Guest column: Proposition 2A will damage the fabric and the future of Steamboat Springs

Citizens for Responsible Housing Policies
For Steamboat Pilot & Today

Steamboat Springs has built a reputation as one of the most family-friendly vacation destinations in Colorado, an authentic mountain town with one of North America’s premier ski resorts.

Yet come November, instead of being known for horseback riding and champagne powder, the city could be known for being one of the most highly taxed tourism destinations in the U.S.

Proposition 2A is a reckless proposal by Steamboat Springs City Council to impose a tax on short-term rental accommodations for a period of 20 years at a rate of 9% with proceeds of the tax dedicated for the broad and undefined purpose of “subsidizing infrastructure” to increase the city’s affordable housing stock at locations including Brown Ranch.

While we support responsible, affordable and ready-to-go workforce housing developments that will help meet Steamboat Springs’ immediate housing shortage, Proposition 2A takes us backward, seriously damaging our local economy and creating a $280 million blank check to Brown Ranch, an unannexed, not-yet-approved development.

Aside from creating a massive developer’s subsidy, this proposed short-term rental tax will increase lodging tax in Steamboat Springs from 3% to 12%, which represents a 400% rise and the largest tax increase of any kind in the history of Steamboat Springs.

With Proposition 2A, taxes on nonhotel lodging will increase from 11.4% to 20.4% — a 78.9% increase in total taxes. If approved, the new tax rate in Steamboat Springs will make it one of the most highly taxed tourism destinations in the country, more than double Vail’s tax on lodging of 9.8% and well above the city’s other nearest competitors, Aspen (11.3%) and Breckenridge (12.3%).

Not only would this nearly 80% tax hike further depress our slowing tourist-supported economy where visitors have fallen 30% percent from pre-pandemic highs, but also this tax sets us on a path to uncontrolled growth, doubling the size of Steamboat Springs.

Are we ready for a potential of 10,000 new residents, 5,000 more cars, 2,300 new homes and 20 years of construction and congestion funded from an unsteady source of revenue? Government-run development projects have a long history of running over-budget, including the Routt County Health and Human Services building, and the proposed downtown fire station and city hall. If we go in this direction and the bill grows from half a billion to over a billion dollars, who will fund this?

Every year, visitors spend $250 million in Steamboat Springs. An 80% tax increase added to every short-term rental will cause at minimum a 10% decline in occupancy. This will cost our local businesses at least $25 million in visitor spending a year, for a tax that aims to garner $12 million to $14 million. It won’t just be our visitors that pay this tax. We will all pay — businesses will be hurt, and jobs lost.

Steamboat Springs City Council promotes the false narrative that short-term residences caused the housing supply shortage, and this “fix” will solve the shortage — a narrative it hasn’t researched nor used data to validate. Supporters of 2A tout that one in three homes in Steamboat are short-term rentals, when 95% of short-term rentals are traditional lodging built for tourism at the mountain.

Short-term rental regulations have been handled in a disorganized and haphazard fashion to get 2A on the ballot in a hurry. There is no plan, just hit-and-hope tactics that threaten the very fabric of our community.

The lodging industry is the largest sector of the Steamboat Springs economy and directly impacts more than 50% of the total economy, including restaurants and retail businesses. A punitive tax on short-term lodging is, therefore, a tax that affects a significant number of other jobs and businesses as well as the lodging industry itself.

Why did the City Council reject an alternative proposal brought forward by the Steamboat Springs Lodging Association and that received a broad coalition of support from the business community? A proposal to only fund shovel-ready and genuinely affordable, not just attainable, housing projects with a 2% lodging tax on all lodging, which would generate $2.8 million annually and a 0.75% increase in sales tax (excluding grocery and utilities)? If supported by the community, this would generate over $10 million annually and create meaningful change for our workforce with a solid growth plan.

Voting no on Proposition 2A is the smart choice for Steamboat Springs. It will send a message that Steamboat Springs wants a thoughtful, planned way forward to finding sustainable ways to achieve affordable housing without sacrificing the fabric and future of Steamboat Springs.

Citizens for Responsible Housing Policies opposes passage of Steamboat Springs ballot measure 2A.

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