Steamboat rejected a massive affordable housing development. Now what?

STEAMBOAT SPRINGS — His flip-flops obscured by shin-high hay, Jason Peasley stood in an empty field just west of town and gestured at a phantom community.

“That’s where the fire station would’ve been,” he said, pointing to the base of a small hill. He turned around and nodded toward some barns, near the road that leads into town. That’s where the grocery store would’ve gone. In between them, hundreds of condos, apartments and other homes would have been built in a neighborhood constituting the first phase of a massive affordable housing development that was set to unfold over the next 20 years.

All of the nearly 2,300 new homes would have come with income-based rent limits. And all would have been preserved for a local workforce that supports Steamboat Springs’ mountain tourism economy but increasingly finds itself priced out of a housing market that’s been upended by post-pandemic dynamics.

At least, that was the plan when the Yampa Valley Housing Authority bought the 534-acre Brown Ranch property in 2021 — thanks to a $24 million anonymous donation. The gift made Peasley, the authority’s executive director, the envy of affordable housing developers across the state.

But nearly three years later, Brown Ranch’s overgrown fields are no closer to sprouting foundations or sewer lines. Local opposition raised a litany of concerns ranging from costs to traffic. They forced a public vote that resulted in the city’s overwhelming rejection of the property’s annexation earlier this year, halting the project in its tracks.

The debate has exposed lingering existential and economic tensions within a small city reshaped by pandemic-era migration patterns, which brought in more wealthy remote workers who are geographically untethered from their jobs. It’s laid bare simmering divisions between established homeowners and the priced-out workers who are forced to commute, couch-surf or cram into town alongside roommates.

Steamboat’s housing struggles aren’t unique among Colorado’s mountain communities, where space limitations and economic divides present starker challenges than on the Front Range. As Gov. Jared Polis and his legislative allies have pursued land-use reforms targeted almost exclusively to Front Range communities, policymakers across the high country have sought solutions to bolster housing without affecting the outdoor space or the tourism that is their lifeblood.

None of those other communities, though, has had an opportunity like Brown Ranch, which was the last large developable piece of land near Steamboat Springs. Now, while the town’s local leaders search for a new plan that can unite a divided town, the plot sits idle.

“The Brown Ranch was an overreach,” said Jim Engelken, a former Steamboat Springs city councilman who helped lead the opposition. “Development at the Brown Ranch is not a bad idea. It needs to be part of a bigger overall strategy for affordable housing. It needs to be a piece of it — not the be-all, end-all. And nobody needs to be conned into believing that it’s going to solve our problem.”

Often, debate over the project turned on how much a remote community that’s prized for its small-town feel should change to house the people who teach its children, clean its hotels or work at the Steamboat Ski Resort but can’t afford $3,500 rents or a $1.2 million home.

Divisions also fell upon class lines: Those who could afford to live within city limits were able to vote. Those who were priced out — and stood to benefit most from Brown Ranch’s development — couldn’t.

At one point, Peasley brought in an industrial mower to blaze dummy roads through the hay, so that supporters could almost see how the project would transform this hilly ranchland.

Twice this century, developers had tried to build housing on the Brown Ranch property, named for a banker who moved here 100 years ago. Twice, those attempts failed.

“We were like, ‘Third time’s the charm, we got this,’ ” Peasley said in an interview a few weeks before touring the site with The Denver Post.

He cleared his throat. “Turns out, we didn’t.”

City leaders and the housing authority are now sifting through the pieces for a new plan. They insist Brown Ranch is still the future of development in Steamboat Springs.

But it will be at least three years before anything emerges from the hay.

“We still own the property, we still have a mission to accomplish, we still have a housing crisis,” Peasley said. “So the sadness that we felt was primarily for the people who were holding on to hope that this was going to be their opportunity. And that we had let them down.”

“There’s times I want to cry”

Janette Najera is among those who yearn for the stability of having a place of their own.

“So, we’re currently kind of homeless,” laughed the 31-year-old Steamboat Springs native, who works for a nonprofit that serves immigrants in the area.

She clarified, in a way that’s very Steamboat, that she and her partner aren’t exactly homeless — they just don’t have their own housing. When they returned to the city last year after pursuing a job opportunity elsewhere, they couldn’t find anything affordable to them.

So now they split time between family here and in Craig, a 40-mile drive away. They don’t make enough money to afford rent in town, but they make too much to qualify for available subsidized housing.

“It’s stressful, don’t get me wrong. There’s times I want to cry,” Najera said. “But I mean, I’m really grateful that we actually have a support group.”

