A year ago, the Steamboat Pilot & Today's classifieds section listed a one-bedroom apartment available for $700 per month, a two-bedroom for $1,150 and a three-bedroom, two-bath home for $1,550. The prices weren't rare finds but representative of 40 other listings, including those at Mountain Village and large complexes across town.
The rental landscape today is far bleaker for the prospective tenant, and last Sunday only six properties were listed for rent in Steamboat — including one-bedrooms for $800 and $1,200 apiece, two-bedrooms for $1,400 and $1,600 and high-end three- and four-bedrooms for $3,000 and $2,150 each.
While the classifieds represent a random sampling of properties that may be changing renters at a given time, the numbers are on par with statistics collected by the state from complex managers in Steamboat earlier this year.
“It's a classic supply-and-demand scenario. Demand is exceeding supply, and therefore your price goes up,” said Jason Peasley, executive director of the Yampa Valley Housing Authority.
Peasley said there are simply not enough homes and complexes in Steamboat to feed the demand right now, and even if ground is broken on more livable units, it could be two years before rental agreements are signed.
“The demand is right now,” Peasley said.
Rising rents
With high demand comes increased prices, as evidenced in the state's Multi-Family Housing Vacancy and Rent Survey, which surveys rental costs, vacancy rates and other characteristics of rental complexes in Steamboat and across the state.
The most recent statistics for the first quarter of 2014 show a sizable jump in the cost of rental units.
Average housing complex rent, which has hovered between $700 and $800 for most of the past decade, was $932 in the first quarter of 2014, representing surveys from March of this year.
The median rent of $744 for a one-bedroom and $963 for a two-bedroom condo are the highest recorded average the decade-old survey ever has reported.
Sponsored by the Colorado Division of Housing, the survey is researched and authored by Ron Throupe, an associate professor at the Daniels College of Business at the University of Denver.
A previous professor at the college started the first state rental surveys nearly 30 years ago, Throupe said.
Between 150 and 300 surveys are collected twice per year from units in Steamboat.
Steamboat Springs City Council member and economist Scott Ford said while he didn't disagree with the idea that the rental market is tight, the survey results may only represent a small sample of rentals.
“This could be the tyranny of small numbers,” Ford said.
While the spike in rent for the first quarter of the year could represent a sampling anomaly, rental availability and listing prices around town suggest otherwise.
Apartment complexes are at capacity, with Mountain Village full and non-employee tenants being asked to leave The Ponds to make room for seasonal renters who work for Steamboat Ski and Resort Corp.
Throughout the summer, The Ponds, which is owned by Ski Corp., reported no vacancies for one-bedroom apartments and had racked up a 45-person waiting list for prospective renters.
Peasley said The Ponds was built years ago to provide suitable housing for employees recruited from out of state or out of the country to work for Ski Corp. During the recession, more resort jobs went to locals, who were likely to have housing in place already, freeing up space for others not employed by Ski Corp. in the complex.
As the economy recovers, locals are taking available year-round employment, meaning recruits from out of the region will be moving back into The Ponds.
A change in employee housing needs is one example of the economy's effect on Steamboat rental market, Peasley said, and apartments are just a small percentage of the roughly 2,250 rental housing units in Steamboat.
Single-family rental homes face their own set of economic factors driving up the cost of rent.
Some homeowners who faced foreclosure during the recession have rejoined the rental market, encroaching on the available supply of homes.
Other prospective homeowners who may have qualified for home loans before the economy slowed may not qualify for stricter requirements banks now impose, forcing them to continue renting.
Foreclosures also have played a role in increasing rent for properties within homeowners associations, said Ken Schomaker, an associate broker who handles rentals for MR Realty.
Schomaker said that many associations saw a drop-off in dues when foreclosures shot up, and although this could mean two years of missed HOA payments for a house, banks only were required to pay back six months of dues when they took over ownership.
Neighborhood renovations and repairs suffered as a result, and as new buyers reclaim the homes, dues are increasing to make up for lost association income.
Shomaker acknowledges that rental prices are going up, but he thinks the increases only bring rental rates back to pre-recession norms.
“Rates are going up,” Shomaker said. “But rates have come down a lot over the last four to five years.”
The renters
Sedge Mackey represents one type of prospective tenant in Steamboat. He spent the past seven years living in Boulder but is moving to Steamboat for the winter to work at Steamboat Ski Area.
Mackey, 25, was offered employment as a lift operator but is struggling to find housing, despite starting his search two months before the season begins.
Mackey's 40-pound red heeler prevents him from bunking up in employee housing, even though the less than $400 per month price tag is appealing. Unless he rents out an entire two-bedroom unit, Mackey said, his dog isn't welcome, and other prospects across town present similar challenges.
