Staff capacity, funding prevented progress on developing new inclusionary zoning or linkage fee policies last year, while the value of construction projects in Steamboat exceeded $355 million.
Editor's Note: This story has been updated to correct references to the $500 million project at the base of Steamboat Resort. The project is called The Stockman.
Steamboat Springs City Council has been talking about putting together a new series of inclusionary zoning policies since early last year, but a presentation Tuesday showed that a lack of funding and staff capacity has led to almost no progress on that effort a year later.
Meanwhile, Steamboat Springs saw more construction in 2024 than ever before, according to a year-end report from the Routt County Regional Building Department. The value of that construction exceeded $355 million in the city last year — an increase of 55% over 2023 and an increase of 173% when compared to 2020.
“I look at The Stockman that we just approved and it has absolutely zero workforce housing whatsoever because it is not on our code,” said Council member Michael Buccino, referencing a $500 million hotel and condo project at the base of Steamboat Resort that council gave final approval on last week. “What could we have gotten had we had even the original one still on the books?”
The value of The Stockman is not included in numbers for 2024, as this is calculated when projects apply for a building permit. Not all construction would be subject to an inclusionary zoning policy, sometimes referred to as a linkage fee, either. These policies typically would require a developer to provide workforce housing units as part of a project or pay a fee in lieu.
Figuring out how many units would be required or what the fee in lieu would be requires the city to conduct a nexus study as justification. City Manager Gary Suiter said that study would take several months in addition to the time it would take to develop and approve a policy. He estimated the city is at least nine to 12 months away from having a new policy in place.
Council did allocate money toward conducting a nexus study in 2024, but city Principal Planner Brad Calvert said it wasn't enough to actually do the work. Even if it had been, Calvert said the planning department lacked staff capacity anyway.
But support for adding such a policy appeared to be waning among the city’s elected officials on Tuesday. While they did ultimately agree to continue to move forward with the nexus study, some expressed concern about the effect such a policy would have on the development community, a group that successfully got the city to pause its inclusionary zoning policies in 2013 and repeal them in 2019.
“When you talk about inclusionary zoning and the impact it might have on developers and what not, if the market is heading south or going to head south in the next year or two, it is not a good time to be putting inclusionary zoning in place,” said Council member Steve Muntean.
The value of projects being built in Steamboat has increased every year since 2019, according to the building department report. The value of construction in 2025 already looks to exceed 2024 when considering the value of projects like The Stockman.
Another reason given was that the city already has money to support housing from the 9% tax on short-term rentals that it is not effectively spending.
“I will push back on this inclusionary zoning thing,” said Council member Bryan Swintek. “I feel like we are looking at the missed potential and how to get more money in when we already have this STR rate at 9% and we have a pot of money that we are not administrating properly.”
“What we have is the STR pot of gold,” said Council member Joella West. “I think it is a mistake for us to be distracted from that. … Let’s walk away from the things that either won’t work because the staff doesn’t have the capacity for it, or it might work, but by the way, the linkage fees failed the last time we had them. Let’s make sure we talk about why that failed before we talk about reviving that again.”
At least four council members supported moving forward with a nexus study to inform an inclusionary zoning policy, though no one explicitly said it was their top priority. Council members also said they wanted to try to boost staff capacity, potentially with the use of STR tax funds.
“I would also support hiring someone to help move this along, the inclusionary zoning,” said Council member Amy Dickson. “I feel like we just talk about it. Either we are going to kick the can down the road more or let’s just make a decision.”
Steamboat used to have an inclusionary zoning policy and the city did get units out of it, but the it was suspended in 2013 at the request of the development community. After several years of continuing a moratorium on inclusionary zoning, council repealed its policy in 2019.
Adding back an inclusionary zoning or linkage fee is part of Council’s Housing Opportunities Strategic Plan, a plan that they got a preview of in January of 2024. That plan was officially adopted in August.
“It’s not about the money. We have a bucket full of money, it’s about impact,” Buccino said. “It’s about impact that these developers are bringing to our community and are going to need employees and we need to be able to say you need to include something. I would rather see workforce housing at the base of the mountain instead of being bought and shipped away to Hayden.”
Muntean rattled off numerous projects that are already in the works in town that will require hundreds of new employees as they are completed, naming The Stockman, hotels being built by Marriott, a new Holiday Inn project and other developments that are not being built to support the local workforce.
“I’m estimating 500 potential employees that we are going to need in the next three years — 500,” Muntean said, sharing his back of the napkin estimate. “Where are these people staying? What are people going to do to find employees? … This is going to be a disaster.”
Former City council member Jim Engelken criticized Council for “dragging its feet on inclusionary zoning” in a letter to the editor published by Steamboat Pilot & Today on Wednesday.
“When the issue of a $500 million real estate development at the base of the ski area, called The Stockman, came before the City Council on Dec. 3, the developer offered, in a brief moment of altruism, public access to the ground floor of the project as a public benefit,” Engelken wrote. “What a ridiculous statement. I suppose we should feel honored that the lowly local will be allowed to co-mingle with their clientele. No, we’ve been insulted.”
Council agreed to move forward with a number of strategies to address housing on Tuesday. This includes continuing to solicit proposals from developers to use STR tax dollars to create workforce housing. This work has been ongoing since July and Council heard a proposal Tuesday that would pay the developer of the already completed Steamboat Basecamp apartments project on the west side of town in an attempt to make units there more affordable temporarily.
Council will consider the second reading to allocate STR tax dollars to building three of the Yampa Valley Housing Authority's Cottonwoods at Midvalley project next week, a request that stemmed from the request for proposals to spend STR tax revenue as well. If approved, this would accelerate delivery of units and convert a rental project into a for-sale project offering condos that are expected to start in the mid-$200,000s. Another proposal to use STR tax dollars is expected in the coming months, Calvert said.
Another concept moved forward on Tuesday was developing a short-term rental to long-term rental conversion program, an initiative talked about in January of 2024 that has also seen almost no progress due to lack of staff capacity. A third-party proposal received in August would have required $115,000 in administrative costs to spend just $320,000 in incentives to STR owners. City staff felt that proposal was "out of wack" in terms of administrative costs compared to the incentives offered.
The city's 2025 budget does include more funding to add staff, including a new full-time housing innovation specialist funded through a combination of state grants and a private donation. Council expressed a desire to increase capacity beyond this new position with the use of STR tax dollars — an idea that City Attorney Dan Foote was skeptical would fit within the ballot language of the STR tax.
The city is also continuing work on a new plan for Brown Ranch, a process that wouldn't pose a new annexation plan for the YVHA property to Steamboat voters until November of 2026 at the earliest.