For the second year in a row, Gov. Jared Polis on Thursday called lawmakers into a special legislative session to cut property taxes.

Only this time, lawmakers won’t reconvene just out of concern over rising property taxes; it’s also out of fear that without a special session, voters might enact tax cuts so deep that they decimate state and local budgets.

“It’s really a win-win, if we can save homeowners money and small businesses money on their property taxes and make sure that we’re not going to devastate our schools and other local entities,” Polis said in an interview with The Colorado Sun ahead of the announcement.

The session will start Aug. 26, and would have to last at least three days in order to send a bill to the governor’s desk to be signed into law. 

In exchange for a modest package of additional tax cuts and stronger limits on property tax growth, conservative groups said they would pull two measures off the November ballot — Initiatives 108 and 50 — that have created panic among state and local government officials, developers and bond investors over their wide-reaching impacts.

Initiative 50, which would amend the state constitution, might be the more consequential of the two. It would limit property tax revenue growth to 4% statewide, with no flexibility for local governments or their voters to opt out without a statewide referendum. 

Initiative 108 would cut property taxes for homeowners and businesses by an estimated $2.4 billion. That’s the equivalent of 15% of the $15.5 billion that schools and local governments collected this year. The state would be on the hook to reimburse schools and local governments for much of the revenue lost to the cuts.

Polis said to preserve the agreement, he won’t sign any bills passed during the special session until Initiatives 50 and 108 are pulled from the November ballot.

Legal interpretations vary on how much the state government would have to pay if the measures passed. But state budget officials say the measures could create a budget crisis on par with an economic recession, mandating deep cuts to essential public services like K-12, higher education and Medicaid.

The proponents of the measures — Colorado Concern, an alliance of state business executives, and Advance Colorado, a conservative political nonprofit — have argued those concerns are overblown.

Business groups insist the property tax relief passed by the legislature in recent years hasn’t gone far enough to serve as a true replacement for the Gallagher Amendment, the tax-limiting constitutional provision that voters repealed in 2020.

Even after the legislature passed a round of cuts in last year’s special session, property tax revenue still went up 21% statewide in the 2023 tax year, according to the Colorado Department of Local Affairs.

“This property tax cut and cap agreement provides the permanent tax relief that Coloradans have been demanding and will prevent future spikes in property tax bills going forward,” Advance Colorado President Michael Fields said in a statement.

Under a proposed deal presented to the state’s Property Tax Commission on Monday, the legislature would cut taxes by an additional $255 million next year, for taxes owed in 2026. That’s on top of $1 billion in tax cuts the legislature approved at the end of its regular legislative session, which ended in May.

The legislature would also put a new cap on school districts, limiting their property tax growth to 12% over a two-year period.

In exchange, lawmakers have demanded that the groups provide assurance that they won’t bring back similar ballot measures in the next 10 years.

Lawmakers are racing against the clock to get the deal finalized before a Sept. 6 deadline to remove initiatives from the November ballot. The Colorado Secretary of State’s Office has to certify the ballot by Sept. 9, as ballots must be mailed to military and overseas voters by Sept. 21.

The special session will be the third under Polis since he was sworn into office in 2019. 

The deal was negotiated behind closed doors in recent weeks among the governor’s office, Advance Colorado’s Michael Fields, and Republican and Democratic lawmakers. A special session seemed unthinkable until all the sides restarted negotiations that flamed out during the regular legislative session, which ended in May. 

The talks started up again after lawmakers and the conservative groups behind the ballot measures presented to the Colorado Forum in recent weeks. The forum is a decades-old public policy panel made up of state business and civic leaders that takes positions on pressing issues. Forum President Gail Klapper urged the power players to try to find a solution.

When the mayors of Colorado’s three largest cities and a long list of top civic and business groups from across the political spectrum separately issued letters saying they supported a special session to find a compromise, it was clear lawmakers would be returning to the Capitol.

“I think it’s a good compromise,” said Sen. Barbara Kirkmeyer, a Brighton Republican who was the first elected official to publicly call for a special session. “It reduces risk in the future, makes sure that Colorado has a viable future and still further reduces property taxes, which is what my aim is, is looking out for the property owners of the state.”

On Thursday, the top four Democrats in the legislature issued statements in support of the special session, saying it was needed to keep “reckless” measures off the ballot.

“It is a grave risk to our state that wealthy special interests have proceeded with ballot measures that would devastate our economy, cut funding for schools, and risk financing for critical infrastructure projects like affordable housing,” House Majority Leader Monica Duran, a Wheat Ridge Democrat, said in a written statement. “I’m proud to go back to work to help keep people in their homes, provide additional tax relief, and protect funding for our schools that we’ve fought so hard for.”

Top legislative Republicans issued statements of support as well.

But not everyone is happy about it. At the tax commission meeting this week, Rep. Cathy Kipp of Fort Collins said House Democrats were divided over whether it was worth taking the deal.

“There are some people who are risk averse and would like to proceed with a special session and there are others who don’t appreciate that this is the way things are moving forward,” she said.

Holding a special session isn’t free. Past sessions have cost taxpayers close to $25,000 a day to pay staff and lawmaker stipends as they trek to Denver from across the state. 

Polis said he would have preferred the deal to have been reached during the regular lawmaking term this year, but that the special session “de-risking the November ballot” is still better than nothing.

“It came close,” Polis said. “In fact, I now think we see how close by the fact that a lot of this is just refining the cap mechanism that already went in place and building off the work that was already done.”

The special session could also bring political intrigue beyond the property tax debate.

It’s an election year, and Republicans are trying to dismantle the Democratic supermajority in the House and prevent one from being secured in the Senate. The GOP could be tempted to force the issue with controversial amendments and floor speeches.

The session may also invite disruption from Democratic lawmakers who aren’t returning to the Capitol next year after losing their primary races in June or abandoning their reelection bids midcycle. There are also several term-limited Democratic and Republican representatives and senators who will be returning for the special session.

Finally, unions could push lawmakers to take up some pro-labor bills passed during the session this year that Polis vetoed. That’s part of why a special session wasn’t called to strip out a provision in a bill kneecapping a 2024 ballot measure that would overhaul the state’s election process.

The governor can limit what topics can be discussed in a special session, but lawmakers have some legal leeway to decide what qualifies within that scope. Polis said he’s happy to have discussions about those union measures next year, but that the special session is limited to property tax legislation in order to stop the measures from appearing on the November ballot.

“There’s only a small window of time before the ballot initiatives can be taken down,” Polis said.

Despite the risks, Polis is already pointing to the special session as another example of his ability to broker policy deals. During the regular lawmaking term this year, he helped shepherd agreements on oil and gas, medical malpractice lawsuits and Taxpayer’s Bill of Rights refunds.

The legislature’s next regular session begins in January, when newly elected representatives and senators will begin their terms.

Homelessness in Denver increased by 12% in the past year, but for only the second time in recent history, the number of people living outside has decreased, according to the results of an annual count released Wednesday. 

The number of people living in shelters, transitional housing, tents and on the streets of Denver climbed to 6,539 from 5,818 the previous year. In the seven-county metro area, homelessness rose 10% to 9,977 people. 

In Denver, the good news is that there are fewer people sleeping in tents and on the streets after a massive effort to move people indoors. 

Denver Mayor Mike Johnston, who campaigned on a promise to house 1,000 people by the end of his first year in office, said the drop in unsheltered homelessness in the city was among the largest in the nation, in line with Houston and better than Seattle, Chicago, Washington, D.C., and Atlanta.

There were 1,273 people sleeping outside in Denver on the January night volunteers and outreach workers conducted the count, down from 1,423 a year prior. 

And as of Wednesday, there are 117 tents in the city, down from 242 when the “point-in-time” count was taken, the mayor’s office said. The city has cleared 17 encampments and closed 350 blocks of downtown to camping under the mayor’s homelessness initiative. Critics have accused the city of offering people temporary shelter instead of more permanent options. 

“We have always believed that homelessness is a solvable problem, and now we have the data to prove it,” Johnston said in a triumphant news release. “Denverites should be proud to live in a city that responds to homelessness with compassion.”

Not counted in the survey: the 4,300 new migrants from mainly South America who were sleeping in city-funded shelters on the night of the count. 

The Metro Denver Homeless Initiative, which organizes the annual count required by the U.S. Department of Housing and Urban Development, said that leaving migrants out of the count was the best way to determine “the most accurate information of those experiencing homelessness on a single night.” 

The number of people living in shelters in Denver grew by 20% throughout the year, however.

In the seven-county area, the number of people sleeping outside increased by 5.6%, to 2,919. The number of chronically homeless — people who have not had a home for at least a year — rose by 16% and the number of homeless families grew by nearly 50%, to 3,136 from 2,101.