The commute is common, exhausting and stressful. Other workers priced out of the city, which has a full-time population of about 13,000, come from Oak Creek or Hayden. Residents rattle off recent fatalities on U.S. 40, the main road in and out of Steamboat Springs. Some manage to live in town by serving as caretakers for non-residents’ vacation homes, while others stay with friends and family or — like the families with whom Najera works — crowd together into mobile homes, sometimes 15 to a unit.

Najera is among many who say they feel lucky to have any housing at all. Despite the challenges, residents are effusive about Steamboat Springs’ beauty and its welcoming community.

The housing crunch had been building before COVID-19. But the pandemic radically accelerated the crisis, officials said, as remote work became common and wealthy transplants sought refuge from COVID-stricken cities. Now, in a city with 10,000-odd houses, condos and apartments, nearly half are vacant for most of the year.

Tenants need to make $140,000 a year in household income to comfortably afford available rents, according to the city’s June housing plan. The median home sales price as of May was $1.2 million, according to Zillow, which says its home value index for Steamboat Springs has risen by 90% in the last five years. Prices in Craig, Oak Creek and Hayden have increased, too.

Many residents — particularly middle-aged workers — are leaving town entirely, according to the local chamber of commerce and the housing authority.

The evidence is everywhere, as a housing crunch that once primarily affected seasonal ski workers now hits nurses and teachers. Educators described a continuing struggle to ensure the school district had enough staff to serve its most at-risk students.

A recent edition of the Steamboat Pilot & Today newspaper included a story about rental scams, just a few pages before a broadsheet displaying seven-figure home listings. The hospital spent tens of millions of dollars to buy property for housing, awarding units on a lottery system. The HR manager said it was the happiest day of her career.

Since the late 1990s, leadership of the town had circled its west end — near Brown Ranch — as a future development area. According to a 2022 study conducted by the housing authority, Steamboat Springs and Routt County were in immediate need of 1,400 housing units for the local workforce. By 2040, that need was projected to reach 2,264 units.

Pursuing “the only option left”

The latest attempt to develop the Brown Ranch property promised to address it all.

“I felt that this was kind of the last and only chance for Steamboat to continue to be a place for people that work for businesses in Steamboat and still live in Steamboat,” said Andrew Beckler, who owns the ski pole company Grass Sticks. “And I still feel that way about the Brown Ranch property. It’s the only option left.”

Beckler, who moved to Steamboat in 2010, knows the cost pressures. He and his fiancée live in a caretaker apartment in the second home of his former ski student. Without it, they said, they likely wouldn’t be able to afford living here.

The Brown Ranch plan called for a mix of for-sale and rental workforce properties, all coming with income restrictions that would serve a variety of very low-income earners up to families making roughly $190,000 a year. Just over 1,300 units would be rentals, while the remaining 962 would be put up for sale to income-qualified buyers.

Federal tax credits, a new local tax on short-term rentals, state grants, and the proceeds from home sales and rents would fund the project, which was expected to cost $1 billion to $2 billion to build. A school, small grocery store and some limited commercial space was part of the plan, too. A New Jersey developer was tapped to lead the work.

But the city needed to annex the property to bring it under Steamboat’s infrastructure umbrella — a required hurdle that ended up dooming the plan.

(View on YouTube.)

Negotiations began in early 2023, and they quickly turned from collaborative to combative, those involved said, as local opposition began to gain steam. City Council and administrative staff pointed out that the development needed millions of dollars in community park land. One council member sharply questioned why the housing authority was trying to build so much.

The project would unfold over three phases, with the bulk coming in the first 12-year wave. Planning to develop as much as possible, Peasley said, would help cut costs.

After the first phase, the housing authority would pay the lion’s share of the cost for a new water treatment facility. Some of the new short-term rental tax would be directed to fund roadwork on U.S. 40, and the authority also agreed to pay the city a roughly $1,200 annual fee for every housing unit in the development.

That was a nod to a quirk of Steamboat Springs: Residents pay little in property taxes, and they have a net negative impact on city coffers, to the tune of $541 per household every year, according to a recent study. Two-thirds of the city’s budget comes from sales taxes, and the deficit is made up by tourists and workers who live out of town.

Since most of Brown Ranch’s expected residents would be either commuters moving in or doubled-up residents spreading out to their own places, officials didn’t expect the development to bring a flush of new money to fund city services.

Peasley still feels a little squeamish about agreeing to those per-unit payments, but the arrangement secured the deal with the town, he said.

Last fall, the council debated kicking the annexation question to a public vote, but a call from Polis — affirming the state’s support for the project — sealed the decision. A divided council voted to annex the property in October.

Opponents — later formally registered as “Steamboat Citizens for a Better Plan” — soon began gathering signatures to put the annexation to a public vote.

Preserving Steamboat in face of growth

Enter Jim Engelken, the former councilman. He’d moved to Steamboat Springs in 1979 after falling in love with it on a ski trip. He worked then at the new Safeway grocery store and bought a condo, in part using the proceeds from selling his Denver home.

