Should Colorado allow short-term rental and vacant home taxes? Here’s what some Western Slope legislative candidates are saying.
Regardless of the outcomes of the Colorado legislative elections this November, one thing is certain for the victors from the Western Slope: they will be asked to weigh in on debates over short-term rentals, vacation homes and housing affordability.
How involved the state should be in those issues has been one of the most controversial topics at the Capitol in recent years, with no sign of the arguments stopping soon. So far, efforts to classify second-home owners differently and increase taxes for short-term rentals have been unsuccessful, but lawmakers have vowed to continue pursuing the concepts.
During the 2024 legislative session, lawmakers received hundreds of emails about two ultimately unsuccessful bills that would have nearly quadrupled taxes for some of the properties, including Airbnb, Vrbo and other rentals.
Other bills have included measures to offer less of a tax break to vacation-home owners. Lawmakers have hinted they will bring that concept back in future sessions.
The Colorado Association of Ski Towns, also known as CAST, recently announced a list of policy ideas it wants to see pursued by state lawmakers, including allowing local governments to tax short-term rentals and vacant homes and create fees for real estate transfers.
Here’s what the candidates in races for several Western Slope seats have said on the ideas.
House District 57: Velasco vs. Waller
House District 57 encompasses Pitkin and Garfield counties and the southwestern portion of Eagle County. The candidates there are incumbent Elizabeth Velasco, D-Glenwood Springs, and real estate businessman Caleb Waller, R-Silt.
Velasco was opposed to Senate Bill 233, the short-term rental bill considered earlier this year that would have taxed short-term rentals occupied for more than 90 days per year as lodging properties rather than residential.
But the legislator said she supports the ideas proposed by Colorado Association of Ski Towns, including allowing local governments to ask voters about imposing taxes on vacant homes and short-term rentals.
“I think the local community needs to create their own solutions,” she said, “and this would make sure that we protect local control.”
Instead of requiring a certain tax level for short-term rental taxes, as was proposed under Senate Bill 33, Colorado Association of Ski Towns proposes simply allowing local governments to set a tax rate for the properties if their community supports it.
She is also considering someday sponsoring a bill that would allow real estate transfer fees with the revenue going toward affordable housing, she said.
“It’s about local communities being able to raise funds for affordable housing projects,” she said. “Right now, they definitely need the support from the state and from the federal delegation.”
Waller, who owns short-term rental properties in Silt, said he supports the idea of some short-term rental owners paying more in property taxes.
“When an individual moves from beyond — let’s say five or six nightly rentals — I think they should be treated like the hotel industry and pay the same tax that hotel industries pay,” he said.
He also said while he generally leans toward a free-market approach, he’s open to having conversations about the other ideas proposed by Colorado Association of Ski Towns. He called the vacancy tax “an interesting idea.”
“Status quo is not working,” he said. “I’m willing to compromise if it’s for the best interests of the people of my district.”
House District 13: McCluskie vs. Williams
The race to represent House District 13 — which spans Chaffee, Grand, Jackson, Lake, Park and Summit counties — is between Speaker of the House Julie McCluskie, D-Dillon, and businessman Dave Williams, R-Buena Vista.
McCluskie opposed the bills to hike taxes on some short-term rentals this year and said she would prefer to leave regulations in the hands of local officials.
“I do believe that municipalities and counties have worked hard to strike the right balance,” McCluskie said. “I really defer to those local leaders because they are in touch with their communities to try and craft something that is community specific.”
McCluskie wouldn’t say whether she supports the proposals from Colorado Association of Ski Towns and said she won’t have a position until she sees the details laid out in proposed legislation.
Williams said he would “never support anything from the state level” that targets short-term rentals or second homes, adding that an increase in taxes would only hurt the viability of vacation rentals which are intrinsically tied to local economies.
He said he doesn’t believe taxation or regulation would make vacation-home or short-term rental properties more accessible for local workers.
“I don’t see any way that government getting involved in that could possibly make it better,” Williams said.
Senate District 5: Buerger vs. Catlin
Senate District 5 includes the entirety of Pitkin, Gunnison, and Hinsdale counties and portions of Delta, Montrose, Garfield, and Eagle counties. The candidates are businessman Cole Buerger, D-Glenwood Springs, and Rep. Marc Catlin, R-Montrose.
Buerger has said while he believes local control and protecting small short-term rental operations is critical, he wants to disincentivize empty housing units.
“Any revenue that comes from that should be used to fund more affordable and accessible housing through public, private partnerships or the affordable housing loan fund the state created years ago,” he said.
Catlin also said he wants to protect mom-and-pop operations and points to the importance of private property rights when asked about short-term rentals.
“There are retired folks that rent out units to supplement their income. Those are not the folks that we should be trying to force out of the market,” he said.
House District 26: Butler vs. Lukens
House District 26 includes Routt, Moffat and Rio Blanco counties and most of Eagle County. The race is between incumbent Meghan Lukens, D-Steamboat Springs, and veteran and former Craig City Council member Nathan Butler, R-Craig.
Lukens said she believes local governments should be empowered to regulate short-term rentals and tax vacant or secondary homes if their community supports it.
“Some Northwest Colorado communities have already successfully implemented short-term rental tax measures,” she said.
Butler said he hasn’t yet developed a policy position on the ideas but that he generally doesn’t support tax increases.
“We need to be cutting wasteful spending first before we try to increase our tax inflow,” he said.
Ballots have been mailed out and Election Day is Nov. 5.
Robert Tann contributed to this story.
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