Volunteers spread across the metro area, throughout Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties, from sundown Jan. 22 to sundown Jan. 23, tallying and interviewing people in shelters and outside. 

Johnston said the data shows the city needs to work harder at preventing homelessness in the first place, as well as expanding family shelter and permanent housing options. The Denver City Council is scheduled to vote next week on whether to ask voters to approve a sales tax to generate $100 million annually for affordable housing. The Affordable Denver Fund would pay for 44,000 units of affordable housing over the next 10 years, the mayor said.

On the west side of Denver, a developer has big plans to transform a polluted brownfield site into thousands of new homes.

It’s exactly the sort of project state leaders have been clamoring for, accommodating a mix of income levels and housing types. Some would be affordable for low-income residents, others sold or rented at market rate. The project would include single family houses, as well as denser multifamily properties, developer Chris Elliott of E5X Management told The Colorado Sun.

But, Elliott says, the financing he needs to build it could all fall apart in November if voters adopt a new constitutional limit on property taxes in Colorado.

Municipal bond investors are threatening to leave Colorado if voters approve a proposed cap on property tax growth, putting the state’s largest source of infrastructure funding for new development in jeopardy.

“We’ve seen investors starting to pull back from the Colorado market,” said Tiffany Leichman, a public finance specialist at Sherman & Howard, a Denver-based law firm.

“If that money dries up, development is essentially going to come to a halt.”

The bond market fears have led a growing number of developers and financial industry insiders to speak out against Initiative 50, exposing new fractures in the coalition of business groups, Republican officials and conservative activists who would typically be expected to back a statewide tax cut.

A number of GOP lawmakers have criticized the proposal, including Sen. Barbara Kirkmeyer of Brighton and Rep. Lisa Frizell of Castle Rock, two of the most influential Republicans at the Capitol on fiscal policy. Last month, Jon Caldara of the Independence Institute — who has backed a number of tax-limiting ballot measures of his own — entered the fray, calling it an “unworkable mechanism.”

Brought by conservative political nonprofit Advance Colorado, Initiative 50 would limit annual property tax revenue growth statewide to 4% in an attempt to address the skyrocketing tax bills of recent years. But the measure, which has qualified for the November ballot, would also tie a new constitutional knot around public finance in Colorado, with potentially wide-ranging consequences.

Property taxes are primarily used to fund city and county governments, schools and other local services. But they also help finance private development through special taxing entities like metropolitan districts and urban renewal authorities.

When developers build a new subdivision, they’ll often set up a metro district to finance the project’s infrastructure, such as roads and utilities, as well as community amenities like parks and recreation centers. To pay for it all, they issue tax-exempt bonds that are repaid through the future property tax bills of the community’s residents.

Bond investors worry a 4% statewide cap will trigger local property tax cuts that could prevent them from being paid what they’re owed.

In June, a group of eight law firms sent a letter to Advance Colorado and Colorado Concern, another supporter of the initiative, predicting that the tax-limiting measure would have a “severe” and “immediate” impact on the municipal bond market across the state. In July, the Colorado Municipal Bond Dealers Association weighed in with an open letter of its own, saying Initiative 50 will raise the cost of borrowing for local governments and slow the flow of capital to Colorado.

“I think it’s a dangerous game that we’re playing,” said Zach Bishop, a bond underwriter who heads the special district group at Piper Sandler. “The potential implications of passage of Initiative 50 are an increase in home prices for Coloradans because the land development process becomes more challenging for home builders.”

Karen Crummy, a spokesperson for the campaign in support of Initiative 50, dismissed the concerns in a statement to The Sun, insisting the measure would reduce housing costs, not increase them.

“These property tax increases are regressive and cruel, especially for young families trying to buy a home, or working-class families and seniors trying to stay in their homes,” Crummy said. “Voters will roll their eyes when they hear politicians, investment bankers and white-shoe lawyers argue that the sky will fall because the state can’t keep every cent of 30%, 40% or even 50% property tax increases.”

A 4% cap could trigger frequent cuts

In November, Colorado voters could face yet another round of decisions on complicated tax policies that will have significant implications for taxpayers and public services for years — and possibly decades — to come.

The more straightforward of the two is Initiative 108, another conservative measure that would cut property taxes by $3 billion next year. Its eye-popping cost has made it a target for public officials who worry about its impact on local government budgets, and that of the state which would be required to replace a sizable amount of the revenue lost to the cuts.

But over the long term, Initiative 50 might be more consequential.

Statewide property tax revenue has grown by less than 4% just 15 times in the past 60 years, a Colorado Sun analysis of Department of Local Affairs data found. That means homeowners can expect the proposed cap to trigger a statewide tax cut more often than not.

Even though 4% is double the Federal Reserve’s 2% target for inflation, critics say it doesn’t allow enough of a cushion for growth and new development. As an example, if you build a $500,000 house on an empty patch of land worth $10,000, that property’s value would jump by 5,000%.

Colorado Concern and Advanced Colorado acknowledged this concern when they introduced other property tax cap proposals this year that had allowances for new development. But those measures didn’t make the ballot, and Initiative 50 has no such protections, leaving it in the hands of elected officials and the courts to decipher.

The tax cuts that would result are likely to lead to lawsuits, Leichman suspects. If special districts cut taxes as required by the amendment, bond holders might sue over a breach of their contract, which typically calls for taxes set at a certain level to repay the debt. If the district doesn’t cut taxes, taxpayers could sue.

Even if courts side with the bond holders, industry insiders say it could still have a chilling effect on new debt, which wouldn’t be protected by contractual guarantees in place before the cap.

Supporters point out that other states have implemented property tax caps without destroying their bond markets. And until 2020, Colorado had a property tax-limiting provision of its own in the Gallagher Amendment.

The difference is Colorado had a system under Gallagher for local districts to adjust their mill levies upward to cover debt payments when tax cuts were triggered.

Initiative 50 appears to require a statewide vote to exceed the 4% cap. That could take the power to problem-solve out of local officials’ hands.

The stakes for development are high

If the bond market’s concerns prove correct, the stakes could be gigantic.

Colorado has over $22.8 billion in outstanding debt issued by local governments, school districts and special districts — a list that includes traditional government services like firefighting and hospitals as well as entities that finance the public infrastructure needed for private sector development.

In 2023, 88% of all new homes along the Front Range were built using metro district financing, according to Peak Economics Research & Consulting. That’s up from 60% a decade ago.

Elliott worries his brownfield redevelopment project won’t get built at all without the ability to tap into government-issued bonds at attractive rates. It’s not clear if bond prices have shifted yet as a result of investor concerns, but if the measure passes, Elliott said it could turn a developer’s ability to generate $10 worth of financing into more like $3 or $4.

“It will likely make it just that much harder, if not impossible to be able to do it,” Elliott said.

But that doesn’t mean developers won’t build anything at all. He suspects the future of new housing development in Colorado would involve a phased approach, in which the homes are built and sold, then community amenities follow years later once a developer can secure additional financing.

Other developments that rely on government-issued bonds might turn to the corporate bond market instead. But corporate bonds tend to cost borrowers an extra 30% in financing costs, Leichman says — if the project can be built at all.

On the flip side, a drop in metro district debt — which is repaid through property taxes — could save many homeowners money on their tax bills. The trade-off, Elliott says, is a higher up-front cost to buy a home.

The sheriff of Central City, Billy Cozens, was ready to settle someplace quiet. The idyllic home he and his new wife, Mary Cozens, built in the late 1800s was among the first homesteads in the Fraser River Valley. It became a popular stagecoach stop and ended up on the National Register of Historic Places. 

Now the meadow along U.S. 40 that was once the Cozens’ backyard is a battlefield pitting Fraser residents against a developer. That developer, Clark Lipscomb, has plans for homes and hotel rooms there. The residents say a 2003 agreement promised that Cozens Meadow would be forever protected in a conservation easement. 

The fiery fight over the historic meadow is headed to a trial this week as Lipscomb pushes proposals for more development in his Grand Park community in Fraser, just outside Winter Park.

When Amanda Erath moved to Grand Park in 2019, she would go cross-country skiing in the winter in Cozens Meadow. In the summer her neighbors play frisbee golf there. 

Now Lipscomb has fenced and gated the area and filled the meadow with grazing cows. The latest proposals for homes and hotels in the meadow pushed Erath — and about two dozen of her neighbors — to plead with town planners to better protect Cozens Meadow. 

“He is, piece by piece, destroying one of the most beautiful areas in our community,” Erath said in an interview. “We shouldn’t have this level of development without also thinking about how it will impact the community and addressing that at the same time.”

The complex fight over Cozens Meadow has implications for both historic conservation easements in Colorado and the ongoing challenges facing homebuilders in rural communities. Both sides are sure they are right and soon a Grand County judge could crown a winner. 

