Hard reality: High rent, lack of inventory isn’t only affecting low income or transient renters
STEAMBOAT SPRINGS — It will take 40 years to work through the current wait list at The Reserves of Steamboat Springs, an affordable housing development on the west side of town. Right now, there are 200 households waiting to occupy a two- or three-bedroom apartment in the complex that only has 48 units.
Some of those households are families with children. Others are single individuals who have pets. Most are just looking for a way to make ends meet.
When The Reserves officially opened to accept leasing applications in 2017, over 100 people began lining up at 3 a.m., according to Jason Peasley, executive director of the Yampa Valley Housing Authority. All the units were filled in under three hours.
“People are desperate,” Peasley explained.
It’s not just an issue for those with low income, either. Renters who make over the area median income are also affected.
For Celina Taylor, the rental issue means working several jobs. Not only is she a business owner, she is executive director of a local nonprofit and is a storytime assistant at Bud Werner Memorial Library. Still, she lives in a tight one-bedroom basement apartment in Steamboat. She used to share the single bedroom with her teenage daughter before she graduated and left home.
Like many local residents, Taylor is worried about having to leave the area because rent is too high and inventory is too low. If it weren’t for a last-minute effort by one of her theater students, she already would have been gone, she said.
That student’s family welcomed Taylor to rent out their finished basement apartment, which had never really been used.
Taylor, 40, can only laugh when she recalls her story of moving to Steamboat in 2014. Her husband had already moved out from their home in Chapel Hill, North Carolina, to a temporary living space in Steamboat as he began working. He had lined up a little three-bedroom house downtown for the family to rent.
Soon after, Taylor packed up a large moving trailer and began the drive to Colorado with her four children. She made it as far as West Virginia before she got a call from her husband who had gone to sign the rental lease that day. It wasn’t good news.
“I get a phone call while I’m on the road that the leasing company pulled the lease, saying we had too many children,” she recalled. “My husband was beside himself.”
“They can’t do that,” she thought. “That’s illegal, right?”
Her husband was at a loss.
When the property rental company filled out the lease, they had only included two children as tenants, but the family had four. That was too many, according to the company.
“(The house) was large enough for a family,” Taylor said.
They weren’t trying to cram several people into one or two rooms, she added, but the property owner didn’t want to rent to more than the allotted amount.
Taylor’s husband began scrambling to find another place — his family set to arrive in a day or so.
The pickings were slim, but they found a home for $2,200 a month on Steamboat’s west side. It was a modular home built on a foundation. The owners required first and last month’s rent along with a security deposit. It would cost $6,600 just to move in.
“When we moved here in 2014, we had about $20,000 in our savings account. That was gone quickly,” she said.
They were returned the down payment for the downtown house and ultimately shrugged off the situation. They just needed a home.
Because the west side home wasn’t quite ready to move into, the family stayed a few months in a temporary rental condo on the mountain, spending thousands just for that.
They finally moved to the west side and called that their home for a couple of years before moving downtown, upgrading to a $2,500-a-month townhome being subleased by a friend. But when that sublease expired, the landlord hiked the monthly rent to $3,000.
“It was basically take it or leave it. That is the going rate,” she said
They continued to rent the home until last year.
Taylor’s husband and their 14-year-old daughter had relocated to Denver so she could train in ballet. And when the other children moved away, the large space of a three-bedroom home wasn’t necessary. Taylor began looking for a place to house just her and her daughter, a high school senior.
Again, the prospects were minimal.
She found in the summer that some bedrooms were renting for $1,000 a month. Those owners required first and last month’s rent with a security deposit.
“There’s absolutely no way I’m paying $3,000 to live in their bedroom,” she said.
It was just a few months earlier that Taylor and her husband had searched for a small apartment in the Denver area. That search was exceedingly easier than looking in Steamboat. They had an apartment there within an hour. The deposit was only $250.
“Denver’s still not exactly cheap,” she said. But the value of the apartment’s added amenities made up its worth. They would spend $1,400 a month for a one-bedroom — but the apartment complex included a state-of-the-art workout facility, a rooftop deck with barbecues, a large gathering center with a shared workspace and a dog park inside the community.
“When you start adding up the amenities… there’s no comparison,” she said.
Nothing like that existed in Steamboat, and as summer started to drag on, Taylor became very nervous. It was then a theater student’s family stepped up to help, offering her their basement apartment.
“If they hadn’t offered it to me, I would not be here,” she said.
