Higher rents, lower expectations: Tenants at two Steamboat Springs apartment complexes furious with new landlords
Complaints are mounting for tenants at Main Street Apartments and Flour Mill Apartments who are irate with the Indiana-based company that purchased the two properties in February.
Both apartment complexes in Steamboat Springs were built as hotels and later repurposed into long-term housing. For years, the hotels-turned-apartments have been perceived as affordable housing options for Steamboat’s workforce. But among some of the holdover tenants from the previous ownership, tempers are especially high.
“It’s another one of those absentee landlord greedy situations to be honest,” said Ian Engle, who has lived at the Flour Mill Apartments for two years.
The history of the Flour Mill Apartments is somewhat complicated.
Back in November 2007, smack dab in the middle of election season, the city of Steamboat Springs purchased the Iron Horse Inn for about $4 million in a decision that was widely criticized across the city.
“It’s in direct competition with the private sector’s ability to provide rental housing,” said Scott Myler shortly after winning a City Council seat in 2007.
Not long after that however, the housing market crashed and the naysayers appeared to be right. The city was paying about $480,000 a year on debt service and struggled to identify the best use for the property.
The city used it as a hotel, but lost money. The city used it as workforce housing, but lost money. Then city officials shut it down and let the property sit vacant — still losing money. They thought about tearing it down and building a police station, but ultimately, city officials wanted it off the books entirely.
In 2015, the city sold the property for $2.5 million, and the Iron Horse Inn became the Flour Mill Apartments. According to a March 2016 article in the Steamboat Pilot & Today, when the new owners took over, they made renovations and adjusted rents from around $700 for a studio apartment to about $900 — and people were furious.
“They’re going to make a lot of money off this place,” a tenant told the Steamboat Pilot in 2016. “I don’t know why the city isn’t up in arms about this. This could have been an income-producing asset.”
It’s not clear how profitable the complex was, but the new owners made a lot of money on the sale when they sold the property in February for $14.6 million to a private equity investment firm out of Indiana — Birge and Held. The Main Street Apartments were part of the same deal and sold for $9.4 million.
Ever since the two properties changed hands, tenants at both complexes have been vocal about their displeasure of the new owners.
“My rent was going to go up to $1,800 at the Flour Mill,” said Chase Unruh, a former tenant who decided not to renew his lease. “This is before I knew about the $175 add-on flat fee for utilities, which to me is completely insane.”
Under his lease with the previous owners, Unruh paid $1,600 a month including utilities for a small studio apartment. According to Unruh and every other tenant interviewed, no renovations were made in conjunction with the rent hikes.
In fact, tenants at both complexes received notices on their doors from Birge and Held saying that they would have to pay flat utility fees. The new charges for utilities came in addition to the across-the-board rent increases.
“There’s no way for them to know how much each unit is using — water, electricity, all of that,” said Nicki Silverman, a former tenant at Main Street Apartments who moved out around the end of October. “That sent me off. I’m not paying you $200 extra a month for something that you can’t prove. I use less water than people where there are two or three people living in these tiny places.”
A spokesperson for Birge and Held responded to questions about Silverman’s claims in a written statement.
“The $140/month utility fee charged to all residents includes electric, gas, water, sewer, internet, pest control and trash services for our residents,” the company spokesperson wrote. “This offsets the greater expense to the property for these services.”
Documents provided by tenants at both Main Street and Flour Mill Apartments show utility fees ranging from $150 to $185, as the $140/month described by Birge and Held is the base rate.
“A hundred-and-seventy-five dollars for 300 square feet, right?” Unruh said of the utilities. “Seems insane.”
Unruh moved out of the Flour Mill Apartments in August after finding a 550-square-foot studio apartment near Steamboat Resort. He said he pays about $150 in utilities at the new place, and overall, he pays about the same amount he would have at the Flour Mill despite living in a larger unit. Unruh added that he packed up and left amid a cockroach infestation.
Allison Plean, a tenant at the Flour Mill Apartments, describes the complex as “Hotel Hellifornia” and said she’s seeing people so desperate to move out, they’re willing to break their leases.
“Mine comes up in March,” Engle said of his lease. “I’m looking hard for somewhere else to go, but you know, as a paraplegic with two service dogs.”
He said that even though he stays active in adaptive sports, there are still things he needs help with. He said his landlords should offer better accommodations considering his rent is going up, but feels the opposite is true.
“We’re paying more for less,” Engle said.
Engle relies on a manual wheelchair and said that since the new owners took over, he’s seen less maintenance and support, and communicating with Birge and Held is frustrating.
“I don’t even feel comfortable trying to ask for them to come in and in clear out the cabinet under my sink so I can roll underneath it and do my dishes,” Engle said.
Even as rents for studio units approach $2,000, the Flour Mill Apartments and the Main Street Apartments are both still marketed as affordable housing. They were among the least expensive housing options in town prior to being purchased by Birge and Held, and the same might be true even after the increases in rent.
“Costs for housing, labor and supplies have gone up more this year than in years past,” the Birge and Held spokesperson wrote to the Steamboat Pilot & Today. “Our average rental increase very much aligns with the Consumer Price Index (CPI) increase for 2022.”
In February, when Birge and Held invested at least $24 million in purchasing the two properties, almost half of the homes sold in Steamboat Springs were being purchased above their listed price, according to Redfin.com. The ensuing summer was a historically active time for property transactions in Steamboat until the housing market started coming back to earth in August.
With that, it seems like Birge and Held might have bought high, and for many of the holdover tenants, they feel like they’re paying for it.
“The Flour Mill is just this little microcosm of things that are happening right now,” Unruh said. “What’s happening with the Flour Mill is really important because it’s part of an overall trend that we’re seeing — not being able to sustain a workforce in this town.”
To reach Spencer Powell, call 970-871-4229 or email him at spowell@SteamboatPilot.com
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