To follow the twisting tale of protections around Cozens Meadow, let’s go back more than 20 years. 

In 2003, renowned Colorado developer Robert “Buz” Koelbel and his partners at Cornerstone Holdings reached an agreement with the Town of Fraser to annex their roughly 1,400-acre Rendezvous property where they planned more than 3,300 homes, 1,400 hotel rooms and nearly 500,000 square feet of commercial space on both sides of U.S. 40 between Winter Park and Fraser. The deal included a plan for a conservation easement to protect 467 acres around Cozens Meadow and Elk Creek Meadow as open space. 

The next year Koelbel split with his partner and carved off the property west of U.S. 40 for Cornerstone Holdings and the company’s head of real estate, Lipscomb. Lipscomb planned as many as 2,500 homes, 1,300 hotel rooms and 400,000 square feet of commercial space on 1,300 acres the company amassed for its Grand Park community. The deal included Cornerstone controlling the land around Cozens and Elk Creek meadows.

A 2005 agreement between Fraser and Cornerstone updates the Rendezvous development plan and notes 468 acres of open space around both Cozens and Elk Creek meadows. That 2005 agreement does not specifically reference a conservation easement plan. Lipscomb argues the 2005 agreement removes the conservation easement requirement and says all the development approved by the town since has not included requirements for  an easement around Cozens Meadow. The Town of Fraser disagrees. Twenty years later, this is the critical legal issue in the trial that starts Monday in Grand County. 

Lawsuits, stalled construction

As Cornerstone developed Grand Park, spending more than $100 million since 2005, homes were built around Cozens Meadow. In addition to homes, Lipscomb has built a gas station and a small market, a bowling alley and cinema, and donated land and infrastructure for the Grand Park Community Center. 

A legal battle over open space protection launched in 2020 between the Town of Fraser and Cornerstone. In 2021, the town stopped approving new construction projects in Grand Park. That year Lipscomb closed public access to Cozens Meadow, arguing the land is private property. He sells homes in a neighborhood of Grand Park called Cozens Meadow. 

“The town was trying to strong arm our company to stop these buildings — trying to get something they are not entitled to on our private land,” Lipscomb told the town board at its April 17 meeting.  

Lipscomb has always argued that Cozens Meadow is private land “where Grand Park was allowing public use,” he wrote in a September 2020 letter to the Fraser town board.

“It is unfortunate that a small minority of residents have determined to attempt to undermine long-standing agreements and that those efforts have resulted in personal threats against Grand Park, me and my family,” he wrote in the 2020 letter. “We are very proud of the many community-wide projects Grand Park has been involved in. Please stand up and protect private property rights as well as those agreements we have all worked tirelessly to follow.”

Lipscomb did not respond to emails, texts and calls from The Sun. 

Lipscomb sued the town, arguing the Fraser mayor’s 2020 approval of an 18-acre conservation easement for Elk Creek Meadow — not Cozens Meadow — met all the open space requirements for the community outlined in the 2005 agreement. The town sued Lipscomb, arguing the developer needs to follow the 2003 agreement and protect Cozens Meadow.

It was not the first lawsuit between Lipscomb and the Town of Fraser. Or the other town that borders Grand Park. The Town of Winter Park also sued Cornerstone in 2017 over infrastructure improvements, which resulted in a 2020 settlement. 

Lipscomb’s work on commercial space — about 45,500 square feet of concrete buildings called Market Street where he planned restaurants, shops, music venues, office space and an indoor putt-putt location — stalled in 2020. The buildings sat unfinished for more than four years as Lipscomb and town leaders in Fraser wrangled over expired permits and sales tax incentives. Last fall the town reinstated permits for construction on the Market Street buildings, which Lipscomb has said will be completed by October 2025 and open by next winter, when the permits expire. 

“Big picture we think this area is going to continue to grow and we want to be here and be a part of it and we want it to grow in a way that is healthy for the community, the residents and our tourists,” Lipscomb told the board at the April meeting.

Over the Christmas holiday last year, someone erected a large sign in front of the roofless, bare-walled buildings that read “It’s a beaut, Clark,” harkening to the quip from the movie “Christmas Vacation.”

In May, a Grand County District Court judge ruled in the lawsuits, siding with Lipscomb and Cornerstone on some claims and siding with the Town of Fraser on other claims. But District Court Judge Mary Hoak did rule “there are genuine issues of material fact” regarding how the 2003 and 2005 agreements intersect concerning open space protection at Grand Park and Cozen Meadow. 

Hoak in 2021 ruled that Fraser had to continue reviewing Grand Park’s plans, despite the issue with Cozens Meadow. 

New plans for homes, hotels in Cozens Meadow 

And the most recent news in the Fraser vs. Lipscomb scrap landed last week when the Town of Fraser planning commission recommended the town deny the latest development proposal from Lipscomb.

Those plans for the Village at Grand Park — behind the unfinished buildings — shuffle and adjust allowed development and densities with two proposals seeking approval for an overall 245 homes, 550 hotel rooms and 175,000 square feet of commercial space along U.S. 40. The development would encroach on about 15 acres of Cozens Meadow.

More than 20 Fraser residents sent letters to planners before the July 24 meeting, urging a rejection of Lipscomb’s latest development proposals. Many letter writers own homes in Grand  Park and suggested the new development did not align with the 2003 agreement. Many asked that planners wait for a court ruling in the pending trial before approving development in Cozens Meadow.

The planning commissioners recommended that the town board deny Lipscomb’s latest applications, saying the buildings proposed inside Cozens Meadow deviated from original development approvals and Lipscomb should ask the town board to amend the initial 2005 plan — with public meetings — before proposing the new construction. 

Fraser Town Manager Michael Brack said Lipscomb plans to submit the plan to the town board — with the planning commission recommendation for denial — at either the Aug. 21 or Sept. 4 meeting. If the board rejects his plan, Lipscomb will  have to wait six months to reapply. Brack said the decision by the planning commission has nothing to do with the lawsuit.

The proposed development “is not in alignment with what was approved in the 2003 and 2005 agreements. It was such a large change in use,” Brack said. “The town is definitely supportive of development where it is agreed upon and where it has been approved.”

The cows and locked gates at Cozens Meadow and the most recent development plans have galvanized a coalition of residents in a fight to protect the 2003 plan for open space. 

“There was an extensive process in the late 90s and into the 2000s where all this was decided and if you start changing it now you are dishonoring that public process and those who came before us without a new, extensive public process going down,” said Fraser resident Joseph Landen, who supports the Restore Cozens Meadow campaign. “Will there be a settlement with Clark to put new development at the meadow? Or should we save every acre in the original agreement? That discussion needs to be very public.”

It’s important to note that the 2003 annexation agreement only included a plan for a conservation easement, not an actual conservation easement. (Lawyers for Cornerstone, in a trial brief filed last month, argued the statute of limitations bars the town’s complaints connected to the 2003 agreement.)

And there has never been a formal mapping with exact borders of Cozens Meadow. 

“When I read the annexation agreement, it says that the town is entitled to 466, 467 total acres of open space,” Fraser planning commissioner Parnell Quinn said at the planning board’s March 27 meeting. “Cozens Meadow has never really been defined as to what Cozens Meadow is, which has been an issue. If we resolve that, this wouldn’t be such a heartburn for everyone and it would not be such a contentious conversation every time we go to plat the meadow. But we have not resolved that yet.”

Story first appeared in:

STEAMBOAT SPRINGS

Fifteen years ago, Jennifer and Adam Fernley came across an abandoned hilltop cabin for sale in the northwestern Colorado community of Stagecoach. 

Overrun with mice and other rodents, the house had been flooded by frozen pipes.

But the couple knew immediately they’d found their slice of paradise.

A house painter by trade, Adam took on the work of repair.

With sweeping mountain views across the rural corner of southern Routt County, the cabin sits on a 1-acre lot surrounded by scrub oak trees.

The only sound that can be heard from the back deck is the chirping of birds.

The Fernleys have raised their daughters in the house and don’t plan to ever leave.

The girls, now 12 and 16, say they also want to stay in the house forever. 

But right now the whole family is worried about their future as an Arizona-based operator with 35 private resorts worldwide moves ahead with a proposal to turn a large portion of their community into Stagecoach Mountain Ranch, a lavish members-only ski and golf resort similar to the Yellowstone Club in Big Sky, Montana.

“The whole thing is so overwhelming it keeps me up at night,” Adam said.

The Fernleys live across the road from the deserted Stagecoach ski area, about 15 miles south of Steamboat Ski Resort. With a vertical drop of 2,400 feet, it operated with three lifts from 1972 to 1974, when the owners, the Woodmoor Corporation, declared bankruptcy before completing a plan to build 16 subdivisions, a golf course, equestrian center and marina on Stagecoach Reservoir.  The new developer, Discovery Land Company, plans to build 700 luxury homes with exclusive access to skiing, golfing and fly fishing on the Yampa River.

