The Steamboat Springs City Council has approved a $3 million pilot program to purchase deed restrictions on existing homes, a move city leaders and staff hope will quickly add more workforce housing options in an area that continually sees cost-of-living challenges. 

The program is the first of its kind for Steamboat but is modeled closely on efforts that have gained traction in other high-country communities like Breckenridge, said Steamboat Springs Senior Planner Brad Calvert in a Wednesday interview with the newspaper. 

In both Breckenridge and Aspen, roughly two-thirds of occupied homes carry a deed restriction, while in Steamboat Springs, only about 8% of the housing stock is similarly protected.

Calvert said the idea flows directly from the city’s housing strategy adopted in August 2024, which instructed staff to look for “model programs” that had already proved effective elsewhere. 

“Because it has a track record in other communities in Colorado, it is pretty easy for us to go from idea to essentially designing the program and putting it in front of council with both the details as well as the ($3 million) appropriation,” Calvert explained. 

Council’s approval of both the program creation and the $3 million supplemental budget appropriation at its Feb. 17 meeting capped several months of discussion about how to deploy short-term rental tax revenue voters approved in 2022.

In a Dec. 9 work session, staff laid out a suite of potential solicitation and investment programs for the city’s Affordable Housing Fund, which is backed by the STR tax revenue. Council signaled support and asked staff to bring specific pieces back as they were ready, including the deed-restriction plan. 

By early January, Calvert’s team presented an outline for a deed-restriction program, and council directed staff to move ahead with a pilot focused on homeownership opportunities for the local workforce.

That focus is key. The pilot program targets households that earn too much to qualify for the limited number of income-restricted units already in Steamboat Springs but still cannot realistically compete in a market where even modest homes typically list well above what local wages support. 

Rather than building new units, the city will put money directly into transactions for homes that already exist. 

Participation is entirely voluntary. A buyer shopping for a market-rate home within the city’s urban growth boundary can apply to become a qualified buyer under the program. 

If they meet the criteria — primarily a requirement that they are part of the local workforce — they can bring the city’s contribution into their purchase, but by doing so they convert what would have been an unrestricted home into a deed-restricted one. 

The city has created two categories of restriction: a local employment deed restriction that requires the owner — or in some cases tenants — to be members of the local workforce for the long term; and a price-capped restriction that not only ties occupancy to local workers but also limits future resale prices through formulas laid out in the new Affordable Housing Guidelines council adopted alongside the program. 

For the local employment restriction, the city would provide a 15% buydown with a maximum subsidy of $150,000, while for the price‑capped restriction, the buydown is 20% with a maximum subsidy of $250,000.

For example, said Calvert, a million-dollar home encumbered with a local workforce restriction would appraise and resell closer to $850,000 rather than the full market-rate price.

There is technically no maximum purchase price for a home, but Calvert noted that the financial benefit diminishes as prices climb above roughly $1 million, because the city’s contribution is capped while the sales price continues to increase. 

“As soon as you get north of a million dollars, you are actually not taking full advantage of the city’s participation in the transaction,” he said.

With the $3 million budget appropriation — about 20% of the city’s 2025 STR tax revenue — the city estimates the program could buy somewhere between 20 and 40 deed restrictions during the pilot phase, with that number likely landing in the low 20s, according to Calvert.

Breckenridge saw a similar appropriation yield 21 restricted units, and Calvert said that experience gives Steamboat city staff confidence that its program is calibrated in the right ballpark. 

Because the program does not involve new construction, the turnover from appropriation to actual units is expected to be relatively quick. 

“There’s no real estate risk — the unit already exists,” Calvert said, contrasting the program with ground-up development that can stall for any number of reasons.

Council members spent time fine-tuning the framework before signing off. Early drafts would have allowed local employers to purchase up to four homes through the program; that cap was reduced to two units per employer. 

The employer path is designed to let a business buy and restrict a unit that it then rents to workers, though the restriction still requires that any tenant be a member of the local workforce. 

Council also decided to include — but delay — an option that would allow existing owners to voluntarily place a deed restriction on their home. That element, along with the employer track, will not go live until October, after the city has had a chance to see how the core model performs.

Council has already approved the policy-level Affordable Housing Guidelines and the legal instruments — the deed restrictions themselves — that will be recorded against properties. 

The remaining piece, to be nailed down over the next several weeks, said Calvert, is establishing administrative procedures that spell out how the program will actually run. 

The city plans to lean on the Yampa Valley Housing Authority as the primary administrator, he added, building on YVHA’s existing deed-restriction implementation plan and portfolio of restricted units.

Calvert said the goal is to have all of that in place in time for the traditional summer home-buying season, with applications opening as early as late-April or mid-May. The program is structured as first-come, first-served.

“I suspect we will always do something like an annual appropriation,” said Calvert. “One of the lessons that we’ve learned from other communities is that there tends to be a fair amount of pent-up demand in the system for … homeownership, when really, the prices actually don’t allow a member of the local workforce to do that.”

For now, city officials are calling it a pilot program, both to signal that it is new and to give themselves room to adjust. 

“There’s a lot of acquisitions that happen in the first three, four, five years of the program, and then you may see demand come down a little bit,” Calvert said. “So you could essentially sunset the program altogether, or you could right-size the appropriation for the volume of transactions that you’re expecting.”