First Tracks seeks help
Affordable housing requirements, market realities collide with developer
November 13, 2008
Steamboat Springs — The developers of the First Tracks affordable housing project were hoping to win Planning Commission approval tonight for a plan to waive some of the deed restrictions the city has placed on the condominiums.
Based on a city memo, it’s not going to happen. In fact, city officials say it can’t happen because the Community Development Code forbids it.
A spokeswoman for Resort Ventures West, the developer of First Tracks, said they’ll go forward with their presentation tonight anyway, if for no other reason than that doing so will enable them to take their issues directly to the City Council.
The 47 deed-restricted affordable units at First Tracks were required by the city – under its inclusionary zoning ordinance as a condition of approval for the nearby Trailhead Lodge resort condominium project. Various market factors have contributed to difficulties in finding buyers for the affordable condos, which aren’t scheduled for completion until next summer.
But a growing stock of entry-level condos, combined with financing challenges for first-time buyers, are making it a tough sell. After marketing the project throughout the summer and fall, only 14 have gone under contract.
“The major concern we’re hearing is the ability for resale in general,” Resort Ventures West Development Manager Mariana Ishida said Wednesday.
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The proposal by Resort Ventures West on tonight’s Planning Commission agenda would remove the deed restrictions that stipulate income guidelines for buyers and limit the units’ annual appreciation to 3 percent. The measures are intended to keep the units in the city’s stock of affordable housing in perpetuity.
Instead of those restrictions, Resort Ventures West proposes being limited to selling the condos only to people who work in Routt County.
The proposal won’t make it far, because the Community Development Code already contains an exit strategy for projects such as First Tracks. The exit strategy requires developers to continue seeking buyers for the units for at least 12 months beyond the date they obtain a certificate of occupancy for the project. At that time, unsold units must be offered to the city and the Yampa Valley Housing Authority for purchase. If neither entity acts, the units would be eligible for sale without deed restrictions. At the time of closing, a payment in lieu of providing affordable housing units would be required.
“The impression I got from Planning Director Tom Leeson at our Monday work session was that the matter is moot,” Planning Commission Chairwoman Kathi Meyer said Wednesday. “Staff has written a report, and we’ll take it up, but there’s no way we can make a ruling because of what the code says.”
Ishida said her company is eager to have a conversation with the Planning Commission and the City Council to exchange ideas.
“We need something more in tune with today’s market,” Ishida said. “And the market is going to change every year.”
She added that Resort Ventures West put one additional First Tracks condominium in reservation during an open house held during the weekend, and it will not cease its efforts to sell the condos.
The staff report in tonight’s Planning Commission agenda packet, written by Community Housing Coordinator Nancy Engelken, contains four alternative forms of deed restrictions. They could be investigated in the future if City Council wants to revise the code to increase demand for affordable housing markets.
Had Planning Commission been able to vote on the proposal tonight, staff members were prepared to make a recommendation of denial because they fears the changes would undo the present regulations, which are meant to assure a perpetual supply of affordable housing in the city.
“The reality is that Resort Ventures West has made a stellar effort to sell those units,” Engelken said. “What they are up against are major changes in the financial and real estate markets.”
Ishida said her company needs a new set of less restrictive terms that will allow it to reach buyers given the conditions of the real estate market.
“Regardless of the technicalities, we need something more in tune with today’s market,” Ishida said. “We need something new to bring to the market.”
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