Environmental concerns

Retired ecology professor Bob Woodmansee lives just down the road from the Fernleys. He recently wrote a methodical “manifesto” in opposition to the proposed development in the community where he and his wife have lived for 19 years. 

Woodmansee, a professor emeritus at Colorado State University’s Colorado Water Center, has nearly 60 years of teaching and research in ecosystem science and sustainability.

He also served as a Routt County planning commissioner and on the board of the Upper Yampa Water Conservancy District, which manages the Stagecoach Reservoir, the large lake to the north of Discovery’s planned resort.

“Biologically and ecologically it could be a disaster,” he said.

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Woodmansee’s ire is focused on the plan for a lakefront golf course. 

“Stagecoach Reservoir is already listed as an ‘imperiled’ waterbody for water quality by state and federal agencies,” Woodmansee writes in his paper, which is being circulated around the neighborhood and being used to bolster opposition. 

Before the developer even begins its plan to use nutrient-rich treated wastewater to irrigate the golf course, Woodmansee said the ripping out and organic decomposition of the sagebrush ecosystem during construction will release large amounts of nutrients into the lake, which could lead to toxic algal blooms.

Woodmansee is 82 and recently diagnosed with heart problems. He doubts he will live to see the resort built if it is approved by Routt County. But that won’t stop him from fighting it now. 

“I look at this battle as my last swan song,” he said. 

Room enough for the rich

Stagecoach has been growing and attracting more wealth — a trend only accelerated by the pandemic. It is a “targeted growth area” in the 2022 Routt County Master Plan. Two other new subdivisions, northwest of where Discovery hopes to build, are currently in the planning process.

But the exclusivity around the Discovery proposal feels to many Stagecoach residents like they are confronting an entirely different degree of development. 

Stagecoach Mountain Ranch will be similar to the Discovery-managed Yellowstone Club, where members include Tom Brady, Bill Gates and Justin Timberlake. 

The whole thing is so overwhelming it keeps me up at night.

— Adam Fernley, Stagecoach resident

The Yellowstone Club is a self-contained haven where 864 members and their guests never carry their skis or wait in lift lines, always have fresh powder (the club trademarked the phrase “private powder” at the 2,700-acre ski area in 2006) and pay a $400,000 initiation fee to move into the neighborhood and $60,000 in annual dues. That’s after they purchase a home — the low end being $6 million for a one-bedroom condo. 

In his 2020 book “Billionaire Wilderness: The Ultra-Wealthy and the Remaking of the American West,” Yale professor Justin Farrell writes that “the Yellowstone Club represents the pinnacle, or inevitable telos, of the trajectory of extreme wealth concentration in the United States.”

Farrell focuses his book on the staggering collective wealth — and wealth gap — in the Wyoming county that includes Jackson Hole ski area, a 175-mile drive south of the Yellowstone Club, where 90% of income is made by 8% of households.

As to why extreme wealth has a rapidly increasing presence in the Mountain West, Farrell writes, “Burdened by social stigmas, status anxiety and feelings of inauthenticity or guilt, the ultra-wealthy use nature and rural people as a vehicle for personal transformation, creating versions of themselves they view as more authentic, virtuous and community-minded.”

Selling a “family-friendly and outdoor-forward lifestyle in a beautiful natural setting,” the Yellowstone Club maintains a high demand for membership, according to Ed Divita, a founding member of The Discovery Land Co.

“People are our highest focus,” Divita said in a July 19 phone interview, and that includes club members, employees and the surrounding community. He also touted philanthropic contributions to surrounding communities from Discovery club members across the globe.

And, it is a “top priority” for Discovery to not only be environmentally sensitive but environmentally beneficial, he said.

“A Faustian bargain”

The Stagecoach Mountain Ranch plan calls for close to 700 luxury homes on about 6,600 acres, which includes the ski mountain and golf course. Discovery has also acquired a slice of property with prime fishing on the Yampa River.

Divita said in the interview that 700 homes will have far less of an impact than the plans dating back to the early 1970s envisioning a maximum build out of 4,500 dwelling units.

According to the Stagecoach Community Plan, created by Routt County in 2017, there are currently over 2,388 platted single and multifamily lots within Stagecoach, of which 1,802 remain vacant.

Discovery owns the fly-fishing parcel of land and the golf course site, and Divita said the plan is to acquire the ski mountain parcel “in stages,” adding four new lifts, a gondola and high-end ski lodges and dining amenities. 

Membership fees for Stagecoach have not yet been determined, Divita said, when asked at a July 8 introductory meeting with community members at the Oak Creek Fire Protection District’s Stagecoach Station. “But it is going to be expensive,” he said.  

Divita insisted Discovery is not planning to build another Yellowstone Club, and that Stagecoach Mountain Ranch would reflect the area’s unique character.

Eli Nycamp is president of the Stagecoach Property Owners Association, which represents 2,400 lot-owners and about 1,200 residents living on close to 600 developed lots. Some are second-home owners.

“There are a lot of mixed feelings,” he said. “Some love it, some don’t and some are in-between.” 

Nycamp said it is disappointing the mountain wouldn’t be public, but notes the private land has long been zoned as a ski area, with plans for a golf course.

Benefits of the new resort could include much-needed upgrades to roads and other infrastructure, including increasing the capacity of the Morrison Creek Water and Sanitation District, Nycamp said. Those upgrades would need to happen on the front end, he said.

The “failed development” of the 1970s that Nycamp described left many owners with stranded lots, with no roads to reach their property and no access to water, sewer and electric service.

In 1978, the abandoned ski area was purchased out of bankruptcy court by the Wittemyers, a multigenerational Steamboat family well-established in the real estate brokerage business. 

They are taking something that is established and completely changing it. They are going to change the very fabric of what Stagecoach is.

— Jennifer Fernley, Stagecoach resident

There were a number of attempts by the Wittemyers over the past 50 years to revive the ski mountain — and keep it public — but nothing came to fruition.  

In the fall of 2022, the Wittemyers approached the Discovery Land Co. about a possible partnership, Divita told the crowd of nearly 300 people packed into the firehouse July 8, with some attendees listening through the windows from outside.

“We want to be members of the community just like you,” Divita said.  “We want to be a contributing member. We want to make the place better.”

The company wants to preserve for its members the same things the current residents love about their neighborhood, he said. 

“We love the fact there are authentic rodeos here,” Divita said. “We love that authenticity.”

Divita listed the economic benefits and amenities the developers hope to bring to the community: a large increase in property tax revenue, better schools, improved roads and infrastructure, good jobs and the construction of housing that is affordable to the estimated 300 full-time and 600 part-time employees needed to run the luxury resort (once fully developed), as well as to local teachers and firefighters.

“We want to do even more,” Divita said.

He described a 12-acre parcel dedicated as a “community gathering place,” with a sledding hill, trailhead, grocery store, gas station and 140 workforce housing units. Currently, the nearest store is 7 miles away in Oak Creek.

But 16-year-old Hazel Fernley said she was suspicious of all the promises. “They think we need help having a better life here and we don’t.”

Neighbors being asked to trade the laid-back, rural character of their community for tax revenue and improved infrastructure, Woodmansee said, “feels like a Faustian bargain.”

Private skiing with slopeside neighbors

Divita estimated the new resort would take a minimum of 15 years to complete, and could take 30 years to “get to the final finish line. … We are not looking at coming in and selling a few homes and leaving. We are here forever.” 

He said Discovery plans to submit its application to the county in August. 

In contrast to when the Yellowstone Club was built in 1997 by lumber baron Tim Blixseth, Stagecoach has existing subdivisions and condominium complexes at the edge of the ski area, as well as in between the proposed lakeside golf resort and ski mountain. 

“They are taking something that is established and completely changing it,” Jennifer Fernley said. “They are going to change the very fabric of what Stagecoach is.”

Hundreds of residents will find themselves sandwiched in by a ski area they will never be allowed to ski and a golf course on which they will never be able to golf.

Josh Cook has lived in the Stagecoach Townhouses for the past decade, previously serving as HOA president. The 15 mismatched buildings in his complex — each with six units — are tucked into a dense grove of Aspen trees on the mountainside overlooking the lake.

Cook, a photographer, lives in a building with a firefighter, a nurse, a sheriff’s deputy and a retired couple. 

The ski resort property surrounds the cluster of condos on three sides.

“We are a little black circle in the middle of their grand plan,” Cook said. Part of the parking lot near Cook’s building is actually on ski resort property.

The townhouses, along with the nearby Eagle’s Nest condos (known locally as the “chicken coops”) were built 50 years ago in anticipation of the ski resort that never was.

