. We acknowledge that we need growth and growth opportunities, but this growth should continue in a much more controllable form from the city center outwards, not outwards inwards.

In addition to these aspects of “affordable” and “attainable” housing, we desperately need to address all aspects of traffic through and around Steamboat before committing ourselves to a dramatic population increase—regardless of its estimated build-out period.

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cindy constantine 4 years, 11 months ago

Thank you Best4!! There are approx 1000 undeveloped acres within the existing city limits. While all are not available for development why not consider some flexibility in the zoning codes on some of the land which is available. (ie" duplex lots to tri or 4-plexes) We seem to have no trouble doing it on a massive scale at the base of the mountain, why not a little flexibility in other parts of town. As mentioned in an earlier blog, even in the real estate boom years of 2006-2007, there were only 65 building lots sold per year. With the changing demographics we do NOT need a large annexation at this time or perhaps ever. Most Steamboat people I have talked to, feel a PHASED annexation makes much more sense as SW has been discussing for months BUT only when the job market improves and the existing real estate inventory has been substantially reduced. Believe me when I say if we don't need it now (and all on both sides of the issue agree), the annexation agreement as it now exists WILL NOT PASS.

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steamboatbusiness 4 years, 11 months ago

Cindy, the development is not happening now, it is happening over decades, this provides for decades of controlled development, controlled by the City. You have all been here in the cycles, or perhaps, maybe some of you represent growth and you have not been here long enough to see the cycles. Remember when you couldn't find a rental property in the paper? In history, this is always in a cycle. The economy WILL pick up, people WILL move here and we will follow American cycles of wealth and recession just like for the last 100 hundred years! Please get your blinders off about this being built in the next 2-5 years, it will take 2 years just to get it through the City planning process! Head out of the sand! Opportunity for the future of Steamboat!

I have seen around the place that the Committee for Good4Steamboat has a website and it does have good info on it, www.good4steamboat.com for those of you like me who want more info so I can make an educated vote, rather than a vote based on "Most Steamboat people I have talked to", because most of them don't know the facts either and we could miss a really big opportunity here to get some smokin hot deals on infrastructure, roads, parks, trails, transport, affordable housing etc

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cindy constantine 4 years, 11 months ago

Busy,

Please spare me the sales pitch. Come clean on how you are vested in the project!! If you think the past will predict the future you need to get your head out of the sand!!!

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best4steamboat 4 years, 11 months ago

steamboatbusiness

didn't you just read the previous two posts??? Is 40 years of being here long enough for you? Did you really say "smokin hot?"

Did you not even bother to read the previous post I wrote? These will MOST OBVIOUSLY NOT be "smokin hot deals!!!!. Get yourself educated!!! These issues are not for the ignorant!!!

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Tubes 4 years, 11 months ago

It's funny how everytime someone makes a compelling argument for 700 they're tagged as being for hire. Nice comeback, is that all you have?

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best4steamboat 4 years, 11 months ago

Let’s ignore the 15 acres, for now, that will apparently be up to the City of Steamboat to develop.

The 400 most affordable “units” under the agreement will be available to persons averaging annual income of $64,480 (80 percent of the area median income of $80,600 for a family of four). This type of housing, whether condos or townhomes, has not yet been defined. Based on today’s lending scenarios of a required 20 percent down payment and total housing costs of no more than 30 percent of gross income, the family of four in this case would not only need to be making $64,480 a year, but would only qualify for a total monthly housing payment including principal, interest, taxes and insurance of $1,612 per month.

Let’s say a three-bedroom (for a family of four) condo is available. This condo would have to be priced at no more than $323,000 and would also be deed-restricted. This means that the buyer needs to have a down payment of $64,600 and qualify for monthly payments on a loan amount of $258,400. Monthly principal and interest at 5 percent will be $1,387, taxes $167 and insurance about $58, for a total of $1,612 a month, or 30 percent of the gross income that is allowed by lenders for housing expenses. Note that this does not include any closing costs which are typically rolled into the final property loan.

Based on two local sources that say that average building costs today, not including land or lot prices are approximately $250 a square foot. This means the three bedroom condo for the family of four in the above example would be at most 1,292 square feet—not even including the lot.

All of this number crunching leads us back to the primary questions about this development that will drastically change the face and character of Steamboat Springs regardless of how long the build out will be. Will it provide the attainable housing we are seeking now for our community members? Will it help us continue to promote and retain a sense of community? Are there other ways to provide opportunities for lot and home purchases on a smaller scale?

