Colorado conundrum: How communities around the state are handling short-term rentals
Steamboat Pilot & Today
Brooke Bobela felt a knot in her stomach when she received the news that her landlord would be selling her apartment complex to another owner who planned to use the building for short-term rentals.
Bobela, of Avon, has lived in Eagle County for eight years and works as a ski instructor at Vail Ski Resort and in various restaurants doing catering and events. Throughout her time in the county, she has bounced between small, 800-square-foot apartments that are advertised for locals seeking reasonably priced housing.
“This is the worker bees, middle-class families and just good people who make this community run,” Bobela said.
After hearing the news that she couldn’t renew her lease, Bobela rushed to housing websites to seek out other options, but page after page brought disappointment. There were just endless ads for nightly rentals, but none for long-term renters.
“I’ve invested a lot into the eight years that I’ve been here, and I don’t want to leave,” Bobela said. “There is a huge chunk of the year where these places just sit vacant, and that’s a tough pill for me to swallow as a person who works here 12 months of the year.”
A ski town crisis
While their approaches vary, resort communities across Colorado, including Summit County, are asking themselves the same question: Are short-term rentals causing a problem, and if so, how can the problem be solved?
“What you hear from a lot of people is that we no longer have neighbors, we now have hotels,” said Wendy Sullivan, principal of WSW Consulting, an organization that studies housing needs in tourism-based towns around the West. “Everyone feels impacts, and they’re not happy about them.”
David Barnett has always loved to snowboard, and after spending most of his life in Missouri, he was thrilled when the opportunity to work at Kidney Center of the Rockies opened up in Avon, as he would be living minutes away from two major ski resorts.
As a dialysis registered nurse, Barnett said he earns a comfortable salary, but the lack of housing in Eagle County made it nearly impossible for him to find an apartment even with his larger budget.
“I love this place. I love my patients. I love my manager. I don’t want to move, but it’s looking like I’m going to have to,” Barnett said. “I can’t imagine I’m the only one going through this.”
Kim Williams, executive director of the Eagle County Housing Authority, said it is difficult to quantify exactly how many short-term rental units are in the county, as Eagle County does not require permits for units in unincorporated parts of the county, though individual towns have many of their own requirements.
Though the data is difficult to measure, Williams said she is confident the county has lost much of its housing stock to nightly rentals, which has forced restaurant workers, lift operators and other service workers out of the area.
“We thought we had a housing crisis back in 2007, and we certainly did, but the difference between then and now is that we definitely have lost a lot of units that were previously for year-round locals to the short-term rental market,” Williams said. “One person who might have rented a bedroom by themselves is now cramming in with two people, and people are living in other counties and commuting.”
Jason Peasley, executive director of the Yampa Valley Housing Authority, said Steamboat Springs is experiencing the same issue, with condos that formerly housed locals now being used for nightly rentals. While Peasley and Williams both emphasized the importance of property rights, the two also said cities have not been able to build housing fast enough to house locals while long-term housing is being converted to nightly rentals at a much faster rate.
“We’re doing a very good job of building new supply, but it’s clearly not keeping up,” Peasley said. “Every time we go to lease up a property, we have more and more people that need and want housing.”
Sarah Bradford, owner of Steamboat Lodging Co., said while renting multimillion-dollar homes to nightly renters is the only option for many who own the homes, those renting condos are not making the same profit and usually opt to rent nightly so they can use their condo whenever they want.
“Guests coming to Steamboat want luxury,” Bradford said. “Short-term renting your place in Shadow Run is not going to make any more money than long-term renting would, but you get to use it whenever you come up. That’s why people do it.”
While short-term rentals have become a topic of debate for many communities, Sullivan said they are one piece of the housing crisis, not the entire problem.
“Getting rid of short-term rentals is not going to be the silver bullet that everyone thinks it is, because it’s not the sole problem,” Sullivan said. “It’s the shiny thing. It’s the obvious thing that’s in people’s faces, so it’s an easy thing to blame, and yes, it absolutely is a contributor, but it’s much more multifaceted than just that.”
Investing in a future
Christopher Volgenau, a Denver resident who owns two short-term rentals in Steamboat, said he bought the two condos in 2017 with hopes of investing in property while owning two units he can use whenever he wants to visit the city.
“I love Steamboat, and if I can run a small business out of Steamboat, and I can spend more time up there, then that’s better,” Volgenau said. “For me, it’s a market I like to be in, but it’s also a market that I think has a lot of potential.”
Volgenau said both of his units, located near the base of Steamboat Resort, were being used as short-term rentals before he bought them, so he feels he is not taking housing stock from what could be used as locals housing.
“I think a lot of those concerns are short sighted,” Volgenau said. “There are a lot of nuances to what’s going on in mountain towns, and it’s easy to point a finger at the short-term rental folks.”