One building sits right along a ski run that empties onto the mountain’s base area.

Cook questions the integration of the townhouses and their residents given their proximity. He also hopes the Stagecoach community will not be sacrificed for money for the rest of the county.

“I don’t think millionaires want to ski by our 1970s townhouses and see us on the porch,” he mused. 

Neighbors at the meeting expressed concern about getting priced out of the community, worried their property taxes would rise so high they’d have to move. But Cook thinks the development’s impact on the market is unpredictable. “Not everyone wants to live in the shadow of billionaires,” he said.

Divita said “good planning” will provide appropriate landscape buffers and setbacks between existing homes and resort properties. 

Other concerns expressed at the meeting included public access to the ski area, fire risk, water, wildlife, the viability of finding and housing 600 employees, traffic, and noise and light pollution. 

Cook debates whether a private ski area is perhaps the “lesser of two evils” when compared to the crowds a public ski area could bring. He also worries the people pleading to Divita for access to the ski area are barking up the wrong tree. What Discovery sells is exclusivity, Cook said.

“An unavoidable impact upon the culture of a community”

Routt County Commissioner Tim Corrigan, who has represented the southern part of the county for 12 years, said it is too soon to assess whether Stagecoach Mountain Ranch would bring overall benefit to the community. 

“I would need to see the application before I could render a judgment,” Corrigan said in an interview this month. “It’s going to be a really subjective thing for most people in the community to determine whether the direct public benefits in total result in an overall net benefit to the community. For any similar community that sees this kind of real estate development, there is an unavoidable impact upon the culture of the community. And land use regulations are not very well equipped to address the cultural impact.” 

Jennifer Fernley said she accepts the ski mountain is private property and the owners have their rights to develop, but she hoped a future use would be more in tune with the values of the existing community.

“It’s going to ruin the character of Stagecoach,” she said.

Adam Fernley always hoped for a “mom-and-pop operation.”

Frances Fernley, 12, said she was most concerned about wildlife. “They don’t have as much room as they used to,” she said. “And we have to speak for them since they can’t speak for themselves.” 

The Fernleys described elk, deer, moose, bears, mountain lions, eagles and other wildlife roaming on and around the densely forested mountain.

“There are very real concerns around wildlife,” Corrigan said, including the Columbian sharp-tailed grouse, a state species of special concern because of its shrinking sagebrush habitat. “It’s unclear to me how the developers will mitigate those impacts.”

On water supply, Corrigan said he defers to the water providers and their claim there is sufficient supply. 

After increasing capacity, the local water district has said it may be able to supply water for domestic use, and the Upper Yampa Conservancy District has said it is possible the reservoir could be used for irrigation and snowmaking.

All those details will have to be worked out during the application process, said Andy Rossi, general manager of the Upper Yampa Water Conservancy District. 

They think we need help having a better life here and we don’t.

— Hazel Fernley, age 16

Rancher Peter Flint questions the water-supply wisdom of building such a massive luxury operation. The Yampa River is over-appropriated and states are battling over the Colorado River, he said. 

The Yampa is a tributary of the Green River and a significant part of the Colorado River system. It is one of the few free-flowing rivers in the West. 

“Now they will be telling me — with 150-year-old water rights — that I can sit and watch my hay field burn up while they water a golf course,” said Flint, who was a Routt County planning commissioner when the Stagecoach Community Plan was developed in 2017.

Flint worries that by using treated wastewater to irrigate the golf course rather than returning it to its source will tighten the supply in the Yampa.

On the stretch of the Yampa River spanning from its headwaters in the Flat Tops Wilderness to the Stagecoach Reservoir, Flint said a “call” was placed on the river several weeks ago, meaning there is not enough administered water to satisfy all decreed water users’ rights. He said it goes on call every year, it is just a matter of when.

The main stretch of the Yampa River below the reservoir went on call for the first time in history in 2018, and again in 2020.

In terms of water quality, Corrigan said, “I do think there are big questions. And I do believe Routt County has some oversight and authority to ensure water quality is maintained.”

Environmental impacts from Discovery Land Co. resorts

A number of Discovery-operated resorts across the world are in the crosshairs of concerned environmentalists.

In 2016, a pipe froze and broke, instantly dumping about 30 million gallons of treated sewage from a Yellowstone Club holding pond into the Gallatin River southwest of Big Sky, Montana. 

In 2023, the Yellowstone Club was sued by the Cottonwood Environmental Law Center, alleging the company has been “knowingly discharging its treated sewage directly into the South Fork West Fork of the Gallatin River without a permit.”

A trial is scheduled for 2026. 

On Sept. 4, 2023, Yvon Chouinard, a conservationist and founder of the outdoor gear company Patagonia, issued a statement in support of the Cottonwood lawsuit, warning that “mindless consumption is killing our planet.” 

“Patagonia believes that clean water is more important than vacation homes and golfing,” Chouinard wrote.

Asked in an email interview about the 2023 lawsuit, Divita referred to the broken pipe in 2016 and said it had been resolved. “The river system is healthy.”

Cottonwood is also pursuing litigation against the Yellowstone Club over alleged pollution from the use of treated wastewater in snowmaking, concerned in particular about untreated pharmaceuticals and PFAs in the water. 

Thomas Goreau, president of the Global Coral Reef Alliance, published a before and after study in 2020 evaluating coral reef ecosystems and fisheries in the Bahamas next to Discovery Land’s Bakers Bay Club. His work concluded that nitrate flowing through groundwater near the club “destroyed the ecological function of pristine Bahamian coral reefs, mangroves, and sea grasses that were crucial and essential nursery habitat for lobsters, conch, and fishes, devastating the fisheries resources of a community that had lived from them since the 1700s.”

Goreau said he found it “unconscionable” that anyone would be allowed to build a new golf course next to an already impaired body of water like Stagecoach Reservoir in Colorado. 

“I can’t believe they are proposing this in a water catchment area,” he said. “That to me is astonishing. … It’s antithetical to the purpose of a reservoir. I can’t believe they are even considering it.”

Divita insists that environmental stewardship is one of Discovery’s core values. “We are continually evaluating the best practices to reduce environmental impacts to ensure these incredible locations are protected for generations to come,” he wrote in an email.

Discovery must show the development won’t negatively impact the Stagecoach Reservoir, the Upper Yampa Water Conservancy District’s Rossi said. The application review process will be a long one, he said, with plenty of opportunity for public engagement. 

Though no application has been submitted, and no decisions have been made, there is a feeling of inevitably hanging over Stagecoach, some residents say. But Corrigan, the county commissioner, said approval of Stagecoach Mountain Ranch is not a sure thing at this point. (Steamboat Springs councilman Michael Buccino earlier this month announced he was resigning from his community relations job at Discovery Land Company after fellow council members expressed concerns about his role with the company could be seen as a conflict of interest.)

“Any approval will be based upon the assessment of whatever the application contains or does not contain,” he said. “We’re going to consider the application on the merits and how it adheres to the master plan and uniform development code.”

“And,” he said, “I totally understand why people are fearful of this development.”

In a roundtable Friday with Federal Trade Commission Chair Lina Khan, Colorado Attorney General Phil Weiser pledged to work closely with federal investigators to crack down on “abusive and predatory practices” by corporate landlords — a sign that housing may soon become a larger focus for the state’s top enforcer of consumer protection laws.

“We need to get the word out,” Weiser said. “The goal is, if landlords know there will be consequences for them failing to follow the law, they’re going to be more motivated to follow the law.”

Khan and Weiser met with renters and legal advocates at the Community Economic Defense Project at their North Capitol Hill office in Denver, where tenants shared stories of rising rental fees, deteriorating living conditions and feelings of helplessness when they had nowhere to turn for assistance.

“A big pain point that we’ve been hearing about for some time now is potentially abusive practices in the housing market, especially for renters,” Khan said at the event.

In her remarks, Khan focused on two areas as top concerns for the FTC: hidden fees and computer algorithms that landlords now use to screen tenants and set the price of rent.

Renters reported a rise in mandatory maintenance fees that aren’t always spelled out in their lease, allowing landlords to raise them at any time. Some said their landlords no longer take checks or money orders, requiring tenants to pay instead through phone apps and web portals that charge processing fees just to pay the rent. Over the course of a 12-month lease, those fees can add up to hundreds or even thousands of dollars.

Advocates say the payment portals are particularly challenging for low-income residents and immigrants who are less likely to have a bank that can process online withdrawals without an additional charge.

Khan said she’d heard of companies charging for basics like trash pickup that used to be included in people’s base rent, calling it “a bait and switch” that prevents renters from knowing how much they actually owe for housing.

Under Khan, the FTC — which enforces federal competition and consumer protection laws — has taken a tougher stance on antitrust laws, supporting lawsuits against tech giants like Amazon and Google, as well as joining Colorado in opposing the proposed merger of grocery chains Kroger and Albertsons.

