Steamboat Springs City Council will be presented details of a potential short-term rental conversion program on Tuesday.
Steamboat Springs City Council will consider whether to pursue a program to convert short-term rentals to long-term workforce housing on Tuesday, a concept that has shown varying degrees of success in other mountain towns.
The idea is one of four “near-term impact” strategies identified in the working draft of the Steamboat Springs Housing Opportunities Strategic Plan. That draft will be presented to Council for the first time on Tuesday.
The 86-page document seeks to take a long-term view of housing in Steamboat Springs but also lays out actions the city can take in the next two years to improve the local housing situation, which the plan notes is at “a sense of crisis.”
In addition to a STR conversion program, the plan suggests ideas like subsidizing current market-rate housing to make it more affordable, incentivizing the construction of accessory dwelling units and identifying emergency assistance funds for housing
“While significant work is underway to address this crisis, many of the actions will take several years before they start delivering results,” the strategic plan reads. “Strategy One is focused on actions the city and its partners can take to deliver affordability within the next two years.”
Council first discussed a STR conversion program back in May after seeing similar programs in Winter Park and Summit County successfully create housing units. While those programs did lead to additional units, they didn’t come cheap.
In one year, Winter Park got 47 bedrooms for about $385,000 in incentive payments to STR owners. Summit County (the program only applied in Breckenridge and unincorporated parts of the county) got 87 bedrooms for about $635,000.
As laid out in the strategic plan, the city could pay STR owners cash incentives of between $7,500 and $17,000 depending on the size of a unit if they were willing to rent their place for 12 months. The rents would be set based on 80% area median income. For a single person, 80% AMI equates to a monthly rent of roughly $1,500, according to the Colorado Housing and Finance Authority.
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.
“While these STR-to-LTR conversion programs are not an ideal long-term fix, they do provide a relatively quick way to make new rental units available for the local workforce,” the plan reads.
Another strategy contemplated by the plan is incentivizing developers or homeowners to place a deed restriction on their property by offering low-interest loans, grants or other financial incentives.
One aspect of this strategy draws on Breckenridge’s Housing Helps program, which offered homeowners a one-time payment of between 15% and 30% the value of their home in exchange for a deed restriction that limits the home to workforce housing in perpetuity. In the first year of that program, Breckenridge spent just over $1 million to get 23 deed restrictions — an average cost of $46,000 each. As of September, the program has deed-restricted 64 total units.
The likely funding source for these strategies and others listed in the strategic plan — should council choose to pursue them — would be the short-term rental tax. Through November, the STR tax has raised $8.7 million. City Council will be presented the housing strategic plan during its work session on Tuesday.