He expects to bring home about $1,100 per month in income and is willing to put as much as $750 toward housing and utilities.
But even giving up two-thirds or more of his income for housing hasn't been enough to find a place, Mackey said.
“Having a dog really limits my options,” said Mackey, who posted a housing wanted ad on Craigslist and searches the site and the classifieds each morning for new properties.
According to the U.S. Department of Housing and Urban Development, families who spend more than 30 percent of their income on housing are considered cost burdened and may not be able to afford necessities such as food, clothing and transportation.
In Steamboat, finding housing that only takes 30 percent of your income is challenging. The figure doesn't take into account utility costs, either.
“I don't know if that's realistic in this town,” Peasley said. “It's really tough.”
While Mackey is moving to Steamboat with an acceptance of the high cost of living, other long-term residents are struggling to stay afloat.
Single mother Jenny Schmidt probably would be more comfortable with her two children in a three-bedroom home somewhere in town, but she admits that her “decent job” that she loves, plus a side job cleaning condos, only leaves her with a budget of about $1,000 per month for housing.
“Every month, it's a scary juggling act to pay rent,” said Schmidt, who sleeps on her living room couch so each of her children can have their own room.
Despite the high cost of housing, Schmidt chooses to focus on the reasons that keep her in Steamboat.
“I love where I work. My kids are getting an amazing education in a beautiful town, and it feels like a stay-cation every summer,” Schmidt said.
But the high cost of housing has forced Schmidt to give up “extra amenities” like ski passes for the family and her own desire for adult socialization — “Have you ever tried socializing or dating as a single parent when you don't have your own space in the home?” Schmidt asked.
“We're happy and don't complain, it could definitely be worse,” Schmidt said. “But the housing is a huge issue.”
Chris Babcock first moved into employee housing for the ski area in 2009, staying at The Ponds for two years. The dog-friendly apartments with lower rent than the rest of Steamboat were appealing to Babcock, who moved in for a second stint last year.
Faced with the prospect of moving out now, Babcock is disenchanted at the idea of rejoining the general renter pool.
“There is not much available out there to rent if you make under $40,000 a year,” said Babcock, who was told in September that under the ski area's policy of favoring employees, he would need to leave The Ponds this fall to make room for Ski Corp. workers.
“To rent a comparable apartment anywhere else in Steamboat would cost hundreds of dollars more per month,” Babcock said. “The town is no longer affordable for ski bums, or cowboys or journeymen, but a place where you live if you have made money in Steamboat-past or some other city far, far away. Pulling yourself up by boot buckles is no longer looking like an option for those who want to come west and see the mountains and work hard.”
Babcock said other renters are leaving The Ponds, and he hopes the freed-up space will be enough so that he can keep his apartment, for now.
Finding a home
To find a suitable rental in Steamboat means being persistent and serious, according to Kristi Hoffman, Steamboat Sotheby's International Realty's rental division director.
Hoffman said she currently has a database of about 45 potential renters who've expressed interest in finding a place in Steamboat. While the fall is always a busy time for potential renters, this year is busier than usual.
“We have a lot of applicants every day,” said Hoffman, who works to match renters and tenants.
Hoffman said the best way to get into a rental home is to actually follow through when interested in a property.
“We get many inquiries and calls every day, but only about 5 percent of those callers or online inquirers actually complete and submit rental applications,” Hoffman said. “Fair housing laws require us to offer a first-come service, and we are usually able to provide an excellent opportunity to those who promptly submit an application.”
Hoffman said that oftentimes, applications are not property specific, and once a prospective tenant fills out an application, they can be placed in another home they may not have inquired or known about.
She encourages renters to build a relationship with a rental broker who will go to bat for them.
“With the low inventory and high demand, it is important for serious prospective tenants to create a relationship with a rental manager, or in the case of our firm, a rental broker who will work on their behalf,” Hoffman said.
Peasley encourages tenants to be open-minded when seeking rentals, and he said most long-term residents have at least one story about a bizarre living arrangement they endured before finding something better.
“That's kind of the story about living in Steamboat,” Peasley said.
One option for someone living on a lower income is sharing a home found on Craigslist or moving into an empty bedroom in someone's house, Peasley said.
Some renters will choose to venture into nearby communities with lower rent, such as Hayden, Oak Creek or Stagecoach. Peasley doesn't think that renters are being forced out but rather that they would choose to move to another town to get a better home than what they could afford in Steamboat.
“You can afford something in Steamboat,” he said. “People might choose to go elsewhere though because they can afford a product that they can't afford here.”