Khan’s visit — her second to Colorado since her appointment by the Biden administration in 2021 — came a day after the grocery stores announced a pause on their merger in the face of antitrust challenges from Colorado and the FTC, who argue it would decrease competition and hurt consumers.

Her aggressive approach at the FTC has won her praise from those critical of corporate power, both on the progressive left and the populist right. But she faces an uncertain political future, no matter which party wins the White House. Most Republicans oppose her, and a major Democratic donor this week called for Vice President Kamala Harris to replace Khan as chair if she’s elected president.

The focus of Friday’s event was housing — but Khan said there are antitrust concerns in the rental market, too.

Lawsuits have been brought in a number of states against housing data firms RealPage and Yardi, both by tenants and state attorneys general who argue that their software enables competitors to conspire to drive up the price of rent.

“So when you have different landlords all using the same algorithm to set rents, that could be facilitating higher prices in a way that could potentially violate the antitrust laws,” Khan said. “Collusion through an algorithm is still collusion and should be treated that way.”

The companies, and the landlords who use their software, have denied the claims.

“RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people,” RealPage CEO Dana Jones said in a statement posted to the company’s website last month. “Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.”

A number of landlords named in the lawsuits manage properties in Colorado, as well. But the state has not taken any action on the issue, and a Democratic-led bill to prohibit the use of such algorithms to set rent was gutted in the state Senate this year amid opposition from landlord groups.On Friday, Weiser said that his office “is open to hearing more about” potential collusion via algorithm, and pledged further scrutiny on landlord business practices through his office’s newly created Civil Rights Unit.

Colorado residential property values jumped 26.9% statewide in 2023, with many counties reporting much higher surges.

Under Colorado law, properties in the state must be revalued every two years. The most recent revaluation occurred between Jan. 1, 2021, and June 30, 2022.

In that time, Douglas County reported a median residential valuation rise of 47%. Arapahoe County reported a 42% jump. The city and county of Broomfield saw a 41%. Larimer County’s values surged 40%. Adams County reported a jump of 38%. Jefferson County’s values soared 36.5%. Boulder County experienced a 35% rise.

The repeal of the Gallagher Amendment in 2020 was partly to blame for the double-digit increase in valuations seen across the Metro Denver area. The amendment limited how much property assessments — and therefore property taxes — could rise. The repeal was driven by state and local governments struggling with huge deficits that originated during the pandemic.

This fact brief is responsive to conversations such as this one.See full source list below.

Federal judges have dismissed two lawsuits filed by property owners in Summit County challenging recent regulations on short-term rentals from the county and the town of Breckenridge. 

A coalition of more than 100 property owners in Summit County in September sued in federal court in Grand Junction, calling county rules that limit short-term rental property owners to 35 bookings a year and imposing a 2% tax “a blunderbuss response” of “successively more severe, wide-ranging, misguided and unlawful regulations.”

In October, residents and property owners in Breckenridge filed a lawsuit in federal court in Denver, arguing a new cap of 2,200 short-term rental licenses was a form of rent control prohibited by state law. 

The short-term rental business was born in Summit County in the 1990s when entrepreneur David Clouse built a website and started renting nights in his Breckenridge condo. Today the county is ground-zero for a local government crackdown on vacation rentals, with new regulations, caps and taxes designed to hobble short-term rentals as locals scramble to find housing. Summit County is also a hotbed for homeowners irked by recent regulation of short-term rentals.

The Colorado Property Owners for Property Rights group also argued that the town’s 2021 and 2022 ordinances that created zones that allowed for varying levels of short-term rentals were “arbitrary and irrational, discriminatory, lacking support from study or data, (and) there is no reasonable relation between the ordinances and the town’s stated objective of providing employee housing, and ultimately, unlawful.”

U.S. District Court Judge Nina Wang on July 9 dismissed the Breckenridge property owners’ lawsuit, ruling the town’s limits on short-term rentals “are at least rationally related to controlling associated noise, parking and waste disposal” and that the town’s “desire to limit the perceived ill effects of STRs is a legitimate purpose and the ordinances are rationally related to this end.”

“Second-guessing by a court is not allowed,” Wang wrote, citing legal precedent.

U.S. District Court Judge Gordon Gallagher on June 25 dismissed the county owners’ lawsuit, ruling that Summit County is allowed to treat properties in various zones differently, including occupancy requirements for obtaining short-term rental licenses. Gallagher also dismissed the owners’ challenge to a county limit of 35 bookings a year — which the owners argued violated their property rights — ruling that owners’ failed to prove they have a fundamental right to a short-term rental license.  

Both judges dismissed the notion that the regulations created different rules for Colorado residents and nonresidents. The property owners in both lawsuits argued the recent crackdown on short-term rentals by county and town policymakers violated the equal protection clause in the U.S. Constitution’s 14th Amendment, which prevents local laws that discriminate between U.S. residents. 

Gallagher wrote in his June 25 ruling that the court was “aware of the significant consequences” of Summit County’s short-term rental regulations and his ruling for property owners, residents and visitors to Summit County “and perhaps in similar communities across Colorado.”

The property owners had attended local meetings and united residents and other owners in a political process challenging the county’s regulations, Gallagher wrote, noting that “their grievances, concerns, and the potential financial repercussions of the ordinance are valid.”

“It is important to clearly denote the role of this court, which does not include second-guessing the legislative process or creating policy,” Gallagher wrote, ruling the court’s role is to “determine the constitutionality and legality of the ordinance — nothing more and nothing less.”

Todd Ruelle, a Summit County homeowner and member of the Summit County Resort Homes Inc. nonprofit group that sued the county, said the homeowners disagree with Gallagher’s ruling and they are “considering potential next steps” before a late-July deadline for an appeal. 

Gallagher cited a 1926 decision by the U.S. Supreme Court that declined to interfere with local policymakers who have proven reasons for adopting rules.

“We have nothing to do with the question of the wisdom or good policy of municipal ordinances,” the Supreme Court ruled in its 1926 decision in the Village of Euclid v Ambler Realty Co. “If they are not satisfying to a majority of the citizens, their recourse is to the ballot — not the courts.”

The number of nights booked in short-term rental homes has climbed faster than the number of listings over the past four winters in Aspen, Breckenridge, Crested Butte, Steamboat Springs, Telluride and Vail, according to Key Data and Avantio, a property management software company with  clients in Colorado’s resort communities. And owners are collecting much higher payments from visitors.

• In and around Aspen, the number of active listings in the winter of 2023-24 — 1,705 — was down from 1,941 in 2020-21, while the number of nights booked in Aspen short-term rental homes reached 60,240 in 2023-24, up from 45,241 in 2020-21. The average daily room night in Aspen’s short-term rentals in 2023-24 was more than $850, a 94% increase from 2020-21. 
• In and around Breckenridge, the number of active listings in 2023-24 — 8,174 — was up from 7,448 in 2020-21, while the number of nights booked climbed to 480,061 in the winter of 2023-24, up from 294,553 in 2020-21. The average daily rate in Breckenridge last winter topped $500, up 20% from four winters ago. 

• In and around Crested Butte, the number of active listings in 2023-24 —  519 — was up from 439 in 2020-21, while the number of nights booked in Crested Butte short-term rentals in 2023-24 reached 23,661, up from 19,702 four winters ago. The average rate for a Crested Butte short-term rental last winter was $506, up 22% from 2020-21.
• In and around Steamboat Springs, the number of active listings in 2023-24 — 5,786 — was up from 4,875 in 2020-21, while the number of nights booked in Steamboat short-term rentals in 2023-24 reached 300,543, more than twice the number of bookings in 2020-21. The average rate for a Steamboat short-term rental last winter was $620, up 42% from four winters ago.
• In and around Telluride, the number of active listings in 2023-24 — 1,198 — was up slightly from 1,103 in 2020-21, while the number of nights booked in 2023-24 reached 60,802, up from 40,027 in 2020-21. The average rate for Telluride short-term rental last winter was $680, up 42% from 2020-21.
• In and around Vail, the number of active listings in 2023-24 was 4,003, up from 3,840 in 2020-21, while the number of nights booked in 2023-24 was 198,772, up from 137,797 in 2020-21. The average night in a Vail short-term rental was $939 in 2023-24, up 53% from 2020-21.

The Western Mountain Resort Alliance, a collection of real estate broker associations in Western U.S. mountain communities, studied short-term rentals in Summit County in 2023. The alliance found that roughly 80% of the county’s lodging units are short-term rental homes and guests in those units support 7,700 workers who earn $416 million a year. Spending by short-term rental guests generates a $1.7 billion in annual economic impact in Summit County. (It’s important to note that real estate brokers have a financial interest in protecting short-term rentals that are big parts of mountain town real estate markets. Selling homes to buyers who will be off-setting costs with short-term rental revenues is a big part of the mountain market.)