Robbie Shine, a full-time Steamboat resident who works for the city, also rents out two houses, one to short-term vacationers and one to a bartender working full-time in town.
Shine bought both houses as an investment and believes he should find a balance between providing housing for full-time residents and welcoming visitors to town.
“I strongly and truly believe that it is the responsibility of people that live here to make sure that people who work here can also live here,” Shine said. “At the same time, I love to share what Steamboat is, and I love to share our property.”
Shine also chooses to short-term rent one unit now but plans to rent it to a full-time tenant when more of his mortgage is paid off.
“You just can’t ask $1,750 a month from a long-term renter,” Shine said.
The role of the state and county
In 2020, the Colorado legislature passed a bill granting counties the authority to begin licensing short-term rentals in unincorporated areas.
“It’s a very big topic and one that we have talked about at the legislature over the last couple years and one that we’re very much going to continue talking about,” said Rep. Dylan Roberts, the Democrat representing Routt and Eagle counties in the state legislature. “My communities and the communities all across the Western Slope are grappling with this issue very acutely compared to the rest of the state.”
Roberts said he is currently looking at introducing bills that would allow cities and counties to place heavy property taxes on short-term rentals.
“The hope there would be by raising the property tax so significantly, it would incentivize more people to not do short-term rentals and move to a long-term option,” Roberts said. “Any excess revenue that would be gained by increasing the property tax could be used for more affordable housing and development.”
Sen. Kerry Donovan, a Democrat representing Eagle, Pitkin, Chaffee and Delta counties who sits on a statewide affordable housing committee, said much of the committee’s goal is to look at how to balance needs of tourism and affordable housing.
“A lot of these places used to be for rent for young professionals and seasonal workers, and now, they’re just being run as hotel rooms, so how can we address that?” Donovan said. “Should those properties be treated as commercial hotel rooms is something we’re looking at.”
While short-term rentals are technically banned in unincorporated Routt County, a search of Airbnb and VRBO websites shows they are scattered throughout the county.
“At the moment, we just don’t have the resources to actively be looking for short-term rentals,” said Kristy Winser, Routt County planning director.
Winser said the county’s code enforcement protocols are complaint driven, so if staff receive a complaint about an illegal short-term rental unit, they can investigate. But collecting enough evidence to bring to the county attorney is difficult, Winser explained, because short-term renters are usually out and about during the day when code enforcement staff are working.
“We know that they’re out there, but we’re not actively sorting them out at the moment,” Winser said. “Whether or not that changes is up to the county commissioners.”
While Steamboat is enforcing its own set of rules, communities around Colorado have taken different approaches to regulating short-term rentals, ranging from restrictions on where and how many can be located in certain neighborhoods to banning them altogether.
• Do short-term rentals pay specific taxes? Yes, 2.5% sales tax and 3.4% accommodations tax.
• Is a license required? Yes, and it is nontransferable.
• Is there a cap or zone restrictions? Town Council has passed a first reading on a cap. Second reading is set for Sept. 28.
Changes in Breckenridge and Summit County
Tamara Pogue and her fellow Summit County commissioners are trying to be “as surgical as possible” as they discuss if and how to regulate short-term rentals in the county, which is home to three major ski resorts.
“We recognize that the short-term rental industry provides a lot of benefits in terms of the revenue it generates and bringing folks to our community,” Pogue said. “But like any business or industry, there are challenges that that industry presents for a community.”
In unincorporated parts of Summit County, Pogue said one out of every three homes has a short-term rental permit.
“That is posing challenges,” Pogue said. “What we’re trying to do is really maximize the advantages and minimize the disadvantages here.”
The county currently has a 12-week moratorium on applying for short-term rental permits, with Keystone and Copper exempt.
While the county is in a moratorium, the town of Breckenridge unanimously passed the first reading of a cap on short-term rentals Tuesday, Sept. 14.
• Do short-term rentals pay specific taxes? Yes, though the town’s website does not state how much.
• Is a license required? Yes, and it requires a $60 annual fee ad is nontransferable.
• Is there a cap or zone restrictions? No
Winter Park’s solution
Winter Park Mayor Nick Kutrumbos knows short-term rentals drive the local economy, as the town only has a handful of hotels, so most who visit rely on AirBnb and VRBO.
“Without them, we would certainly be in a different place with supporting our businesses,” Kutrumbos said.
Still, Kutrumbos said he believes the increase in visitors coming to town and using short-term rentals has exacerbated the lack of housing the town was already experiencing, particularly for its work force. To try and combat that, the Winter Park Town Council recently passed an incentive program to encourage former short-term rental owners to rent their properties to full-time tenants rather than nightly visitors.