There are other developments being proposed that conform more to the Routt County Master Plan as well as to the WSSAP that provide for growth originating from the growth center, which is downtown Steamboat Springs. We acknowledge that we need growth and growth opportunities, but this growth should continue in a much more controllable form from the city center outwards, not outwards inwards.

In addition to these aspects of “affordable” and “attainable” housing, we desperately need to address all aspects of traffic through and around Steamboat before committing ourselves to a dramatic population increase—regardless of its estimated build-out period.

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CedarBeauregard 4 years, 11 months ago

"We acknowledge that we need growth and growth opportunities, but this growth should continue in a much more controllable form from the city center outwards, not outwards inwards"

This is the discussion we on planning Commission are having now. We had a work session last Thursday to discus adding 2nd floor and 3rd floor requirements in our CC and CS zone districts. The hope is that those floors will be used for local residences within walking distance of most services in Steamboat. Unlike the Wild Horse Marketplace which has no residential units or 2nd floors. This requiring of density will be something new to Steamboats core. A simple swipe of the pen can add countless units to our current properties. Something I think should be done regardless of SB 700s outcome. Smart Growth always starts with infilling the core.

I had also asked that we look into increasing the density of the residential areas in town. Hopefully we can start that conversation also.

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aichempty 4 years, 11 months ago

Lewi,

If the whole dadgum town was behind the "plan," that would still put everyone in a national minority when it comes to individual freedom and making your own choices based on what you can afford and what the law will allow.

I've got to be frank and tell you flatly that the so-called "plan" would never survive if it had to obtain financing to succeed. I truly believe that the planners have left out the important step of figuring out how to make it all happen without a magical money tree and/or some kind of dictatorial power to force it to completion without popular support.

It's not the people who live around here that will make the final decision. It's the people who will bring in money they've earned somewhere else and spend it on real estate. That's what SB700 is trying to do, with a hefty subsidy from the City for water and waste treatment, and apparently a lot of people around here care enough about the issue to want a public vote on it. I guess the results of the election will show what "most people" actually want, so we'll have to wait and see.

There is no lawful way to prevent outsiders who can afford a home in this area from purchasing one. Affluence has its rewards, and because we live in an area that has been blessed with natural beauty and a world-class ski resort, people who have worked hard elsewhere and earned the money to purchase a second home here, or a retirement home, are going to do so.

The "character" of Steamboat Springs has changed considerabley since I first drove in over the pass pulling a U-Haul trailer. I purchased a market-price home that someone else sold to take a job elsewhere. I purchased it as a bona-fide second home which I was able to afford in addition to my primary home back east. People who had been living in rental housing and working around here couldn't afford it, and it was only $120,000.00. I had friends who did the same thing around the same time, and in the process, the community gained six residents with college degrees in engineering/science, including two registered nurses, three computer/math professionals and a business executive, and all of us with 20 years or more of experience in our fields.

There are plenty more where we came from. You cannot keep them out. They will change the character of Steamboat Springs whether you like it or not. This is the problem with your "plan," and it's why the "plan" is not going to succeed. Local economic conditions will never support it, as building costs continue to prove with each passing year. Steamboat is an expensive town, and there's nothing in the "plan" that's going to make local kids and working families rich enough to compete, even with deed restrictions and special pricing (which will never survive the first challenge in federal court, by the way).

I know you believe in the plan. I believe in Jesus. Neither one of those beliefs is going to stop other people from having what they can pay for.

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Scott Wedel 4 years, 11 months ago

Is growth really inevitable? If you look at the demographics of current SB residents then you have a profile that is overwhelming Caucasian. If you look at demographics for Caucasians then you have population growth around zero getting older. If you look at the demographics during SB's growth phase then you baby boomers representing a younger group and a huge growth in numbers.

When we start seeing large number of Blacks, Hispanics and Asians skiers moving here for the recreational lifestyle then we will experience major growth again. But so far the winter sports industry has had minimal, if any, success in attracting middle class minorities.

SB 700 housing is going to be marketed as a better alternative to Vail, Aspen and so on. There is not the natural growth in SB to justify it. It is a "built it, they will come" sort of project and so it will bring growth. We talk about traffic to Hayden and Craig and the preference that the local workforce can live in SB as if local service jobs pay $35 an hour or so which would give them a chance to qualify for an 80% of AMI place in SB 700. SB 700 is going to allow no more than a handful of people to move closer.

If you really want a plan to reduce traffic on hwy 40 then they could upgrade cty 14 to Stagecoach as is already planned and then spend a few million more to run water/sewer to the lots in Stagecoach to create a few hundred affordable lots. Give lot owners out there a choice, pay your share of improvements or accept a deed restriction to build a modest affordable house on the lot. Improvement districts can do that. So that would take the pressure off of west side hwy 40 and create enough population to justify bus service to Stagecoach. Stagecoach is already designated a growth area and land prices are low enough to allow building affordable housing.