Taylor owns Steamboat Arts Academy, a performing arts school for children, and is director of the Steamboat Figure Skating Club.
As an employer, Taylor said she has a hard time finding employees because there’s nowhere affordable for them to live.
“I couldn’t pay a dance teacher the amount I would need to pay him or her to live here,” she admitted. “Everyone hustles.”
As she does, it’s common for her employees to also work several jobs. It’s a fact that some people either don’t know or fail to admit, she said.
“A lot of times you’ll hear people say, ‘Well, the parents in this town can afford it. If they live here, they can afford it,’” she said. She would hear that when she worked for several years as development director of the Boys & Girls Club of Steamboat Springs. “My reply was always, you have no idea. The families that live here work so hard and try so hard to make sure they can stay here.”
As Taylor admitted, she is one of them. “If it weren’t for the kids I teach, I would be gone,” she said.
If she did leave, the services she provides would no longer be available to the community. It’s people like Taylor who are nearly being forced out of Steamboat by the increasing costs and dwindling rental inventory. While she’s observed that it is a common problem, she said she doesn’t believe there’s enough acknowledgment by others.
“It’s very easy for people to get comfortable and say, ‘I’m glad that’s not me. Good luck.’ I feel like there are really good people struggling to make it here.”
Not everyone is as lucky as Taylor, though.
There’s simply not enough inventory
Aside from the cost of monthly rent, the largest problem facing renters in Steamboat is the lack of inventory.
Ken Schomaker, associate broker at M R Realty in Steamboat, is very familiar with the issue.
While property owners are taking advantage of low inventory, “if you’re a renter in this town, it’s difficult,” he said.
As the inventory has dried up, people have a much harder time finding housing.
Seasonal leases were common in previous years, according to Schomaker’s experience at M R Realty, one of Steamboat’s larger long-term rental companies. “Nowadays, it’s really rare that we do anything less than a year.”
It’s mostly the longer-term local population who wants something for longer than a year, he said. While they’re feeling the pinch of the rental market so are seasonal renters.
“Some of the people who are really getting squeezed out are the people looking to rent just for a season — just for a winter,” he said. “Those are really hard to find.”
Even people who are a bit older, perhaps retired, with a healthy bank account are shuttered by the lack of inventory.
Schomaker said finding adequate housing depends on the time of year somebody is searching. The best time, he said, is in the spring and summer. The ski area shuts down in mid-April, and properties become available. Summer is especially good for those looking for single-family homes as more families opt to move while children are out of school, he said.
“Here in February, I don’t have anything,” he said.
If he does, the properties don’t last long on the market.
His advice is not to sign a yearlong lease in the fall for something that’s not really liked, “because you’re going to be going through this same problem next November.” Renters should get on the cycle that presents the most options, which would be in the spring or summer, he advised.
There also exists many empty properties, which Schomaker said could fulfill a need for locals needing a place to live and generate some income for the homeowners.
There were a total of 9,837 housing units within the Steamboat city limits in 2018, according to U.S. Census data. A total of 4,815 of those were occupied. Of those occupied, 1,653 were rental units meaning about 17% of Steamboat’s housing stock was renter occupied.
In 2010, 28.7% of the city’s population lived in rental housing. That figure increased to 40.8% in 2018, according to the U.S. Census.
When considering lack of inventory, Schomaker said he’s lost properties to short-term rentals.
“It really is frustrating,” he said. “In many instances, I think those property owners can make more money doing long-term rentals and provide housing to the local population that really needs it.”
Data doesn’t quite show that, though, at least for Steamboat.
“There is no hard data to prove it. It is inconclusive,” said Scott Ford, a local economist and former member of the Steamboat Springs City Council.
Ford said properties aren’t all necessarily guaranteed to become long-term rentals if brought onto the market, meaning there’s no way to quantify what properties would potentially provide housing other than short-term.
“What evidence exists is anecdotal,” Ford said.
Schomaker has been a local resident for the last 29 years and has seen a consistently pricey rental market with a high cost of living.
“I hear it often how Steamboat is so difficult, so hard and expensive,” he said. “But it’s always been this way. It’s just the nature of these resort towns.”
Schomaker’s first residence was at Stagecoach, when he failed to find anything affordable closer to Steamboat. He believes the few new developments now in the works will open up options for at least some.
Monthly cost becomes overwhelming for some
One of the private developers working in the rental market is Jon Sanders, the owner of the Flour Mill housing development in Steamboat.
