Steamboat rental market faces continuing scarcity
January 10, 2014
Steamboat Springs — The Steamboat Springs rental market can be notoriously hard to get into at certain times of the year, and recent trends could be making it even tighter.
In recent years, the number of renters in Steamboat has grown faster than the number of rental units. Rents have not risen significantly during the same time period, creating a dilemma where rental units are scarce and the ability to build new inventory is even rarer.
"We're pretty much full," said Curt Weiss, owner of Central Park Management, which has between 130 and 140 units across Steamboat.
"The market is strong for rentals," he said, adding that there's been virtually no rental units built in the past six or so years.
But rates for rental properties still are lagging behind the supply tensions.
"We're not back to 2007 or 2008 rates at all," he said. "We're starting to approach that."
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Meanwhile, Weiss said, people's expenses continue to go up, and it costs him at least 10 percent more to operate his company, as well.
Like the nation as a whole, the majority of Steamboat residents live in homes they either own free and clear or have a mortgage on.
However, the number of residents who live in rental units was 3,269 in 2010 and 4,257 in 2012, according to the American Community Survey. The American Community Survey is an estimate based on five years of data.
Rental units did not see the same rise during that time period, according to the ACS. The survey estimated 1,707 rental units in 2010 and 1,807 in 2012.
With five-year estimates, there's some data overlap in the 2010 and 2012 releases, but 2010 was the first year the American Community Survey provided expanded housing information.
Rental rates have remained somewhat stable despite the gulf between the rise in renters and trickle of new units.
According to the ACS, median rents were $1,210 in 2010, $1,286 in 2011 and $1,255 in 2012.
The Colorado Division of Housing also tracks rental rates, but in Steamboat Springs, only multifamily developments are surveyed.
The average and median rents have, with few exceptions, stayed between $700 and $800 from 2008 to 2012, according to the Colorado Multi-Family Housing Vacancy and Rental Survey.
Weiss said rents still need to come up before someone can make a return on building new inventory.
He said Steamboat's current situation reminded him of the 1980s. In 1986, Weiss said, he pulled the only multifamily building permit all year.
"We're back into that lull," he said.
There were five multifamily building permits in 2013 in Steamboat. One was the structure that Horizons Specialized Services is building for its clients, and the other four were for the Emerald Height townhome project, which is being developed on lots that were part of the failed Eco Corral project.
The 42-unit Skyview Apartments project is slated to begin construction this spring.
"The primary markets seem to be doing quite well," Weiss said about areas like Denver, which saw incredible growth through most of 2013. "But a lot of the secondary markets are not doing much at all."