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housepoor 4 years, 11 months ago

The growth is inevitable crowd are the same folks heard saying we are a “lifestyle community” immune to the economic downturn. LOL The reality is that the growth they arewere banking on was coming from the baby boomers who now have lost their appetite for 2nd homes.

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Steve Lewis 4 years, 11 months ago

Aich, I believe: the percent of our workforce that commutes significantly, that needs to stabilize and even diminish. It makes both social and economic sense to me. Our plans support that too. Religion is no analogy. Choice of faith is optional. There is only one Steamboat plan. Feel free to change that in its next update.

I agree with you the free market will NOT deliver affordability. I disagree we should dismiss affordability that a community wants to achieve because the market doesn't do it already.

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JLM 4 years, 11 months ago

Affordable housing should take the form of multi-family projects. When left to market forces --- and particulary today --- individuals and families who are looking for the most affordable form of housing turn to multi-family housing.

When a person joins the work force or a family moves to a new town, they are likely to live in multi-family housing. This is how a free market rises to meet the demand for entry level or cost conscious housing.

In general, the apartment market in the US is well segmented and able to provide housing at a broad continuum of pricing points and quality levels from government subsidized to luxury units.

There is no reason why SBS cannot have a healthy similiarly segmented apartment market if it has the political will to make it happen.

Given this almost universal reality, why is it such a stretch of common sense to focus on multi-family projects as the basis for the initial thrust of solving the affordable housing challenge in SBS?

SBS and neighboring cities can join together to target this approach on a regional basis.

Given the cost of development in SBS and its surrounding areas, it will take a creative engineered financial approach to make this happen but it is eminently doable.

I think the simple truth of the matter is that SBS is a bit elitist and does not really want "affordable housing" it wants affordable "single family homes". These are two very different things.

What will not happen is the creation of AH through constant, unending discussion or without some traffic impacts. It is time to take some action which is focused on results and which reflects what is done in the "real" world.

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housepoor 4 years, 11 months ago

We already have plenty of affordable rental units. Where else in the world can you rent a single family house with a value of 800k to 1mil for $2500 a month? The market for renters has never been better.

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JLM 4 years, 11 months ago

Hmmm, I wonder if an annual rent of $30K is all that affordable? Hmmm?

Not.

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housepoor 4 years, 11 months ago

Jlm, That is on the high end. You can get a decent 2bdrm for $900 in town, was 1300 18 months ago

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Kevin Nerney 4 years, 11 months ago

best4boat says affordable housing clients need first 81,000 as a downpayment and then says 64,000. for upfront costs. Who has that kind of money in the bank? If you are in the market for affordable housing I don't think you have 81 hundred let alone 81 thousand. Anyone with a job that pays them enough to sock away 80 grand probably isn't skiing all day and waiting tables at night.

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TWill 4 years, 11 months ago

You're right on with your figures, housepoor. It's astonishing at how quickly the rents have dropped around here. Supply and demand is one thing, but rates have dropped nearly 50% within a year.

I'm curious of others' take on why this happened so fast. Most landlords still have fixed costs that are barely covered (if at all) with rental rates like this. Especially if they bought the property as "investment" during the boom. A gradual adjustment is one thing, but this is pretty significant. Any ideas?

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housepoor 4 years, 11 months ago

The 2 big reasons I see are:

Every realtor and their brother who bought a condo to flip and now can"t sell it is hoping to rent it out,

The majority of the transient construction workforce has left town.

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TWill 4 years, 11 months ago

Good points.

The condo flipping/ speculation game (or some version thereof) was a major cause of our economic problems, both locally and nationally.

There's no such thing as easy money, a free-lunch, etc. and too many people thought there was.

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Steve Lewis 4 years, 11 months ago

And the problem is Steamboat is making that speculative money too easy.

Speculation drives good and bad. Our mistake is we made speculation the trump suit of our economy. Construction was king. We fed it with base area bonds and huge base area up-zonings. We are now greasing its bearings with deregulation. Even as our future is weighted with years of inventory.

I’d rather not see us do this again in 10 years. My comment is not about 700. Its what we are doing in town today.

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aichempty 4 years, 11 months ago

TWill,

Some money is better than no money when you have two mortgages to pay. The losses offset other income, however, and that's a tax break for the landlords in many cases.

It occurred to me that this whole debate is not about making housing affordable. It's about redistributing income from people who can afford market rate housing over to people who cannot.

