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Gov. Polis predicts $400M affordable housing investment will create hundreds of thousands of units

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Scott Franz/Capitol Coverage
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A 90-unit affordable housing development is currently being built on the west side of Steamboat Springs.

Steamboat Springs is a ski town on the Yampa River where ranchers, ski bums and millionaires will often mingle at the same bar. Locals say they cherish this diversity. But even before the pandemic hit, housing was getting more expensive, and Yampa Valley Housing Authority director Jason Peasley says things were changing.

“We had people living in tents up on Buff Pass, multiple families living in units, really a lot of overcrowding situations,” Peasley said.

The Housing Authority is preparing to open a new 90-unit complex this year that Peasley says will house firefighters, teachers and other middle income workers.

“There’s going to be a lot of interest. It’s been a very intense lease out process with lots of people interested in living here, given how short we are in housing supply,” Peasley said.

But it’s taken more than four years to get here. And Peasley says this new apartment complex is not going to solve the town’s housing crisis. A 2016 study estimated Steamboat needed at least 1,000 more units. And this was all before many condos became short-term rentals.

“The increase in demand and the reduction in supply because of units turning over to other uses (like short-term rentals) has, I think, put us even further behind,” he said. “And so, you know, we’re out there trying to figure out how we can build the next 90-unit project.”

State lawmakers say this month that they are ready to help. They are advancing several measures to spend about $400 million of federal coronavirus relief money on affordable housing initiatives. One measure invests in companies making modular and tiny homes. Another gives cities tens of millions to build more developments like the one in Steamboat.

“Despite everything we are doing right now, we need to do more,” Summit County Commissioner Tamara Pogue said this month at a news conference about the new legislation.

Pogue says many Coloradans are running out of time.

“Just the other day the mom of one of my daughter’s best friends called — she’s a teacher, her husband is a property manager — and she said, ‘We’re done, we can’t do this anymore. We’re moving to Fort Collins.’ And for me it was the proverbial straw that broke the camel’s back.”

Behind these tough stories are some tough facts. Home prices have nearly doubled in the state over the last decade. Rental rates in mountain towns jumped 20% to 40% last year. And the state says it needs to build 250,000 more units to meet the current demand. Gov. Jared Polis says the bills lawmakers are passing will help cities get there.

“It will help create a zoning landscape, prefab technology that will help lead to hundreds of thousands of additional units,” he predicted this month.

Many cities are not waiting for state lawmakers to deliver. Voters in mountain towns from Frisco to Leadville passed new taxes in November on short-term rentals to generate money for long-term housing. Cities also successfully lobbied the legislature to let them spend the lodging tax money they collect from tourists on housing and child care.

Back in Steamboat, the Housing Authority is eyeing an even bigger project on ranchland on the west side of town. And lawmakers say the new money about to pour in later this year could help the city install water pipes and other basic infrastructure more quickly. Each project is important, Peasley says, no matter how long they take.

“I have, you know, children that are born here and they're young and I want them to have an opportunity to live here if they choose to,” he said. “Who knows if they will. But if I want that to be an option for them in the future, and I don't want this community to become a homogeneity of people who just happen to have so much money that they can live wherever they want.”

Five affordable housing bills are still on track to reach the governor’s desk as soon as this month But the money won’t start flowing until later this year, and it could take years before projects take shape.