Steamboat City Council wants to suspend affordable housing requirements
July 3, 2013
Steamboat Springs — The Steamboat Springs City Council on Tuesday night voted, 5-1, to move forward with a yearlong suspension of the city’s rules that force residential developers to provide a certain number of affordable units, or pay a fee toward their creation.
The council’s proposed suspension of the 7-year-old rules came after several local developers criticized the ordinance and called it an unfair tax on them.
The majority of the council agreed, calling the current ordinance flawed, wrong and unfair.
Criticism of the city’s affordable housing ordinance started years ago when some developers complained they were finding it difficult or impossible to sell the affordable units they were creating.
"Whether we’re in a 2006 economy or the current economy, this ordinance is wrong," council member Cari Hermacinski said. "We’re taxing housing because we want more housing, but it didn’t work."
Hermacinski favored repealing the ordinance Tuesday, but her motion failed before the council agreed to suspend it instead with the intention of having the city work with developers and the community to come up with a better plan.
Some council members said that if the community supports affordable housing, it should be funded with a new tax supported by voters.
Council member Sonja Macys was the only one on the dais to oppose suspending the ordinance and feared that by doing so without a clear plan to draft a new one would hurt efforts to promote affordable housing in the community.
The Community Housing Inclusionary Zoning requirements were adopted in 2006 in a much different economic climate.
Several multimillion-dollar housing projects were going up in Steamboat, and the city adopted the rules with the intent that the units and fees charged to the residential developers would help satisfy the demand they were creating for affordable housing for their employees.
A similar ordinance called linkage also created the affordable housing requirement for commercial developers.
But linkage was suspended indefinitely by a new city council.
Seven years later, criticism from residential developers, including one who is facing a fee of more than $100,000 on his development to satisfy the rules, has spurred the city to re-examine the ordinance on residential properties.
According to City Planner Rebecca Bessey, 96 income-qualified, deed-restricted units have been created in the city.
But less than a third of them were constructed as a result of the ordinance the council is moving to suspend.
The ordinance has, however, provided hundreds of thousands of dollars of support to the city’s community housing fund.
Bessey wrote in a memo to the council that from 2008 to 2012, the Community Housing Fund generated $844,296 in support of community housing, including $321,436 for down-payment assistance.
The city’s planning staff agreed that the ordinance is in need of review and currently offers developers "more sticks than carrots."
Tuesday’s suspension was not the preferred course of action for the Yampa Valley Housing Authority, a financial beneficiary of the rules.
"We would have preferred they kept the existing ordinance, but we do sort of recognize the program needs to be flexible and change as our needs and our market has changed," Housing Authority Executive Director Jason Peasley said. "I’m just hopeful we can continue to have a good conversation about our housing policy and come up with something that works. I would hate to see us abandon housing as a priority."
To suspend the ordinance, council must approve a first and second reading of the action July 16 and Aug. 6.
The council indicated that no refunds would be given to developers who already have paid a fee as part of their community housing plans.
City Attorney Tony Lettunich said he would look to the council to decide how a suspension of the ordinance will apply to developers who currently are going through the city planning process.
He said anyone who hasn’t had to pay the fees after the ordinance officially is suspended is not likely to have to do so.
To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com