When a person gets an 'affordable' home at a discount from the fair market value, the Internal Revenue Service is going to think that equals "income." I wonder if anybody involved in the AH organizations has thought of this aspect. A person getting a $20,000 break on a fair-market purchase price is going to owe tax on that $20,000.00.

Welcome to America.

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JLM 4 years, 11 months ago

As a general tax proposition, a discount that is offered on the total price of a good or service and is not created by a third party paying cash to obtain the discount is not income.

Example: WalMart runs a sale on tires. Price is discounted, no income.

Example: You buy tires at WalMart and your employer pays $100 toward the price in cash, $100 income to the beneficiary.

Pragmatically, there is no reporting mechanism for housing payments as they are only relevant tax expenditures in the most remote of instances and then the issue is the magnitude of the expense rather than any ancillary income. It would be very difficult for the IRS to obtain that information.

Further, the tax rates of lower income folks are effectively ZERO.

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Scott Wedel 4 years, 11 months ago

Rents are crashing because so many property owners have given up on selling and are trying to get any income. And some of these are not that attractive to at least some renters because it is obviously short term. And some of these are from landlords that raised their rents the fastest so their tenants left when better deals came up elsewhere.

Rents will either come back or housing prices will go down because no market will sustain rents that pay not even half of the interest portion of the mortgage.

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JLM 4 years, 11 months ago

Apartment/rental housing rents are almost purely a market function. Big supply of rentable units will result in downward pricing pressure.

Rental rates lag occupancy rates by 6-18 months. When market is 95% occupied, then rents will go up 6-18 months later. Why?

Because renters have just signed 6-18 month leases and the landlords do not have another crack at them until their leases expire.

Rents always go down past some perceived "equilibrium" level because landlords or banks in possession always panic on the way down.

If you are renting, get the longest term you can at the lowest price even if you have to agree to increases during the term of the lease.

Simple real estate economics.

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TWill 4 years, 11 months ago

Simple real estate economics, yes. But it isn't it ironic that the same ski/ snowboard bum making the same wage at the same seasonal job for the winter has had (at least) a 30% decrease in his monthly rent for the same condo he would have rented last year as a result of macro-economics..

This scenario benefits the least vested party in the tenant, landlord, bank relationship (the tenant). The seasonal worker has a few more bucks each month to buy pizza and beer and the landlord is losing money each month and is in a significantly higher risk of foreclosure as a result. What good does that do?

Who needs SB 700 with these conditions? The best affordable housing plan is to rent at these disproportionally low rates with the savings adding up to be able buy the distressed property from your cash-strapped landlord. Obama's plan is coming together faster than any of us realized!

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JLM 4 years, 11 months ago

@ TW ---

Of course, there are significantly fewer tenants because of the economy. The tenant is the MOST IMPORTANT person in the landlord-tenant-bank relationship.

SB 700 is a long term plan and this is a short term crisis. The only truth about recessions? They eventually end.

I neither support nor oppose SB 700 but I do think the dialogue should be fact based and honest.

Low rents are not going to continue forever.

Obama does not have a plan as of yesterday --- well, one that works anyway.

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housepoor 4 years, 11 months ago

Twill, That is how most people get ahead, live in a cheapless desirable places, save your money, take a few risks and you will be rewarded.

Lewi. Steamboat did not create this problem, the fedbanksinvestorshomeowners did nationwide. The availability of loans to people who had no skin into the property they were getting a loan on and doing so with assumption of unrealistic real estate appreciation. Both lender and home owner share equal responsibility in that fiasco. And when did home ownership in America become a right and not a privilege? NOT EVERYONE SHOULD OWN A HOME. The one area we are at fault as a community is putting all eggs in the real estate basket even to the point of making tourism and hospitality an afterthought.

JLM, So when does this current situation go from being a short term crisis to a long term problem? Which I hope it doesn’t, this is no fun. But surely this crisis is going to last as long as the excessive growth of the 05-07 bubble. Regardless this crisis will have long term effect on the availability of capitol that will be available going forward.

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TWill 4 years, 11 months ago

I didn't say the tenant is any less important than the landlord or the bank. But I did say they're the least VESTED. I agree that they are very important in the T-L-B relationship.

But I do find it unusual that the party with the least to lose has the most leveage in the situation. And that my friend, is exactly what Obama has been preaching since he's came on the presidential campaign trail.

Well said Housepoor, your posts appear to be a product of excessive common sense.

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JLM 4 years, 11 months ago

The Great Depression was only broken by the full employment of WWII --- women in the factories and men in the military. Almost 15 years?