He was first elected to Steamboat’s council in the 1990s, just before city leaders looked at the area around Brown Ranch for future development. He ran again in 2009, when voters rejected the first attempt to annex the land into the town.

The city has changed since he moved in. It had 4,500 people in the late 1970s, with just a few stoplights. Now it’s “very, very, crowded,” he said, and traffic on U.S. 40 is a constant concern.

Even through the growth, Engelken said, Steamboat’s residents have sought to preserve the place they found or were born in.

“We’ve been fairly successful at maintaining our community character in the face of these large proposals,” he said.

At Brown Ranch planning meetings last year, Engelken listened and grew concerned: about traffic, about costs, about the scale of the project, about the town swelling in size, about park land in the development — and about the $50 million needed to provide it. He wanted the project to be smaller, with a “free-market” component — meaning housing available with no income caps, at higher market prices or rents.

And he wasn’t alone. Other residents questioned if taxes would increase to pay for the development and suggested thousands of new people would quickly flood into their town, despite the project’s 20-year timeline and its workforce requirements.

Fundamentally, many opponents did not trust the housing authority or the developer it selected. (A few months after the vote, in June, the housing authority cut ties with the developer after its CEO was indicted in New Jersey on unrelated racketeering charges, the Steamboat Pilot and Today reported.)

The opposition to the project varied, and some critics disagreed about the city’s problems and the possible solutions. Some supported more subsidized housing in some form, while others wondered: Hadn’t the town, where plenty of people had found a way to live and the housing authority had built hundreds of subsidized units, done enough already?

Eric Rentschler, an engineer who moved from Fort Collins starting in the late 1990s, wondered why the school district and the restaurants and the hotels weren’t paying their employees more. Transportation should also be improved, he said, so people commuting in because they can’t afford to live in town have an easier time getting to work.

“I had three jobs. My wife had three jobs,” said Dave Barnes, a part-time real estate agent who moved to Steamboat Springs from the East Coast in 2002 after spending a few winters in town. “It was just kind of the ski town atmosphere: You work really hard, you play hard, that’s what you did. The notion (that) somebody can earn $30,000 a year and have one job and live in a paradise — in one of the best places in the world — quite frankly, in my mind, is wrong.”

Rentschler and Barnes both questioned whether Steamboat needed to grow at all.

“Could we use more housing? Absolutely,” Barnes said. “But … is there some law that says Steamboat has to grow at a certain rate?”

Supporters of the development plan threw up their hands when asked about parks and traffic. Yes, traffic was an issue, but was that a reason to reject housing in a city desperate for it? Yes, parks were important, but did the city need to spend $1.3 million per acre on them?

Instead, the project’s backers saw in the opposition a desire to stop Steamboat Springs from changing — to the detriment of the people already working in the city.

“There were the folks who got their stake in the land, and they don’t want anybody else to come here,” said Lara Craig, a Steamboat Springs school board member who grew up in the town and taught in its schools. “There’s nobody more disheartened to see how Steamboat has changed than someone who’s grown up here. And at the same time, we have to recognize that we have growth, and growth is going to happen.”

Other supporters accused opponents of spreading misinformation and of using racist and anti-housing language — as they perceived with a sticker that briefly surfaced in places and urged voters, in an apparent play on Brown Ranch, not to “turn Steamboat brown.”

Engelken said he saw no need to spread false information and had told fellow opponents the same. They had a winning hand, he thought, since the development had problems and the public would see them.

As for the stickers, which were described to The Post by several residents, Engelken said he learned of them and advised that they be dropped. He said they quickly were.

In the March 26 special election, nearly 58% of the 5,455 voters who cast ballots rejected the annexation.

Both sides wonder: Now what?

In a coffee shop near downtown last month, Engelken acknowledged that the economics and dynamics of Steamboat Springs had changed since he’d arrived. It wasn’t likely someone could afford to live there on a Safeway salary, as he’d done. City government had to figure out its tax structure, he said, and it needed subsidized housing.

No one had a good answer. Engelken just knew the Brown Ranch proposal wasn’t it.

“You’re not gonna solve these problems,” Engelken said. “You are (only) going to mitigate these problems.”

“Mitigation” is what the town is left with as its leaders and the housing authority search for a path forward. The town hired a consultant to lead public engagement on what to do next with Brown Ranch. In the meantime, it put out an interim plan to provide short-term solutions to the housing crisis. The various strategies could provide dozens of new units, here and there, though each have drawbacks.

But developing Brown Ranch remains the primary solution.

Part of that process, City Council president Gail Garey said, is figuring out how the city wants to approach its inevitable growth in a way residents can tolerate.