By Keller Northcutt
Like many Colorado resort towns, Steamboat Springs is experiencing a serious housing shortage, one that has dramatically worsened since the pandemic. The town has an immediate need for 1,400 homes to house local, full-time residents, according to the Yampa Valley Housing Authority (YVHA). That number is expected to nearly double in the next twenty years. The crisis is forcing many locals to leave town.
Steamboat has reached a tipping point: if they want to keep their workforce and local community, the city quickly needs to develop more housing.
“We have nearly exhausted the residential opportunities within the existing areas in Steamboat. The need for new land is the primary factor in addressing our serious housing issue,” said Jason Peasley, Executive Director of YVHA.
In 2021, YVHA was given an anonymous donation of $24 million to purchase Brown Ranch, a 534-acre property in West Steamboat, for the development of affordable housing. Brown Ranch, an active ranch from 1909 to early 1980s, is within the designated urban growth area of Steamboat and would be flanked on both sides by existing neighborhoods.
Like many mountain communities in Colorado, housing is a growing challenge for Steamboat residents due to the high cost of living, competition with second homeowners for real estate, and the increase in short term rentals. Fifty-two percent of Steamboat homes are owned by part-time residents. There are also more than 2,700 short-term rentals in and around the Steamboat area.
“We have to share our scare housing resources with the world quite frankly, with second homeowners and visitors,” said Peasley.
Many residents are going to extremes in an effort to continue residing in the area. Sheila Henderson, the Community Outreach Manager at Brown Ranch, said it’s not uncommon for multiple families to live in a single household.
“Many households have a family per bedroom, and they are paying $1,000 per month to live in that bedroom. That is not safe or healthy housing,” she said.
Steamboat is not alone in the struggle, as other mountain towns are seeing residents living in their campers or cars, or commuting over mountain passes every day. In an effort to create more housing, Telluride attempted, and failed, to cap short-term rentals in 2021. Similarly, Silverton’s short-term rental listings increased 160% since 2018, pushing some locals into “glorified homelessness,” said DeAnne Gallegos, Executive Director of the Silverton Chamber of Commerce.
Many people, including those with essential professions such as healthcare workers, teachers, police officers, and restaurant staff, are leaving town to find affordable housing. The exodus of employees is leading to staffing shortages across businesses and industries, and many employers are shutting down, decreasing hours, or overworking existing employees.
“[Steamboat has] the second fastest disappearing workforce in the state of Colorado next to Telluride…The 25 to 44-year-olds are leaving town, and they are the majority of the people working,” said Henderson.
Many people who work in Steamboat commute from neighboring towns such as Oak Creek, Hayden, and Craig.
“We have 2,000 people commuting from Craig every day,” said Henderson, adding that a daily 85-mile round trip is challenging to justify.
According to statistics from Brown Ranch, 2,100 local jobs were added to Routt County between 2014 and 2019. That should have resulted in an additional 1,135 local-serving housing units added to the local inventory. Instead, only 34 units were added, while the seasonal rental unit inventory grew by over 300 units.
The housing crisis is exacerbated due to a lack of available construction labor, restrictive land use and zoning regulations, a scarcity of developable land, and increasing costs in building materials. Since 2007, Yampa Valley Housing Authority has acquired or built a number of local housing developments to help address the need, yet the demand continues to rise. Jason Peasley of YVHA said that the need for new land is the primary factor driving the housing shortage.
The recently presented plans include a mix of multi-family apartments, single family townhomes, and single family detached homes, as well as both purchase and rental options. The goal is to eventually create a self-sufficient community with a future school site, grocery store, medical services, a daycare center, and other retail and nonprofit services.
“Brown Ranch offers the residents of Steamboat Springs an unprecedented opportunity to take control of our housing future and design the community in which we want to live,” said Peasley. “Every single house we are going to build up there will be affordable to the local workforce, and that’s the bottom line.”
On October 18th, YVHA submitted a petition to the City to annex Brown Ranch into Steamboat Springs. This is the final step required before beginning infrastructure construction, and one that has been rejected twice before due to concerns from City Council on funding sources and community engagement.
After another year of public engagement, including feedback from 3,300 local residents and over 230 meetings, the Brown Ranch Steering Committee incorporated the community’s input into their plans. YVHA will implement a number of safeguards to ensure affordability, such as federal Low-Income Housing Tax Credits, only selling built units rather than undeveloped lots, and prioritizing high-density development to save on costs. They are focused on sustainability, safety, and walkability of the community.
Once the annexation is completed, Peasley hopes that a year from now they will be getting their first subdivision plans approved. Brown Ranch is expected to cost nearly $400 million total in infrastructure, with only 25% of that covered by government agencies such as Colorado Department of Transportation and local, state, and federal grants.
A significant funding source was secured in the recent elections when local residents approved a 9% tax increase on short-term rentals (STR) to help fund the Brown Ranch project. It is estimated that the tax will collect about $11.7 million for Brown Ranch in 2023 alone, which could become a model for other communities. The tax increase brings the total taxes on short-term rentals to 20.4%, which is more than double Vail’s 9.8%, and is now the highest rate in the state.
Support for the proposal was divided in the Steamboat community, with nearly 38% of voters opposing the tax. Those in the lodging industries believe that an increase in taxes will lead to less visitors and less business. For other local businesses who are lacking staff due to housing, the STR tax is one solution to help with employee retention and increasing affordable housing options.
“(Short-term rentals) are running commercial operations and do not pay commercial property taxes like I do for my business,” stated local business owner Andrew Beckler, founder of Grass Sticks Bamboo Ski Poles. “In fact, a hotel or any commercial business pays more than four times the taxes a STR currently pays.”
The quest for affordable housing is not unique to Steamboat, but the available land for Brown Ranch and the approval of the short-term rental tax gives their community an advantage in finding a solution.
“Regardless of how we got here, we are at a crossroads,” said Peasley. “Housing is important to the character of our community.”
The first homes of Brown Ranch are expected to be completed early 2028, so for many residents, there are still years ahead of car-camping, dorm living, and tiresome commuting, but it appears a solution is on the horizon.
Does your community have a creative solution to the local housing crisis? Share what’s happening in your neck of the woods in the comments below.