The S & L crisis impact lasted for almost a decade.

We are in for a pretty damn long haul exacerbated by a lot of bad short term political policy. My prediction is we are still having this same basic conversation 4 years from today. The eye of the storm --- the short term crisis --- begins to disappear in Q1-2011 after the impact of the mid-term elections.

There are other shoes to fall for SBS. Note the impending foreclosure sale of Intrawest reported just today. This is not going to be good for SBS.

The leading indicator will be the advent of real job growth which will occur when fiscal policy is changed and governmental "stimulation" is abandoned. Unemployment and underemployment continues at record levels through 2010. 1 in 5 Americans is struggling today.

What is your most favorite Obama administration success story thus far? Hoax and chains?

Still a short term when compared to the life of SB 700.

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Steve Lewis 4 years, 11 months ago

House, I'll go with "too many eggs in one basket". And we seem loathe to let go of our speculative ways.

I agree with JLM that lower rents are a function, mainly, of fewer tenants. Our biggest industry, construction, is no longer our biggest industry. Many people moved here for those wages. Wages gone, they are gone, or going.

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Steve Lewis 4 years, 11 months ago

Governmental stimulation reversed a horrible jobs trend. The graph of job loss reports, month by month, is irrefutable. I agree there is a necessary end to govt stimulus, and hate the deficit impacts, but the alternative, tax breaks for the private sector was not the answer. With credit unavailable for small business, tax breaks would not have enough impact.

The banks have found a more lucrative derivatives playground.

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housepoor 4 years, 11 months ago

The markets today were interesting today. All the analysts were predicting a republican victory in mass would be good for the market as it would be more difficult for the gov to spend more $$ on stimulus etc. But I guess they had second thoughts when they realized the odds of a 2nd stimulus just got worse and the perceived strength of the economy is already priced in.

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Scott Wedel 4 years, 11 months ago

BTW, is it just me that notes the major discrepancy between Altira asking for 10 years to start construction on prime real estate while SB 700 is expected to nearly immediate build units and provide attainable AMI housing?

This expectation of SB 700 rate of construction has, as far as I can tell, another serious consequence. The entire financial calculations of how much SB 700 will cost the City is based upon the City having initial infrastructure costs that are reimbursed by SB 700 as construction (water taps, etc) is built. If SB 700 construction proceeds slower than projected then the project becomes cost negative for the City.

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weststmbtres 4 years, 11 months ago

There are 250 +/- vacant lots slated for development that are already in the city limits. These lots require no annexation for the developers to move forward. Why don't we bring these properties to the table under the same restrictions that are being placed on S700 and see how the market fares before moving forward with S700? S700 is being pushed along under the premise that there will be demand for the product when we simply don't know if that will be the case or not.

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JLM 4 years, 11 months ago

I would be extremely cautious at taking any encouragement from the decreasing rate at which jobs are reported to be being lost. And, in particular, at this time of year as the seasonal Christmas employment disappears and the desks of gov't beauracrats are cleaned up after the holidays.

When you have a hole in the bottom of a bucket and the water pours out, the pressure created by the water initially increases the volume at which the water is flowing out. Our economy is much the same. When the winds of joblessness and economic contraction begin to be felt, the low hanging fruit falls first followed by the increasingly more difficult jobs to do without. Said another way, the deadweight gets cast overboard first.

The last guys to lose their jobs may not have been "deadweight" and worse they may have been the breadwinners in their families and thereby are impacting not just a single job but the livelihood of an entire familial unit --- spouse and children included. The last job lost may be more devastating to the economy and social fabric of the country than the first job lost.

When one looks at the total unemployment --- unemployed, underemployed, involuntarily part time employed, unemployed and giving up/given up, new college graduates, new HS grads, returning vets --- about 1 in 4.5 of our countryment are in trouble and hurting. That is a huge number to live with and an even bigger number to reverse.

It has taken at least 2 years to get into this mess and it will likely take twice as long to reverse course.

The Obama administration's Stimulus and extension of unemployment benefits is not creating PRIVATE sector jobs. The reason why PRIVATE sector jobs are important is because if they are successfully created, they will or may continue after the Stimulus money runs out. New GOVERNMENT jobs will disappear as soon as the Stimulus money is exhausted. That is a given because the GOVERNMENT does not have an alternative source of revenue.

It is time to turn to tried and true fiscal stimulus based upon tax cuts and shrinking the cost of government. It worked for the US when JFK was in office and it will work now.

We have a detached philosopher king running the country when we need someone who has actually run a business. There is nothing wrong with having a philosopher king as President as long as you recognize that philosophy does not put bread on the table.

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