Board wants STR tax $10 million annually for Brown Ranch

Steamboat Springs City Council plans to ask voters to approve a short-term rental tax that could raise the $10 million annually needed for infrastructure at Brown Ranch.
John F Russell / Steamboat Pilot

Steamboat Springs City Council intends to require voters to support a short-term rental tax that would provide at least $10 million annually needed for infrastructure at Brown Ranch.

In a working session on Tuesday, May 10, a majority of council members indicated that they would support a ballot question that would impose a 7%-10% tax on these rents, if approved in November. This tax will not be levied on commercial housing businesses.

Revenue from the tax will be limited to subsidizing achievable housing by providing incentives, contributing to projects such as Brown Ranch, and building housing and transportation-related infrastructure, according to council discussions.

“It’s very simple for me,” said Councilman Joella West. “We have a problem with short-term rentals and you know we have to put Brown’s farm on its feet if there is affordable housing in this valley.”

“So we want you to vote for this STR tax and it will be the amount this city needs to spend on Brown Ranch over the next 20 years,” West continued.

The idea of ​​taxing short-term rentals has been talked about since the beginning of the year, but in the council’s latest discussion in April, the tax was set to be smaller, with options discussed between 1% and 4%.

The conversation developed last week when Jason Beasley, executive director of the Yampa Valley Housing Authority, told the board that the infrastructure needed on Brown Ranch would require about $10 million a year to build. Over a 20-year period, this would yield about half of the estimated total of $400 million for water, sewer, electricity, and roads on the undeveloped plot of land west of Steamboat.

The board is now echoing sentiments from some Housing Authority board members who believe the short-term rental tax needs to provide significant funding for Brown Ranch.

Root County Commissioner Tim Corrigan, who is a board member of the Housing Authority and has been on board members lobbying for a larger tax, said in April.

Council member Heather Slope said a tax of at least 7.14% would bring projected total revenue to about $10 million, though she said she would prefer there to be more protection.

Council Chairman Robin Crossan and members Jill Gary and Dakota McGinlay both said they support a 10% tax. Council member Michael Puccino said he felt the tax should be lower, between 5% and 7%. However, he is clearly torn and said he might support a tax of up to 10%.

“I can be sold on the fact that if we limit it to the right things, this could be great for the future,” Buccino said. “But again, I’d like to pass it, because what happens if it’s too high? We don’t get anything.”

Crossan said they hear from owners of commercial lodging entities in the city. While they both pay the same accommodation tax, the hotel will pay a much higher commercial property tax rate while the short-term rental will pay the residential rate.

Several hotels were converted into temporary housing for the workforce in the past year because short-term rentals have exhausted the long-term rental market locally.

“That (the tax) isn’t even going to be the playing field, but it helps – I think – the landlords understand that we’re trying to work somehow somehow even on the field a little bit,” Crossan said.

The Colorado legislature touched on the idea of ​​property tax equity in this session, but that effort ultimately went nowhere. Corrigan estimates that the disparity in Root County is significant, with short-term rentals paying about $31 million less in property tax than they would at the commercial rate. That equates to about $9,000 per rent, he said.

Short-term rentals are on the agenda of a joint meeting of the Council and Root County Commissioners on Monday, May 16.

A majority of council members also said they support repealing the tax after 20 years, which would extend across the window over which Brown’s farm is expected to be built. Puccino disputed this, saying he felt it had to go on forever.

The council will then conduct the first reading of a decree that would put language on the ballot paper in November. The city’s chief financial officer, Kim Webber, said the first and second readings of this law would need to be approved in July to qualify for this year’s elections.

It’s each council member’s responsibility, Crossan said, to get out into the community and talk to neighbors and “people you don’t usually talk to” and come back with a more sophisticated idea of ​​what level of tax voters would be palatable.

“Get their opinions and promise a more comprehensive idea of ​​where we think we can get to next time we have the conversation,” Crossan said.

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