Fearing a state “power grab” could derail the city’s best chance to fix its affordable housing crisis, a shorthanded Steamboat Springs City Council voted unanimously during an emergency meeting Thursday, March 30, to oppose Gov. Jared Polis’ sweeping land use reform bill.

That chance — the Yampa Valley Housing Authority’s Brown Ranch that promises to deliver affordable and attainable housing over a 20-year buildout — is going through the city’s annexation process right now.

City staff said annexation could be stalled indefinitely if the bill becomes law, as it would be unclear if the city has enough water to serve both the Brown Ranch and the infill potential that would result from the broad upzoning the bill could facilitate.

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“I’m scared,” said council member Heather Sloop. “This is where I say to the governor … do you want us to build Brown Ranch or not?”

“It could delay Brown Ranch,” said Kathi Meyer, who represents the housing authority on the committee crafting an annexation agreement. “We have a housing crisis right now.”

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In response to questions from the Steamboat Pilot & Today, Polis’ office said the legislation “would not impact the Brown Ranch.”

“We are working to clarify the language around rural resort communities to ensure the proposed legislation would not impact projects like the Brown Ranch development,” spokesperson Melissa Dworkin said in an email. “In addition, we are working with rural resort stakeholders on the policy to build on local approaches to encourage and support these critical affordable projects.”

Following initial publication of this story, Dworkin added, “The governor would oppose any policy that would delay Brown Ranch and will make sure that any new law makes this important housing project easier and lower cost.”

Steamboat council members and city staff called the bill “unprecedented,” “radical” and “short-sighted.” Routt County Commissioner Sonja Macys, a Democrat whose district is entirely within the city, said she believes the bill in its current form is bad for Steamboat.

Forgoing an option to send potential amendments, City Council voted 5-0 to oppose the legislation. Council members will also send a letter to the legislature and Polis highlighting their opposition and fears of how the legislation could negatively impact Brown Ranch.

State Sen. Dylan Roberts, a Democrat from Avon, said the bill needs some amendments.

“I think the bill is coming from a place of trying to do something big to put a big dent in our affordable housing crisis we have in Colorado,” Roberts said. “However, the details matter, especially in smaller communities and in rural resort communities.

“The concern in mountain communities is it would just create a ton of development incentives for more second homes and short-term rentals, and that’s obviously not something that would help us with our housing issues,” Roberts said. “The governor’s office and the bill sponsors seemed very open and receptive to putting affordability requirements into the bill in the resorts section, so that’s positive news.”

The legislature had 39 days left in the session as of Friday.

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Roberts is the chair of the Senate Local Government and Housing Committee, which will hear testimony about the bill on Thursday, April 6. Roberts said any amendments would come the week after that, with a vote on the bill that could move it to the Senate floor coming in three weeks.

The committee is made up of four Democrats and three Republicans. Roberts said he is often the swing vote on the committee and does not feel pressured to ensure the bill passes.

“I’m not feeling pressure to vote either way,” Roberts said. “I’ll do what I do on every bill, which is listen to my community first and make sure that my district’s needs are being addressed. That’s what will secure my yes vote, if leaders in my district say, ‘OK, this has been changed to a place where we think we can make this work and this will help our housing needs.’”

The land use bill

The bill, SB23-213, was introduced in the state Senate on March 22. In a press conference about the bill, Polis said Colorado is at a fork in the road and needs to take drastic steps to avoid housing struggles worsening.

“Do we want to go down a route, and we’ve seen this play out in other states like California where there’re cities with average home prices above $1 million?” Polis asked. “Or do we want to create a better way — a Colorado way — to plan for a future that’s livable, affordable and works for all of us?”

It was often highlighted during the press conference that it took more than 120 meetings to come up with the bill’s text and that it has support from housing advocates, environmental organizations and business leaders.

A news release from Polis’ office the day the bill was introduced included a quote from Steamboat Ski & Resort Corp. President and CEO Rob Perlman expressing support for the bill, saying it will create ways for the resort to address its workforce housing issues.

The plan largely focuses on a supply-side theory. The goal is to loosen local development standards and make way for more density, which allows for the construction of housing that the bill notes is “typically more affordable.”

The bill doesn’t contain clear language that requires any of the new housing it hopes to spur to meet affordability metrics, but the idea is that if there is more housing to meet increasing demand across the state, the result will be a more affordable housing landscape.

The key components of the bill include requiring housing needs assessments, allowing accessory dwelling units as a use by right, allowing “middle housing” ranging from two to six units as a use by right, incentivizing multi-family developments near transit-oriented areas and allowing multi-family developments in “key corridors.”

Each of the three bill sponsors represents the Denver Metro area. The bill creates several tiers for communities, with Steamboat Springs landing in the rural resort job centers tier.

“The solutions that we’re proposing focus on setting goals and eliminating restrictions so we can build more homes that people can afford quickly,” said Senate Majority Leader Dominick Moreno, a Democrat from Commerce City who is a prime sponsor of the bill.

