Four votes put question of sustainable STR Tax revenues for Brown Ranch in Steamboat voter’s hands
Each of the four votes in support of the question Tuesday came from council members elected in 2021 to address affordable housing.
Four Steamboat Springs City Council members voted to ask voters to dedicate long-term funding raised by a voter-approved tax on short-term rentals to the Yampa Valley Housing Authority’s Brown Ranch affordable housing project on Tuesday.
The 4-3 vote sends the question to Steamboat Springs voters in November, asking them if they are willing to allocate 75% of STR tax revenues to the 2,264-unit development over the life of the tax (2042), provided the housing authority meets certain performance metrics including completing 420 units in 6 years and 1,100 units in 12 years. If those metrics are missed, funding for the project could be reduced or cut off entirely.
The four members that supported sending the question — Joella West, Gail Garey, Dakotah McGinlay and Ed Briones — were each elected in 2021 on the mandate from voters to reign in short-term rentals and address Steamboat’s decades-long housing crisis. Tuesday’s referral of a ballot measure to voters becomes the third significant measure toward doing just that by this council, after passing limits on STRs and asking voters to tax them up to a %9 rate last year.
“We have a housing crisis and we need to move forward and I think this is the best option on the table,” Garey said, noting that housing was the pivotal issue when the four were elected.
“All this work that we have done so far — this is one big step towards accomplishing those goals,” McGinlay said.
The measure had initially passed 6-1 on Aug. 22, with just council member Heather Sloop opposing then. Sloop again opposed sending the measure for voters, expressing her significant concerns about several aspects of the project and that she felt this question does not need to be referred now, as this council can allocate STR revenues from this year and next without a vote.
Council President Robin Crossan and member Michael Buccino each flipped their votes, saying that locking in the 9% was a step too far. Buccino had expressed that concern about this at first reading, and Crossan has expressed similar concerns as well. Still, on Tuesday Crossan said she could not support locking in the rate, as it wouldn't be consistent with the “up to 9%” language voters saw last year. Crossan was a partial catalyst to the “up to” language being in last year’s STR tax question, which ultimately passed with more than 62% of the vote.
“I support the Yampa Valley Housing Authority and housing for our community,” Crossan said. “I made a promise to voters when we talked about the STR tax and I said multiple times up to 9%. … I don’t feel that I can deceive the public by what I said one day and now I’m saying it’s different the next.”
Whether or not the 9% detail was in the ballot question, the city does commit to keeping the tax rate at 9% as part of the current draft annexation agreement. This was a concession the city made in exchange for YVHA providing land for a regional park, a request the city has since dropped. (The plan now is for the city to buy land near Brown Ranch for a regional park.)
Garey argued that it was transparent with the community to include the detail in the question. She also clarified with City Attorney Dan Foote that the tax rate could be changed in the future if both the city and YVHA agreed, though it could get complicated. If YVHA has made commitments to its development partner, it could prevent them from agreeing to a change.
If approved, the money would theoretically flow to the housing authority, but in reality, the first years of funding will simply go from one city account to another. This is because the annexation agreement as written requires YVHA to pay its share of city infrastructure projects with STR tax revenues before it can be used elsewhere. That funding will be held by the city to build infrastructure projects like widening U.S. 40, extending the Core Trail west, building another fire station and for parks.
Once YVHA’s share of those projects has been paid for, STR revenues could be used for on-site infrastructure for vertical construction, two pieces that are fully on the housing authority to secure funding to build.
If the measure fails with voters, the city can still allocate 75% of annual STR revenues to YVHA for Brown Ranch as the question intended, but YVHA would have no recourse if funding was taken away by a future council.
Kathi Meyer, YVHA Board Member who sits on the annexation committee, said while there has been a lot of talk about how costs involved in Brown Ranch, voters should consider the cost of doing nothing.
“We’re going to have to explain it,” Meyer said. “The community last year understood the need, so we’re going to go back to the same people.”
Full Ballot Question as approved Tuesday:
Without increasing taxes or imposing any new taxes, shall the city of Steamboat Springs be authorized to allocate 75% of its short-term rental tax revenues through 2042 to the Yampa Valley Housing Authority (“YVHA”) for affordable and attainable housing at Brown Ranch, including infrastructure, and to agree not to reduce the current 9% tax rate during the term of this commitment, with the commitment being contingent on YVHA’s timely completion of affordable and attainable housing units, all as set forth in section 9 of the City and YVHA September 2023 Annexation Agreement between the City and YVHA, with the city's commitment regarding short-term rental tax revenues being seen as a multiple fiscal-year financial obligation within the meaning of Article X, Section 20(4)(B) of the Colorado Constitution?