For a one-bedroom unit, the town will give property owners who choose to rent to an employee working at least 35 hours a week in Winter Park or Frasier $5,000 for a six-month lease and $10,000 for a yearlong lease. For a two- or three-bedroom unit, the town will give $10,000 for a six-month lease and $20,000 for a year’s lease.
“The value of these short-term rentals for property owners to be able to utilize them whenever they want is just something we can’t compete with,” Kutrumbos said. “But a dollar amount talks.”
Kutrumbos said the money is coming out of the town’s affordable housing fund, so Town Council and staff members plan to reevaluate the policy after the winter season, but they wanted to get the program off its feet before the town sees an influx of tourists visiting Winter Park Resort.
“We have a major workforce issue with housing prices going up into this winter,” Kutrumbos said, adding very few of the businesses in town are open seven days a week due to a staffing shortage. “This is essentially AirBnb for long-term housing.”
• Do short-term rentals pay specific taxes? Yes, 4% sales tax and 4% lodging tax.
• Is a license required? Yes, and it requires a $60 annual fee and is nontransferable.
• Is there a cap or zone restrictions? Yes, short-term rentals are prohibited in the town’s core district.
Avon, Vail and Eagle County
When Elleya McCombs first moved to Eagle County three years ago to work for Vail Resorts, she faced some inconveniences trying to find housing, but after the COVID-19 pandemic brought new visitors and homeowners to town, the process has become so difficult that McCombs fears she may need to leave the county.
“‘A lot of these long-term condos and apartments that we had a few years ago are just being sold because they can make so much money doing short-term rentals,” McCombs said.
In addition to having trouble finding a place to live, McCombs said she has noticed many of her middle-class neighbors have been priced out of town, while wealthy second-home owners have taken their place.
“I’ve always seen the wealth gap, but I think it has gotten a lot more prominent in the last year,” McCombs said. “I’m kind of appalled.”
Tracy Walters, an Eagle-Vail resident, said in addition to turning long-term units into short-term, residents in the area have expressed complaints about nightly renters creating too much noise, leaving trash bins unlocked and attracting bears, and blocking streets with too many cars.
“When you live in a resort community, people come to have a good time, but the problem is that they’re in the middle of a residential neighborhood,” Walters said. “They’re here to have a good time, and every night is a party because they’re on vacation, but the person next door isn’t on vacation.”
To address some of these concerns, Avon Mayor Eric Heil said the town treats its short-term rentals like businesses — owners have to pay a 4% sales tax and a 4% accommodations tax. Owners also have to obtain a nontransferable license from the town, and the town prohibits such units in its core district.
“In communities like Aspen and Vail and Telluride, there are no affordable places left, and short-term rentals are only a small piece of that puzzle,” Heil said. “I think Avon is transitioning to that level of housing prices, and if I had to speculate, I would say, ‘Yes, that’s where Steamboat is also going.’”
Avon town leaders are also conducting a study to see if there are streets with little to no short-term rental licenses. Heil said the council may consider banning short-term rentals in those areas to preserve what neighborhood character is left.
While individual towns have regulations surrounding short-term rentals, Eagle County, which houses two major ski resorts, has no rules for unincorporated parts of the county.
“We are behind where I think we should be,” Matt Scherr, an Eagle County commissioner, said.
In 2020, the Colorado legislature granted counties the authority to begin licensing short-term rentals in unincorporated parts of counties, but Scherr said the county’s legal team believes Eagle County does not have a right to do so because of land-use agreements.
“There aren’t a lot of options for things for us to do,” Scherr said. “Part of why we’re behind where we should be is because we just lacked authority to do anything.”
Scherr said the county is currently studying the issue and exploring regulations for the future, though there is no timeline on when such decisions could be made.
• Do short-term rentals pay specific taxes? Yes, Airbnb automatically collects a 3.5% city sales tax and 2% lodging tax.
• Is a license required? Yes, and it is nontransferable.
• Is there a cap or zone restrictions? Yes, based on land space and neighborhood population.
Durango’s and Salida’s stricter requirements
The city of Durango, which is home to about 18,000 people, allows short-term rentals in two of its six established neighborhood districts. Within those neighborhoods, the city only allows a certain number of short-term rental permits based on land space and population of the neighborhood, said Dan Armentano, a city planner who specifically oversees the city’s short-term rental program.
“The permits got snapped up pretty quick, so now, we have a waitlist for those zones,” Armentano said. “It’s certainly a much smaller portion of our geographic area.”
While Durango’s rules are stricter than those of many other counties, Armentano believes they have saved the city from what he called the “crisis” that other mountain communities are experiencing.
“These code amendments were passed in 2014, so it’s very different here than what Steamboat is going through right now,” Armentano said. “We really avoided that scenario.”
