City Council eyes real estate transfer tax in west Steamboat annexation
June 1, 2017
Talks between the Steamboat Springs City Council and real estate developers who want to build 444 new housing units in west Steamboat are starting to heat up.
To help fund more affordable housing projects in the city, the council is eyeing a 1 percent transfer tax on the sales of the homes Brynn Grey Partners wants to build.
The transfer tax appeared to be the most popular idea to quell concerns the council has about the long-term affordability of the homes that would be built on the former Steamboat 700 property.
Council members noted they will likely be making big concessions if they ultimately approve the annexation of the neighborhoods.
"We want this product for this community, but you're also asking for us to make a lot of big leaps," Councilman Jason Lacy said.
As an example, Lacy said Brynn Grey is proposing to chip in about $700,000 for transportation improvements near the housing development when city officials estimate the contribution could be as high as $13 million.
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"That's a pretty big bridge to gap," Lacy continued. "We really are interested in long-term affordability, and I think we're going to miss some of that in this development. But if we can get a funding source for low-income and entry-level housing, that will help."
Lacy said a permanent funding source for affordable housing, such as the transfer tax, would help bridge the gap and make him more inclined to support concessions the city might make to accommodate the annexation.
Councilwoman Kathi Meyer first raised the idea of the voluntary transfer tax.
She predicted it could generate a significant amount of money as homes are sold and resold over the years.
Brynn Grey CEO David O'Neil initially appeared cold to the idea of the tax.
"I think it's a terrific idea if it's applied throughout the community," O'Neil said.
He then questioned whether it would be legal for the city to single out the Brynn Grey development for such a tax. He also feared that a transfer tax would make the homes less competitive in the market.
Council members pushed back on the concerns about such a tax.
They noted multiple developers in Steamboat have voluntarily agreed to impose transfer taxes on the sale of units in their developments to support different things in the community.
For example, a transfer tax on the sale of units at Howelsen Place benefits public art in Steamboat. And a similar transfer tax on units at the Olympian benefits the Steamboat Springs Winter Sports Club.
More recently, the owners of the RiverView property have proposed a transfer tax to benefit improvements in the Yampa River.
Council members suggested the proceeds of a transfer tax on homes in the Brynn Grey neighborhoods would be sent to the Yampa Valley Housing Authority.
Brynn Grey would like the prices for the new units it wants to build in west Steamboat to be comparable to the price tags on the homes, duplexes and townhomes the company has developed in the Lincoln Park at Wellington Neighborhood in Breckenridge.
There, townhomes are currently selling for about $272,900, and duplexes are selling from $315,900 to $350,900.
Deed-restricted single-family homes are selling for $413,900 to $429,000, and single-family market rate homes are selling for $529,900 to $849,900.
Councilwoman Heather Sloop expressed concern about these targeted price points.
She said single-family homes above $400,000 would not be serving Steamboat’s middle class.
And Council President Walter Magill said he was disappointed Brynn Grey did not come to the table with a spreadsheet detailing the “headwinds,” such as land and infrastructure costs, the company thinks could raise the prices of the homes beyond the targeted price points.
Brynn Grey and the council plan to keep discussing the prospect of the annexation at a June 13 work session.
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