The alliance’s study of short-term rentals in Pitkin and Summit counties and Teton County in Wyoming and their economic impact — which was published in March — showed revenues from taxes on vacation properties delivered record sums to affordable housing efforts. The alliance studies also showed home prices soaring while the number of short-term rentals remained relatively steady. 

“Massive socioeconomic shifts related to the pandemic, strong national economy, western migration and demographic trends have played a larger role in driving housing prices than the presence of STRs in any given market,” reads the alliance’s report. “If STRs are banned, the housing supply would likely not increase measurably.”

Toby Babich, who manages several dozen vacation rentals in Summit County, said his visitors and owners are crucial contributors to the county’s economy. 

“I think that the second homeowner community, the majority being Colorado residents, held a hope that their rights would be protected by a competent court, and at the very least their arguments would be heard,” Babich said. “The dismissal is a disappointment to the Colorado tourism industry, the vacation rental industry, and an affront to thousands of Colorado property owners who deserve protection from the incessant overreaching arm of local government always in search of more control and revenue.”

In 2022, the state of Colorado loaned a housing developer $640,000 to buy the Parachute Inn — a condemned hotel on the Western Slope that the buyer planned to convert into low-income apartments.

Local governments are chipping in too, with property tax breaks and fee waivers. And last week, the state Housing Board gave the development another boost — a $5 million loan to help build 50 affordable units with construction starting as soon as this year.

But in the intervening years, the project’s focus on lower-income workers vanished. Instead, many of the units will be rented out to the middle class.

In a major policy shift, Colorado state lawmakers have begun steering public dollars to affordable housing projects aimed at families who make as much as $170,000 per year, redirecting aid that has historically gone to the working poor.

The move, which began in the wake of the pandemic, upends a century of affordable housing norms as policymakers grapple with how to combat an affordability crisis that has spread well beyond the low-income households that traditionally qualify for taxpayer-subsidized housing.

In response, state lawmakers have steadily expanded who can get help from state affordable housing grants and loans, like the ones used in Parachute. In 2023, they passed a bill allowing mountain resort communities to petition to spend Proposition 123 affordable housing dollars on higher income levels. That overrides the limits approved by voters when the ballot measure, which sets aside state income tax dollars for housing projects, passed just months earlier.

This legislative session, lawmakers went a step further, setting aside $200 million over the next decade to create the nation’s first middle-income housing tax credit — a middle-class version of the state and federal tax credits for low-income housing.

The new tax credit passed with unanimous support from progressive and moderate Democrats alike, plus a few votes from Republicans — a sign of just how potent a political issue the middle-class housing problem has become.

“We can work on housing affordability for low-income Coloradans and middle-income Coloradans at the same time,” said Sen. Jeff Bridges, a Greenwood Village Democrat. “To say that we have to be one or the other is a false choice. And I know it’s a false choice because we’re doing both and we’re going to keep doing both.”

But the state’s broader shift toward subsidizing middle-class rentals has been met with trepidation from low-income housing groups, some of whom have bitterly opposed similar legislation at the federal level.

“It’s a really wasteful use of limited dollars, and it’s going to have a negligible effect on the underlying causes of the housing prices in Colorado,” said Sarah Saadian, who oversees public policy for the nonprofit National Low Income Housing Coalition. “It’s going to do very little to help those who are struggling the most.”

The need seems unlimited. Resources aren’t.

In the wake of the pandemic, a few of Colorado’s most desirable mountain communities crossed a startling threshold.

Not only can people making less than $100,000 no longer buy a home in Summit and Routt counties, they can’t even afford to rent the average apartment, according to Colorado Housing and Finance Authority data.

“You can be a doctor in a ski town and still not be able to afford housing in that ski town,” said Bridges, who sponsored the legislation creating the middle-income housing tax credit, House Bill 1316. “Because you’re competing against the richest people in the world who want to come enjoy the greatest mountains in the world.”

As median home prices in some counties push north of $1 million, prospective homebuyers now have to make close to $600,000 to afford the median home in parts of the mountains. That pushes higher earners into the rental market, driving up costs for middle-income workers in essential professions, like nurses, teachers and government administrators.

“There’s a sort of saying in Summit County that you get to live here if you work in a restaurant, for example, if you’re a server or if you’re cleaning houses,” said Tamara Pogue, a Summit County commissioner. “But the second you become a teacher, you have to move to a surrounding county.”

At the same time, paying rent hasn’t gotten any easier for those at lower rungs of the income ladder. Homelessness and eviction filings are at record levels. Rent has stayed on an upward climb even as inflation cools.

While middle earners may struggle to afford an apartment in the state’s most expensive resort towns, workers who make less than the median wage face far greater challenges. In the 11 counties that make up the Denver metro area, there are only three left — Elbert, Gilpin and Clear Creek — where someone making less than $60,000 can afford the median apartment without financial strain, according to CHFA data.

Kinsey Hasstedt, the director of state and local policy for Enterprise Community Partners, a nonprofit affordable housing developer, says it’s important to remember why the government subsidizes low-income housing in the first place. The free market simply won’t build it without taxpayer help.

“Affordable housing for decades has really been focused on serving people living on lower and fixed incomes, because the market is not set up to do it otherwise and will not do it otherwise,” Hasstedt said.

When developers partner with the government to build affordable housing projects, they agree to rent them only to people who make a certain level of income — typically less than 60% or 80% of the median income in their area. The public subsidy pays for the difference between the market rent the landlord would have otherwise charged and the rent considered affordable to those tenants.

The largest source of such housing by far is the federal government. In recent years the state has upped its own contributions. It’s still far from enough.

For every 100 households in the Denver metro area, there are just 91 affordable units available to those making less than 80% of the median income, or about $90,000 for a family of three in Denver. At 50% of the median income, there are just 44 affordable homes for every 100 households.

“When we pull public funds to serve higher income households, we are taking away funds that could serve lower income households,” Hasstedt said. “That feels like it stands to exacerbate inequities.”

Even in mountain communities where those making middle-income salaries face the worst housing burdens, the situation is far worse the less you make.

The CHFA data shows that in mountain communities, 69% of renters who make less than 60% of the median income are considered rent burdened, meaning they pay more than 30% of their income on rent. Less than 10% of those who make above the median income are rent burdened.

But new state laws are allowing public dollars to be spent on renters making as much as 140% of their area median.

Saadian, with the National Low Income Housing Coalition, says this illustrates that politicians are responding to middle-class constituents who vote in higher numbers rather than those with the highest need.

“It’s important that we see this for what it is,” she said. “This is about politics, not about actually solving the housing crisis.”

Supporters see it differently. As the cost of land and construction soars, the fundamental case for low-income units now applies to middle-income housing in some parts of the state. The market simply won’t build it otherwise.

“For us to be able to stand up a school district, a hospital, law enforcement, public services, government — we have got to have housing for the working local,” said House Speaker Julie McCluskie, a Democrat from Dillon, who has pushed to loosen income restrictions for affordable housing in resort towns like hers.

“And while I absolutely agree, funding needs to go to those with the greatest need, when you’re looking at the continuum of housing and what you need to provide for all levels of your workforce, our needs are fairly significant.”

Serving the workforce

When lawmakers insist mountain communities need flexibility in setting income limits, the Parachute Inn is just the sort of project they have in mind.

A town of about 1,400 people, Parachute sits along Interstate 70 in southern Garfield County.

The developer, Grady Lenkin with Headwaters Housing Partners, told The Colorado Sun that he initially set out to build a low-income housing project. But after months of talking with community leaders, residents and employers, he changed course.

“What everybody said to us was, please make this a project that serves the workforce of the town,” Lenkin said. “You know, the manager of the new Love’s gas station, or the assistant police chief or assistant superintendent or the teacher.”

Lenkin says he still plans to partner with the local housing authority to provide some vouchers for low-income workers. But the development will now allow renters making up to 100% of the area median income, up from 30% to 60% in his original plans.

It’s the sort of project a functioning housing market should be able to provide without government help.

But “a number of local bankers who I spoke with, they just didn’t want to touch Parachute,” he said, pointing to a stigma that lingers decades after an oil and gas bust gutted the region’s economy. “As part of my application to the (state) Division of Housing, I submitted a stack of rejection letters just saying, ‘No, we’re not going to lend in Parachute.’”

While some of Parachute’s housing challenges are unique to Garfield County, the broader story could be told up and down the Rocky Mountains. The rise of remote work has allowed more people to live in Colorado’s most picturesque locations. And there aren’t enough homes to fit them all.

“You only need to add a really small number of people who want to be in the region to break the housing market — and that happened,” Lenkin said.

