The Steamboat Springs City Council unanimously approved a resolution on Tuesday night to reallocate $5 million in short-term rental tax funds to boost affordability for the first phase of The Cottonwoods at Mid-Valley.

The request by the Yampa Valley Housing Authority — tentatively approved by council in June — shifts $5 million previously allocated for the second phase (Building 3) of The Cottonwoods to support the 86 for-sale, deed-restricted condo units currently under construction in Phase 1 (buildings 1 and 2) of the project.

By spreading the $5 million across 86 units, the per-unit subsidy would be about $58,000, remarkably lower than the nearly $80,000 per unit if the same funds were applied to the 63 units in Building 3.

The move would allow for prices ranging from about $300,000 to $600,000 — compared to $400,000 to $700,000 — with monthly payments as low as $2,553 for a one-bedroom unit, assuming the interest rate holds.

“I hope that we as council get away from us being involved in making loans of large amounts or giving money of large amounts for development projects,” said Councilor Bryan Swintek. “We aren’t developers, we don’t know enough to be able to ask questions or to really understand these details.”

“There are companies out there who do this. We are not the first municipality … who allocates taxpayer funds for affordable housing,” said Swintek. “This pro-forma model, these questions — I don’t know what half of any of that crap means, and I don’t think anybody else does.” 

“We’re bad at doing it, and we need to not do it,” he added. 

Council President Gail Garey asked City Attorney Dan Foote, per Swintek’s comments, whether any entity other than council could be given the authority to allocate STR taxes.

Foote explained that while the resolution could have been negotiated at the staff level and “not brought to council at all,” council remains responsible for appropriating such funds. 

“This is monumental for our community to be able to move forward in terms of bringing the first for-sale units to market in 20 years,” said Garey, who emphasized that the resolution approval should be “celebrated.” 

“I think this is really going to make a difference in the lives of a number of members of our community and allow them to actually put down their roots and continue to thrive in this community,” she added. 

“To me, this becomes the partnership with the housing authority that we really need to foster and grow into the future,” said Councilor Michael Buccino. “Yes, we are blessed with a short-term rental tax fund that most every city in Colorado is jealous about, but we can now give it back to our community.”

Councilor Dakotah McGinlay noted her own past struggles with local housing and noted the “big difference” council’s decision will make. 

“I want anybody and everybody in this community to thank those short-term rental licensers that have paid money, because we’ve made a boatload of money we can use to buy down this product,” said Buccino. “That’s also who we need to thank, our visitors that come here and rent those properties.” 

The resolution passed 7-0, with no public comment made.