• Do short-term rentals pay specific taxes? Yes, $3.66 per night.
• Is a license required? Yes, and it requires a $60 annual fee and is nontransferable.
• Is there a cap or zone restrictions? Yes, one per block.
In 2017, the Salida City Council voted to allow only one short-term rental per block, with only 3.5% of the total housing stock being permitted for short-term renting.
“We would also like for all short-term rentals to be paying commercial property tax, but it looks like that’s going to take a state fix,” said Salida Mayor P.T. Wood.
Wood said the city is currently revisiting its restrictions to provide more flexibility for locals to rent out their homes while on vacation, but the City Council has made no firm decisions on that.
“Everyone understands that that’s how people like to vacation, and we don’t want to harm that, but we do want to have some guard rails,” Wood said.
• Do short-term rentals pay specific taxes? Yes, 4.5% lodging tax and 5% vacation rental excise tax.
• Is a license required? Yes.
• Is there a cap or zone restrictions? No.
Crested Butte’s crisis
The town of Crested Butte made national news when council members declared its housing shortage a local disaster emergency.
“Right now between 10% and 12% of our workforce, depending on the source, is unfilled,” Crested Butte Community Development Director Troy Russ told Colorado Public Radio. “So there’s concerns within the town that we won’t be generating sales tax to provide the level of service that our residents are accustomed to.”
In an interview with the Steamboat Pilot & Today, Mayor Jim Schmidt said the city only allows 30% of units in town to be rented short term. Schmidt said the Town Council agreed to the 30% number about five years ago, after researching what larger cities had done to regulate nightly rentals.
While Schmidt said he recognizes the affordable housing crisis happened in spite of short-term rental regulations, he still believes the rules have helped more than they have hurt.
“It was a compromise because we had the property managers saying, ‘You can’t do that,’ and the homeowners saying, ‘I’m in a residential area, and I didn’t sign up to be next to a hotel,’ which is basically what it is,” Schmidt said. “It’s a commercial application in a residential area.”
• Do short-term rentals pay specific taxes? Yes, 2.4% sales tax and 2% lodging tax.
• Is a license required? Yes, and it must be renewed annually.
• Is there a cap or zone restrictions? No.
Andrew Isreal retired from his office job at age 50 to become a ski bum.
Israel lived part time in Aspen and part time in Michigan and was able to find a seasonal rental in Aspen with little to no trouble every year for the past 20 years.
However, beginning around 2020, Anderson said he struggled more and more to find housing to rent for longer than a month.
“I think the short-term rental phenomenon, on the surface, it looks so great. People get to rent out their place for whenever they want, but it’s changed the game for people who want to come for the season,” Israel said. “The Airbnb phenomenon has ruined it for a guy like me”
Ben Anderson, the principal long-range planner for the city of Aspen, believes the city, which is known for its celebrity homes and proximity to four major ski resorts, has had an affordable housing crisis since long before Airbnb and VRBO were invented.
“For a long time, we knew that they were here, and we’re kind of a part of the landscape, and we had some fairly minimal requirements for them,” Anderson said.
Anderson said he believes nightly rentals have contributed more to the degradation of neighborhood character than affordable housing.
“Some of the displacement of locals in Aspen took place decades ago, so a lot of our neighborhoods are already pretty vacant,” Anderson said. “But we definitely do have neighborhoods in town that are starting to have some concerns about this.”
To address those concerns, the city now requires every short-term unit to have a license and owners must pay sales and lodging taxes. Anderson said the city also has had preliminary discussions about restricting them in certain zones, though no decisions have been made.
• Do short-term rentals pay specific taxes? Only city sales tax.
• Is a license required? Yes, and the city is currently working to require licenses from all short-term rentals.
• Is there a cap or zone restrictions? No, though the city’s Planning Commission is having a non-vote discussion on the matter Thursday, Sept. 23.
Where Steamboat stands
Steamboat Springs City Council has held a series of meetings to discuss short-term rental regulations in the city.
In each of its meetings, City Council has heard from dozens of community members who have raised the same issues — short-term rentals are destroying the character of neighborhoods and taking housing stock from would-be long-term renters.
On the other side, council members have heard from property managers and real estate agents who have argued that 24/7 enforcement will solve the neighborhood character issue and vacation home rentals are too expensive for most locals to afford.
“Instead of jumping to moratorium and overlay, we would like to start with a hotline and reasonable steps,” Bradford said in an interview on Thursday, Sept. 16. “This 24/7 hotline is going to be huge because now we can give that number out to all the neighbors, and we can really see where people are calling in and where the issues are.”
At its Tuesday meeting, City Council is slated to review a timeline of short-term rental policies and discuss any changes they would like to make.
This story is from SteamboatPilot.com.
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