When you zoom out from Parachute, low-income housing advocates say a different picture emerges. Study after study confirms there is indeed a growing need for middle-income housing in some communities. But at the regional level, it is dwarfed by the need for lower income units.

A 2019 study of the Greater Roaring Fork region, which stretches from Parachute to Aspen and Eagle County, estimated the area will face a shortage of 5,000 units by 2027 for those making less than 60% of their area median income. The region is expected to need 590 more homes for those making 80% to 100% of AMI, and 1,100 for those making more than the median.

“People earning middle incomes are experiencing housing cost burdens — no doubt. It’s starting to creep up that ladder,” Hasstedt said. “But that doesn’t mean that people living on less aren’t experiencing the same or worse.”

Earlier this year, Chaffee County, home to Salida in Colorado’s high country, became one of the first local governments to petition the state to waive the income limits for affordable housing under Proposition 123, seeking to use state dollars for people making up to 120% of the median income. In Chaffee, that’s around $73,000 for an individual or $94,000 for a family of three.

The county’s housing study, submitted to the Colorado Department of Local Affairs as part of its application, shows there’s a shortage of 50 units at that income level, underscoring the county’s argument.

But those making less than 60% of the median income — the population voters intended Proposition 123 to serve — face a shortage of 295 homes.

Tracy Ross

Reporter

When it comes to attempting to solve Colorado’s housing crisis, any success story seems worth noting.

So it was fun to learn about a company that has overcome challenges to start getting work done.

Ethan Deffenbaugh and Nick Lemmer own Higher Purpose Homes, a startup construction company that builds houses modeled on a computer and pre-fabricated in a warehouse on the outskirts of Durango.

The idea is to get homes built more quickly, to get more in the market, to increase affordability.

In February, they believed they were on the verge of winning an $8 million grant from the state Office of Economic Development and International Trade to go toward buying land, building a warehouse and starting to chip away at the housing crisis by constructing high-quality homes faster and more efficiently.

Their plan was innovative. Homes could be designed and built with data sent to a machine Lemmer created called a cut station, which pushes lumber into the correct position to create walls, floors and roofs. Workers would then assemble the pisces using a jig designed by Lemmer. The homes could be outfitted with the customer’s chosen finishes and wrapped for transport — all in six to eight weeks.

But they ended up not getting the grant and their future was uncertain. Only for a few days, though.

Because a couple in Durango heard about them after a story appeared in The Colorado Sun and hired them to build a 2,000-square-foot ranch house with three bedrooms and two baths to place on their property with views of the La Plata Mountains.

The couple hired Durango architect Dean Brookie to design the home. Then Higher Purpose got to work framing the shell with materials costing around $21 per square foot and labor in the range of $16.50 a square foot.

Lemmer says the house is rectangular, with giant windows framing soaring views. “It’s got some pretty big decks on there, and some beautiful covered porch areas,” he adds, and the customers seem more than satisfied. They prefer not to be named but in an interview said Lemmer and Deffenbauh’s “work ethic, punctuality, creativity, problem-solving and flexibility provided a quality product in an amazingly short period of time.”

Outside of excavating the site and building a foundation — jobs done by Lazy K dirt work company and Rosso Concrete Company, respectively — that time period was about a month from start to finish. Lemmer says they built the walls over two weeks in the factory, and constructed the roof and floors over one week at the site. “It took couple of days for the crane to come in and lift the roof off of the floor, put the walls up and put the roof back,” he added, “and we had a crew of three: me, Deffenbaugh and our building expert, who’s been a framer for over 15 years now. And then the customer was out there helping, because he was really excited to see it happen.”

As for future projects, they’re currently in talks to prefab a house for a customer in Pueblo. Then they’d like to expand by working with builders and developers who have their own framing crews.

“One of the biggest things right now is finding labor, and so by doing a lot of the labor in a factory setting, we can kind of alleviate the need for the on-site labor,” Lemmer says. “But let’s say a developer has enough labor to frame out a couple houses in a year. By using our method, they should be able to greatly expand that.”

“The concept we’re doing here is we are providing a product that is the same as what everybody’s used to, but eliminating the need for the skilled labor on-site and greatly reducing the time that it takes to get a house framed in,” he adds. “So for developers and builders out there who are struggling to find framing crews and get jobs done, we can provide a majority of the heavy lifting so that framing crews can do more for them and they can rely less on skilled labor to make all of that happen.”

That could help Colorado’s lagging construction market, which some say is slowing in part because there are too few workers.

This week’s report comes from Colorado Sun rural reporter Tracy Ross. If you enjoy her monthly updates on the more rural parts of the state, let her know at tracy@coloradosun.com

Sun economy stories you may have missed

➔ Colorado AG steps into battle over a fence that’s pitted San Luis Valley locals against a billionaire. Attorney General Phil Weiser visited the small town of San Luis to meet with local residents who are trying to stop construction of the wire-grid fence. >> Read story

➔ Southern Ute Indian Tribe sues Colorado governor, gaming division over sports betting. Southern Ute Indian Tribe calls actions by Gov. Jared Polis and the Division of Gaming “bad faith” and “anti-sovereign,” alleging the state seeks to freeze them from the online sports betting market. >> Read story

➔ The Colorado Sun discusses insurance costs, climate change and weather events. Environmental reporter Michael Booth spoke with a panel of experts about how wildfires, hail floods and more are costing Coloradans billions in higher insurance rates. >> Watch

➔ Slaughterhouse ban on Denver ballot targets one 70-year-old business. An animal rights group got a slaughterhouse ban on the November ballot. The head of the state livestock association wants activists to stop messing with agriculture. >> Read story

➔ Xcel should be ordered to get moving on home solar hookups, state regulators and industry groups say. Colorado’s largest utility promised eight months ago to set fees, deadlines, procedures and a connection timeline but has not delivered. >> Read story

➔ Despite 70% opt-out rate, Keep Colorado Wild Passes program delivers more revenue than forecast. Adding a $29 fee to license plate bills sent almost $41 million to Colorado Parks and Wildlife, plus money for avalanche forecasting and search and rescue groups. >> Read story

Other working bits

➔ $311 million paid as Colorado workers tap into state’s paid family leave. Colorado’s Family and Medical Leave Insurance program paid out more than $311 million to fill 62,632 claims in the first half of 2024, according to the Colorado Department of Labor and Employment. The program began paying benefits in January but started a year earlier, as eligible workers — and their employers — contributed a portion of their paycheck to the FAMLI insurance fund. By the end of 2023, the fund had $775 million. The benefits are meant to provide a partial paycheck for workers to care for a new child or a serious family health issue. Some stats, as of July 1:

• 38,510 claims were to take care of personal or family health issues. 
• 32,834 claims were to bond with a new child. 
• The average leave was 53.3 days and the payment was $915.30. 
• More than two-thirds of the workers have already returned to work. 

>> News release; Earlier story

HELP US: Did you benefit from the state’s new family leave program or have employees who did? Tell us more by emailing tamara@coloradosun.com

➔ Colorado home sales sink as active listings increase. June numbers are in and according to the Colorado Association of Realtors called it a “stalemate” between buyers and sellers as the number of houses sold fell 11.6% statewide and median sales price edged up 3.1% to $599,000 compared to a year ago, which is still near all-time highs. The number of houses for sale, or active listings, rose 19% with more than 18,373 for sale last month. “Buying conditions have collapsed to levels seen only twice since 1960. Those years were 1974 and 1980, per Game of Trades reporting. We have also seen multifamily default numbers not seen in a decade,” Patrick Muldoon, a Realtor in the Colorado Springs-area, said in a news release. “Are we entering a corrective phase? It appears many indicators are pointing in that direction.” In metro Denver, home sales fell 8.2% and the median sales price rose 1.1% to $637,000 from a year ago. >> See CAR data: Colorado, Metro Denver

➔ More federal money for Colorado’s apprenticeship program. The U.S. Department of Labor awarded $839,094 “to expand, modernize and diversify” Colorado’s Registered Apprenticeship program, which is overseen by the state’s Department of Labor and Employment. Colorado was one of 46 states to receive a portion of the $39 million in grants to support apprenticeships. >> Awards by state

Section by Tamara Chuang | Business/Technology Reporter

Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww

Thanks for sticking with us for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

Miss a column? Catch up:

• What consumers and businesses need to know about Colorado’s “Do not sell my data” law
• Colorado employers may finally have found enough workers
• How a Denver company is fighting the problem of underemployment
• Why Colorado could start attracting more filmmakers
• New broadband laws to help Colorado streamline distribution of $800+ million
• Nearly 55,000 Coloradans now have a retirement account after law went into effect
• Colorado added a mere 300 jobs in April
• Growing older in Colorado? You’ll be interested in these new laws

What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.

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