How Steamboat fits

A staff analysis of how the bill would affect Steamboat suggests it could have significant ramifications.

“To me, this looks like a deregulation bill,” said Steamboat City Attorney Dan Foote. “It seems like something that, you know, home builders would support.”

In a report to council, city staff concluded the bill would have negative impacts on the city, such as significantly changing the community’s character in many neighborhoods and restricting the city’s ability to require developments to mitigate impacts to infrastructure and city services.

“This is a market-driven approach that assumes that an increase in supply will result in lower prices and more affordability,” staff wrote. “Based on the city’s past experience, staff is skeptical that this approach will have a meaningful impact on the city’s housing shortage.”

The requirement that middle housing, or structures with between two and six units, townhomes, and cottage clusters, be permitted in all residential zone districts would be a significant change.

The city would also be prohibited from requiring off-street parking for these developments, which City Manager Gary Suiter noted would be problematic as the city does not allow on-street parking in the winter.

“Not a good idea in resorts where you can get 400 inches of snow a year,” Suiter said. “There’s just things in there that make no sense.”

Another provision would allow multi-family development in all “key corridors” of the city, which staff found could potentially impact all zone districts in Steamboat. While the city may retain some control over multi-family housing in these key corridors through a regional housing needs plan, it is unclear how much control the city would have over that plan in general.

The bill also restricts the city’s ability to impose any standards that would create “unreasonable cost of delay” to development, which staff wrote is “exceedingly vague and an invitation to litigation.”

“It would, in many cases, make it difficult or impossible for the city to enforce development standards or even the fire and building codes,” staff wrote.

The staff report continues by saying the city’s conditional uses, planned unit development and variance processes would all be eliminated, as they are processes that include subjectivity. The bill requires that all development standards be based on objective criteria.

For accessory dwelling units, the bill doesn’t make significant changes because the city already has what Planning Director Rebecca Bessey considers a “liberal policy” that allows them. Still, the bill would conflict with certain requirements such as setbacks, parking requirements and other standards the city has in place.

Affordability

Polis’ office pointed to a seven-line section of the 105-page bill that it considered “affordability requirements.”

This section says the legislation would require communities to employ at least two strategies from “the menu of affordability strategies,” which would be created by the end of 2024 by the Department of Local Affairs.

“These strategies must both address housing needs and make progress toward meeting demonstrated housing needs across all household incomes and types identified in the local housing needs assessment,” the bill reads.

There is little detail on what these strategies may ultimately be, though the bill notes it could include strategies proposed by local governments, sustainable land use best practices and “policy or regulatory tools that local governments could adopt as incentives to promote affordable housing development.” 

“Also, this bill looks at ensuring the most affordable types of housing options can be built,” Dworkin said.

Roberts said he is working with the governor’s office and bill sponsors to add affordability requirements to the bill because, in his view, there are not any in its current state.

“I’ve been in very close touch with the sponsors and the governor’s office,” Roberts said. “They are working on many, many significant amendments. They also respect all the criticism and feedback they have been getting and they want to address as much of that as possible.”

Brown Ranch implications

One of the key concerns among city staff is how upzoning broad swaths of the city could affect infrastructure like roads, water, sewer and even the Yampa Valley Electric Association’s energy capacity.

“The bill just assumes we’re going to figure it out,” Foote said. “Maybe we will, but it’s impossible to say at this point.”

One of the key requirements for annexation of the Brown Ranch is that the city has capacity in its water system to serve the new development, in addition to potential development within the city limits.

In February, Public Works Director Jon Snyder said the city has the water capacity for the initial development of the Brown Ranch, though eventually there would need to be another water treatment plant along the Elk River.

Michelle Carr, the city’s water distribution and collection manager, said the a water supply master plan completed in 2019 showed this capacity, but the current bill could require that to be redone.

“When we redo the master plan with the increased density, it’s possible that instead of saying we can supply up to 800 (equivalent residential units) in the west area for Brown Ranch, it’s possible that that water, for those (800 equivalent residential units), would be used up,” Carr said.

If the bill passes, Carr said she believes the city will need to go through the water supply master planning process again, which would take a year and likely longer. That study may also need to wait for the true planning and zoning implications of the bill to be realized.

If that water study were to find that the city’s water supply was deficient, the solution would be to build the treatment plant on the Elk River — an upgrade the city hadn’t planned on starting until the end of the decade. The cost of the plant is estimated to be between $40 million and $58 million, and no funding source has been identified.

“I think the (Brown Ranch annexation) process would need to stall,” Carr said. “There would just be so many unknowns I don’t know what you would have to work with to move forward.”

In responses to the newspaper’s questions, the governor’s office said Polis “applauds Steamboat for their dedication to this affordable housing project.”

Roberts said he believes another amendment to the bill should give communities like Steamboat, Breckenridge, Winter Park, Avon and Fraser credit for what they have done to address affordable housing issues.

“There should be a way to give those communities credit,” Roberts said. “And ensure that we’re not doing anything that jeopardizes those plans, but also allows them to continue those efforts and a way that they’ve decided works best for their individual community.”