Steamboat's Housing Opportunities Strategic Plan prioritizes Brown Ranch while trying to make other short and long term investments in housing.
The draft of Steamboat Springs’ Housing Opportunities Strategic Plan presented to City Council last week starts with the foundation that council will prioritize the Brown Ranch’s success, but it doesn’t stop there.
While Steamboat’s most obvious housing opportunity is the parcel that voters will consider for annexation in March, the strategic plan seeks to lay out strategies beyond the Brown Ranch that hope to both directly and indirectly spur more housing locally.
The plan notes that the average available rental unit in Steamboat is going for about $3,500 per month, which would require a household income of about $140,000. Since 2000, increases in home prices have outpaced increases in wages in the Yampa Valley. Since the onset of the pandemic, these numbers have seen an even starker diversion.
Council discussed various concepts in the plan last week, but didn’t make any final decisions about which strategies the final draft will include and which are at the top of their priority list. The final version of the plan is expected to come before council for adoption later this year, potentially in May.
Commercial linkage fees
One strategy being considered is a commercial linkage fee, which would be assessed on new commercial developments and could potentially raise more than a million dollars a year to support housing efforts. The idea is that commercial development creates jobs, which in theory increases the need for housing.
To put a commercial linkage fee in place, the city would need to conduct a nexus study that would look into the dynamics between commercial development and housing demand. This study would then be the basis for the fee assessed.
Linkage is a tool used in other mountain communities and Steamboat used to have such a fee in place. Based on current projections of commercial development, a linkage fee could generate about $1.3 million a year.
Inclusionary zoning can be somewhat similar to commercial linkage, and Council discussed both concepts last week.
With inclusionary zoning, new residential development can be required to build affordable units or pay a fee depending on how the program is designed. Steamboat used to have exclusionary zoning as well, but that too has been repealed.
Market rate to affordable conversion incentives
The strategic plan proposes two main ways to incentivize the creation of new affordable housing units by offering money toward a project in return for a deed restriction on the property. This would primarily be done through new housing construction, with a new project potentially receiving financial support from the city in exchange for a certain number of units being restricted to certain incomes.
Another way to convert market-rate housing to affordable would be to provide financial assistance to home buyers if they agree to place a deed restriction on their property. The deed restriction could limit who the home could be resold to and how much it could be resold for.
Deed restrictions are an important tool in other mountain towns, but are not as prevalent in Steamboat. In Breckenridge, 73% of units occupied by long-term residents are subject to a deed restriction. In Aspen, 70% of units have a deed restriction. In Steamboat, just 8% of units occupied by residents have a deed restriction.
The strategic plan contemplates allocating $3.5 million to such incentives, though council did not have a robust discussion about how much money they would allocate if they were to pursue this strategy. Council members Steve Muntean and Joella West each said this strategy was one they were somewhat concerned about.
“I’m a little concerned about that one as to how big (of a financial commitment) is that,” Muntean said.
STR to LTR conversion
In an attempt to increase the long-term housing stock quickly, one option contemplated by the strategic plan is paying short-term rental owners to offer their units to long-term tenants.
The plan proposes trying an STR conversion program for the next two years and allocating $1 million toward incentives and staff to administer the program. It estimates that level of funding could spur 30 to 35 new long-term units that could house as many as 70 local workers.
Council members showed mixed support for a conversion program. While it has the obvious benefit of increasing available units quickly, the city has other opportunities that may be a better long-term investment in housing.
“In the short term it seems like we’re not investing a ton of money but we are receiving hopefully units as quickly as possible,” said council member Dakotah McGinlay. “But it’s not money that is going to pay for long-term and we have other long-term programs.”
Accessory dwelling units
From a policy standpoint, the strategic plan encourages the city to make it easier to develop accessory dwelling units, which typically rent for below-market rates.
The city already has favorable ADU policies, allowing them as a use by right in most zones across the city. Still, the process to develop ADUs can be daunting and it generally is not cheap.
“I think that’s just not being utilized,” council member Michael Buccino said about current city ADU policies.
One idea could be to provide some additional incentive to homeowners looking to build an ADU in exchange for a deed restriction on the unit that could restrict the rent or who could live there. Still, not every property will work for an ADU.
“The biggest thing that I’ve heard is they’re expensive,” said Planning Director Rebecca Bessey. “The idea of building an ADU has to pencil out, it has to make sense. … With the construction costs at the level where they are at right now, those numbers don’t always pencil.”
Housing advisory committee
While expressing general support for most ideas in the strategic plan, council members were the most skeptical about the suggestion to create a housing advisory committee.
The committee would feature key stakeholders from the community including the city, Yampa Valley Housing Authority and others. While there would be some value in such a group, several council members questioned whether they needed yet another committee to look at housing.
“I would like to see that fleshed out more understanding that we don’t need two of everything,” West said.
Top Photo Caption: The Yampa Valley Housing Authority broke ground on its Mid Valley project this fall. (Dylan Anderson/The Yampa Valley Bugle)