His latest project is Main Street Apartments, a renovation of the old Alpiner Lodge downtown. Sanders describes the property as workforce housing but it’s also deed restricted for people who live and work in Routt County.
The property has 33 studio units and two retail spaces with two one-bedroom units that have an additional loft and outside deck.
Ski Town Commercial LLC, which Sanders owns, has a total of 112 residential units in its portfolio, ranging from studio units to three-bedroom single-family homes. Over 50% of Sanders’ portfolio includes seasonal workforce housing, which was the original intent of the Flour Mill.
The Flour Mill began as short-term housing and eventually had blocks of units rented by local companies for their employees. There are also traditional long-term, one-year lease units available.
But the rates for some of the units are some of the highest in Steamboat when considering cost per square foot.
Rates at the Flour Mill range from $1,000 to more than $1,800 a month. The cost depends on if it’s furnished, the term of the lease and condition of the unit.
Still, Sanders said he’s very aware of the issues facing renters in Steamboat. By creating more quality and sustainable units, he said he’s helping the issues. His ability to be flexible on lease terms also helps renters, he added.
On average, renters can expect to pay $1,500 or more for a one-bedroom property in Steamboat.
“That’s if you’re lucky,” said Dunte Valrey, associate broker and leasing agent at Steamboat Sotheby’s International Realty.
For those seeking multiple bedrooms, it’s pretty much $1,000 per bedroom, he said.
Valrey has worked in the rental division at Sotheby’s since 2016. He deals with about 30 rental properties in an average year.
“It’s definitely gotten more expensive,” he indicated.
When Valrey first moved to Steamboat in 2007, he was paying $950 a month for a one-bedroom apartment just south of downtown. Today, that same apartment rents for $1,500 and higher.
What is considered affordable?
According to federal guidelines, the standard for affordabilty is spending no more than 30% of a person’s annual income on housing.
The Yampa Valley Housing Authority works with households that make up to 120% of the area median income, which is $103,320 for a family of four and $72,000 for a single person.
Affordability is about not stressing a person’s finances to the point where they’re having to make really tough decisions, Peasley said.
The housing authority’s largest property, Alpenglow Village, features 72 units and is nearly complete. Another of its properties, The Reserves, has 48 units. It has been 100% occupied since opening.
“It’s a symptom of the sheer lack of supply,” Peasley said. “There’s desperation to get into a safe, affordable unit.”
Figuring an annual 10% turnover rate, meaning five units a year were rented to new tenants, it would take four decades to lease to the entire wait list at The Reserves.
“That wait list is so large that we will be bringing on new supply quicker than you could work your way through it,” he said.
Those people on the wait list are likely to find housing elsewhere, either through other developments or ones being built by the housing authority.
The housing authority currently has five properties, which are all fully occupied, according to Peasley. Alpenglow will hold a leasing event in the spring, and there’s also Sunlight Crossings, a 90-unit moderate income apartment project north of downtown that will break ground this year.
Other future developments are in the works, but Peasley can’t disclose information on those just yet.
As the only solution is to bring on more housing supply, according to Peasley, the housing authority’s goal is to create a new development each year.
The intention is to build 600 units by 2030, with Alpenglow being the first of those units to come online. When that goal was created over 2 1/2 years ago, the housing authority anticipated that it would cover about 40% of the demand.
“We get to the end of that and we still haven’t really even captured half of the demand that we anticipated was out there,” Peasley said. And it’s only continuing to grow.
The lack of inventory is leading to the lack of affordability, which is simple economics.
“If demand outpaces supply, prices go up. Prices go up faster than incomes, you now have an affordablity problem,” he said.
Peasley has lived in Steamboat for the last 12 years, but he’s aware that the housing situation has been present for at least the last 40 years.
City master plans and community visioning documents dating back to the 1970s and 1980s talked about housing issues. But there has not been a significant supply of local housing built in the last 25 years.
“We’ve done different projects here and there,” he said. “A project every decade isn’t going to do it. A project every year might do it.”
People frequently call the housing authority asking for help, unable to afford their current housing or find somewhere to live, Peasley said. But there are realistically no options.
“I would say that most people are essentially stuck in their current housing situation, for better or for worse,” he said. “Until we start bringing on more supply that sort of breaks everything loose — it’s the only thing we can do.”
To reach Bryce Martin, call 970-871-4206 or email bmartin@SteamboatPilot.com.
To reach Bryce Martin, call 970-871-4206 or email bmartin@SteamboatPilot.com.