Steamboat has added $68 million in single-family houses this year, but that is just 51 homes
Steamboat Springs has added more than $68 million worth of single-family homes through November of this year, but that construction has done little to ease the local housing crisis, adding just 51 new homes.
According to a Steamboat Pilot & Today analysis of building permit data from the Routt County Regional Building Department, the city is adding homes faster than it is residents, but those properties are out of most people’s reach.
On average, a new home built in Steamboat this year was valued at a staggering $1.3 million — well out of the price range of most teachers, nurses and child care workers that have become increasingly difficult to hire locally.
The average value on new home construction within city limits has jumped about $600,000 since last year, as construction continues to see a boom that has forced the Routt County Regional Building Department to add staff to deal with increased inspections.
“Who are we building houses for?” County Building Official Todd Carr asked rhetorically, pointing to the project evaluations. “Would that fit workforce housing or does that look far above and beyond what a local worker could afford?”
The high value of local properties can be seen when looking at other types of permits, as well. For example, a recent permit to build a deck valued the addition at $200,000. In comparison, the median cost of a starter home nationwide was $260,000, according to Realtor.com.
“That’s got to go on a huge castle of a home,” Carr said of the $200,000 deck.
Only one other time in the past two decades has the average value of new homes in Steamboat reached seven figures. That was in 2013 when 18 homes were valued at a little more than $1 million each on average.
And it isn’t just happening in Steamboat. Across Routt County, 78 other homes built so far this year are worth about $108 million collectively and average $1.4 million each — an even higher mark than Steamboat.
“(Housing) isn’t a problem if you got a million bucks to spend on a house,” Routt County Commissioner Tim Corrigan said. “There is a lot of money sloshing around out there. There is a lot of people with assets looking for a place to spend it. Why not buy a house in Steamboat?”
While increased construction has led to previously unthinkable building use taxes collected by the county — 218% higher than projected in 2021 — Corrigan said he doesn’t think it is good for the community.
“That activity has worked to make housing unaffordable for the workforce,” Corrigan said.
According the county’s 2020 year-end report on building permits, construction between 2010 and 2020 has added about 1,400 units locally. Over that same span of time, Routt County’s population grew by 1,320 people, according to the 2020 census.
|Single-family housing units constructed in Steamboat this year (Source: Routt County Regional Building Department)|
|Month||Number of units||Valuation||Valuation/Unit|
|2021 total through November||51||$68,058,589||$1,334,482|
Looking at the bigger picture, Jason Peasley, executive director of the Yampa Valley Housing Authority, said overall, there is more housing than people that live in Routt County, which isn’t uncommon for a resort community.
“That is just the paradigm of a ski town that has a large second-home owner population,” Peasley said.
It is important to know whom the housing is built for, he said.
If a new construction is in the high-priced Sanctuary neighborhood, it is unlikely a local will be living there full time, whereas if it is one of the housing authority’s projects, it is sure to be a local living there.
Corrigan connects this overbuilding to purchases made by second-home owners and short-term rentals.
“Short-term rentals, in my view, do not benefit the citizens of Routt County; it benefits people from out of town that are looking to buy a second home and be able to generate enough revenue off of it so they can come up and visit,” he said. “Our policies can’t work to disadvantage the workforce that lives here.”
Corrigan said he believes there should be a cap on short-term rentals, a policy decision that is largely in the hands of the Steamboat Springs City Council and not county commissioners.
Short-term rentals are already prohibited in unincorporated parts of Routt County, though Corrigan said there are about 200 of them out there. AirDNA, a website that tracks short-term rentals, reports there are about 2,700 such rentals in and around Steamboat Springs.
Corrigan said the county would hire a code enforcement officer next year to better regulate the units in its jurisdiction, which could require taking owners to court.
Another issue is taxation, which Corrigan said needs to be dealt with at a state level. He pointed to three hotels that have recently converted into workforce housing, saying he believes they can’t compete with short-term rentals when they have to pay much higher commercial property taxes.
Constructing large multifamily buildings with a lot of units was something seen more frequently before the Great Recession, but recently, it is only really being done by the housing authority.
Peasley said they are able to compete for contractors with high-dollar residential projects because of their project’s scale, but they wouldn’t be able to build just one or two houses at a time. In addition to the cost of materials, land is also a significant expense, he said.
The authority’s latest project on Anglers Drive is expected to cost about $25 million and will create 75 new apartments, an average cost of $330,000 per unit.
The housing authority’s Brown Ranch is expected to eventually have single-family homes, and Peasley said they would be priced so that local wage earners will be able to afford them.
“Success is going to be measured by how many local households we can move in there at an affordable rate,” he said.
Corrigan, who also sits on the board of the housing authority, said unless something is done to control the number of short-term rentals, he worries the work to build affordable units at Brown Ranch could be quickly undone.
“We’re all excited about Brown Ranch, and that six, seven, eight years from now, we will potentially have brought 2,000 new units to market,” Corrigan said. “It’s going to be pretty frustrating to wake up at that time and find out during that time, 3,000 other units went into that short-term rental market.”
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