City is working to put out a request for proposals this month that could allocate STR tax dollars to a project before the end of the year.
Steamboat Springs officials are looking for proposals from developers to build affordable housing with the help of the city’s short-term rental tax revenue, potentially funding qualifying project to the tune of $5 to $10 million by the end of the year.
The city plans to put out a request for proposals from developers this month with the hope of presenting potential projects to City Council in September. Proposals would request a certain amount of short-term rental tax revenues from the city in order to deliver housing units that are deed restricted affordable.
These proposals could potentially include buying down currently planned market rate units to be accessible to lower incomes, financing to support an affordable project already in the pipeline or converting existing market-rate units to units that are deed restricted affordable. City Principal Planner Brad Calvert said the goal is to spur projects that would deliver units in the next two to three years, but maybe even sooner.
“The two to three years, in many ways … we think of that as the outward bound of this,” Calvert told council during a work session last week. “Let’s say you make a funding decision in December. There is nothing that would prevent the right project to actually deliver a unit in April.”
The city hasn’t spent much of the revenue it has been earning from the 9% Short-term Rental Tax voters approved in 2022 and that went into place on Jan. 1 of last year. Part of this is because voters had allocated 75% of STR tax revenues toward Brown Ranch development in November 2023. That ballot measure hinged on a section of the Brown Ranch Annexation Agreement voters rejected in March.
The city has paid $2.6 million in a loan to developer Gorman and Co. for units in their under construction Riverview project in downtown Steamboat. Council has also committed to fund predevelopment work for a potential housing project on U.S. Forest Service land off of Hilltop Lane.
City finance Director Kim Weber said the city currently has about $15 million in STR revenues in the bank, a sum that grows to $21 million by the end of the year, per Weber’s estimates.
“That’s a game changer by all stretch of the imagination,” said Council President Gail Garey in reference to the funding.
“Not until we spend it wisely,” responded Council member Joella West. “That’s when it changes the game.”
The RFP process offers an even playing field to any developer that has a potential project, including public entities like the Yampa Valley Housing Authority. Calvert said proposals could potentially even include adding a deed restriction to existing housing in order to preserve it for local workforce into the future.
“Anyone and everyone,” Calvert said. “The idea is that this is an open solicitation process and the rules apply the same across the board.”
The timeline presented last week would have the RFP sent out this month, with responses due back in the middle of August. Those proposals would then be presented to council in September, where they would identify which projects they would like to consider further.
Proposals will be evaluated based on financial feasibility, how STR revenues will be leveraged to spur other funding, the community benefit of the project and the potential risk of the project. Projects will be reviewed by the city’s new Ad Hoc Housing Advisory Committee, but any funding decisions will be made by City Council.
While projects that offer deeper affordability are likely to rank higher, Council member Amy Dickson said she wanted to ensure that this funding could go toward other projects serving higher incomes as well, as there is need at income levels throughout the housing market.
“I would certain expect that probably the majority of the development, the investment would be going toward the lower [Area Median Income] just because that is where the most significant need is,” said David Driskell, a consultant with the Community Planning Collaborative. “That’s not to say that is the only place to invest.”
Top Photo Caption: The city's RFP process hopes to spur additional affordable housing units in the near term, potentially having proposals from developers that are already under construction, such as this project on the corner of Walton Creek Road and Village Drive. (Dylan Anderson/The Yampa Valley Bugle)