Friday, January 25, 2008

Rent VS. Sale

Eric S. Morris and Jeffrey C. Minotto: Rent vs. sale
Sunday, January 20, 2008 Steambot Pilot/TODAY - Viewer Opinion

Steamboat Springs — While reading the article “First day at First Tracks pulls in 45” (Steamboat Today, Jan. 17), we were struck by the statement from Mariana Ishida whereby the list of 45 names for 47 units would have “to grow in leaps.”

First of all, we recognize that this region lacks a sufficient number of affordable residential units that can accommodate the people who provide the vast majority of services or produce the goods for our resort-based economy. Therefore, we commend the leaders, both governmental and private sector, for trying to meet those needs. However, we feel the city’s mandate is misguided because it requires the building of affordable units for sale rather than for rent.

Affordable for-sale projects in Steamboat have had trouble finding enough people to qualify for a mortgage while meeting the maximum income guidelines. The city’s Community Housing Plan needs to be revised so that the majority of affordable residential units are offered for rent rather than for sale. Fifteen percent to 25 percent (to be altered after further market study) of the total planned affordable units should be offered for sale to accommodate people who will most likely stay in the valley long-term, such as teachers and nurses. However, the balance of the units should be offered for rent at below-market rates to accommodate the majority of workers who have demonstrated a history of transience. This plan will reduce the need for long commutes from Hayden and Craig and will allow those workers to become further and more deeply ingrained in the community.

Even though we are dealing in something outside the “free” market, the rules of the market, dictated by supply and demand, still apply. The extended time needed to sell the affordable units in town, either from lack of demand or the inability of most interested parties to qualify, demonstrates that the true market demand is for affordable rentals rather than “forcing” a market that does not exist by offering these affordable units for sale.

Eric S. Morris and Jeffrey C. Minotto