Employee housing
Finding rental housing in Steamboat is tough enough without the additional burden of searching from outside of the city, as new residents can discover.
“If you're out of town and looking, you're at a huge disadvantage,” Peasley said.
The lack of affordable or available housing has affected the ability to keep and retain employees in some cases at Yampa Valley Medical Center, an employer of about 500 full- and part-time workers, according to Human Resources Manager Mary Wirta.
Wirta said it's most difficult to find housing that allows an employee's pet.
“It absolutely has an effect on hiring,” Wirta said. “The inability to secure affordable housing or rental housing that accommodates pets has resulted in candidates either withdrawing from consideration or not accepting a position with us. It also affects us after hire as individuals may be unable to continue their employment as they may have trouble securing housing outside of our transitional housing.”
The lack of options causes strain on new employees, she said.
Wirta said the hospital offers transitional rentals for as long as three months while new employees search for a more permanent home.
Sheraton Steamboat Resort is in the process of signing a four-month lease with the city to use the Iron Horse Inn building to house as many as 40 employees for the winter. The agreement will cost the Sheraton $18,000 per month from Dec. 1 through March 31 and give the resort an advantage in bringing out-of-area employees to Steamboat.
“It's a very important recruiting tool for us.” said Kristal Eckley, director of sales and marketing for the Sheraton.
Eckley said she didn't know how many times it had happened, but she was sure that in the past, potential employees had turned down job offers with the resort because they weren't able to find housing.
Steamboat Springs School District is able to hire new employees at the beginning of summer, leaving a window of time before the school year begins to secure housing, Human Resources Director Katie Jacobs said.
Interviews are conducted in April and May, and offers typically are made to new employees by June, Jacobs said.
“They're looking right when everyone's leaving, from a seasonal perspective,” Jacobs said.
While this made securing housing easy for a few new teachers in the district this year, Jacobs said that throughout the years, she's observed difficulty for other companies that she's handled human resources for in Steamboat.
Future of housing
While those in the industry agree that supply in the rental market is down and demand is up, a solution to the situation isn't so clear.
The lone apartment building under construction in Steamboat is a 42-unit complex of one- and two-bedrooms located on the corner of Skyview Terrace and Whistler Road.
Near the base of the mountain, the Ski View complex is slated for completion sometime around May 2015, according to project developer Paul Brinkman, of Brinkman Partners.
The 33 one-bedroom units are about 680 square feet and will rent for somewhere between $950 and $1,050 per month, while nine two-bedrooms are about 980 square feet and will go for $1,400 or $1,450, Brinkman said.
Construction broke ground on the complex in July, and by last week, a Brinkman Construction crew was well on its way to erecting exterior walls at the complex.
Brinkman said the company will launch a website for Ski View by the end of the year and begin arranging lease agreements with renters by January.
“We'll have a fair amount of it leased before the construction is done,” Brinkman said.
The units will be modern, with high-efficiency appliances, and each will have its own washer and dryer.
Brinkman said he plans to make the two-building complex pet friendly but is considering limiting animals to one building. There are plans to build an outdoor dog run, and Brinkman said he also is considering a dog-washing station.
Those familiar with the housing market said there aren't any other rental developments in the works yet for Steamboat, despite the growing demand.
Assuming that the population continues to increase in Steamboat, as a recent demographic survey conducted by the Steamboat Springs School District would suggest, the demand for housing also will continue to increase, driving up prices even higher.
A city inclusionary zoning ordinance put in place in 2007 that required residential developers to allocate 15 percent of new developments as affordable housing was suspended in summer 2013, with city officials saying the program was flawed and unfair to developers.
Developers also could choose to pay into an affordable housing fund in lieu of building affordable units.
The city is scheduled to revisit the issue in June to consider whether to reimpose the sanctions or make new regulations aimed at developing affordable housing.
Peasley said the Yampa Valley Housing Authority owns a piece of property near the intersection of Copper Ridge Drive and Routt County Road 129 that previously was considered for an affordable housing apartment complex. Efforts to build the complex were put on hold when the recession hit, and the Housing Authority hasn't revisited the prospect since.
“It's still something we're exploring, but we don't have any immediate plans,” Peasley said.
Funding is an issue but could be achieved through the purchase of tax credits or by proposing a tax to property owners, Peasley said.
A property tax would mean the people who own businesses and homes in Steamboat would be footing the bill for rental housing for a lower-income demographic that doesn't own their homes.
It's a “Robin Hood” scenario in Peasley's eyes, but one residents could consider in the name of strengthening the community as a whole.
To reach Teresa Ristow, call 970-871-4206, email tristow@SteamboatToday.com or follow her on Twitter @TeresaRistow