Steamboat council passes STR tax, question now in voters hands

After getting Steamboat Springs City Council approval on Tuesday, July 19, the question of whether add a tax of up to 9% on short-term rental stays is in the hands of voters.
John F. Russell/Steamboat Pilot & Today

The question of whether to tax short-term rentals an additional 9% and use the proceeds to support the build out of the Brown Ranch is now in the hands of Steamboat Springs’ voters.

On Tuesday, July 19, Steamboat Springs City Council voted 6-1 to approve a second reading of the ordinance that would place the question on the Nov. 8 General Election ballot.

“It’s time for the voters of this community to decide and we will move forward based on whatever decision they make,” said Council President Robin Crossan, prior to voting on the ordinance. “Additionally, we have the opportunity to make corrections and changes along the way.”

If approved by voters, the total taxes assessed on short-term rental properties near the base area of Steamboat Ski Resort would be 20.4%. The tax would not apply to legacy lodging outlets like hotels, and would sunset after 20 years.

The tax question could earn more than $14 million in the first year and that revenue would be used to fund infrastructure at the Yampa Valley Housing Authority’s Brown Ranch development, which plans to add 2,300 units west of Steamboat over the next two decades. Brown Ranch infrastructure costs have been pegged at $400 million.

The tax has received sharp criticism from Steamboat’s lodging community that says the tax is too much of a burden to place on an industry so central to the local economy. They also warn a recession is looming and this new tax would make things worse.

“There is no easier way for a family to save money in a recession than to not take a ski vacation,” said Robin Craigen, cofounder and CEO of Moving Mountains, a luxury vacation property management company.

Tracy Olds, a Texas resident who said she has owned multiple properties in Steamboat, said she has “invested heavily” in the community and opposed the tax.

“Council is targeting the STRs (and) we are taxed without representation,” Olds said during public comment, speaking against the tax. “The tactic is the same the mafia used in the 1930s with shakedowns. This looks like a mean girls school right now.”

The lodging community has pitched an alternative tax measure, but a majority of council has said they don’t think it would be approved by voters.

Crossan said attending a meeting with the lodging community on Monday, July 18, was “very difficult to do,” but insisted that she and other council members have been listening to the various concerns raised about the tax.

The tax question includes a clause that, if passed, allows council to lower the tax levied on short-term rentals without voter approval. Crossan said if sales tax revenues were down and they believed the new tax was a cause, they could quickly make changes.

“We have the ability to adjust and that makes me feel more confident that the community needs to make this decision,” Crossan said. “If we don’t give it to the community to make, then we will never know.”

The question voters will see in November asks:

“Shall the city of Steamboat Springs taxes be increased by $14,309,858 annually in the first full calendar year, and by whatever additional amounts are raised annually thereafter, by imposing a tax on short-term rental accommodations at a rate of nine (9) percent, and shall the increased revenues be dedicated for use to increase the stock of affordable and attainable housing by providing incentives and contributions to facilitate the development of affordable and attainable housing at locations including, but not limited to, Brown Ranch and to provide funding for infrastructure associated with affordable and attainable housing, including, without limitation, energy, stormwater, water, wastewater and multi-modal transportation, and shall the tax expire on Dec. 31, 2042 unless the qualified and registered electors of the city authorize an extension and may the city adjust the rate of tax from time to time, so long as it does not exceed 9% and shall the city be authorized to receive and spend the proceeds of such tax as a voter approved revenue chance and and exception to the limits that would otherwise apply under Article X, Section 20 of the Colorado Constitution or any other law?”

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