Frisco Town Council considers recommendation to cap short-term rentals at 22%
Following an extensive survey of real estate professionals, business owners and property managers, Frisco town staff recommended a 22% short-term rental cap, meaning 792 units of the town’s 3,600 residential units.
Frisco Town Council members voiced support, albeit mixed, for the cap, and town staff plans to return to Town Council with a draft ordinance at the next meeting.
Staff members also recommended creating a unique license type for locals who short-term rent their primary residence. The resident would need to live in the home for at least 10 months of the year. Staff did not recommend applying the license type to homes that short-term rent in between long-term rentals. Councilor Andrew Aerenson said it’s better a local rent one of their rooms rather than work a third job.
Councilor Andy Held said he thought the 22% number was arbitrary, and short-term rentals have a minor impact on available workforce housing compared to the impact of vacant second homes. Aerenson responded saying curbing short-term rentals had more to do with preserving community.
The council decided not to pursue a use-it-or-lose-it policy for short-term rental licenses following staff’s recommendation
Frisco received responses from 77 Frisco business owners, 190 Summit County real estate professionals and eight Frisco property managers.
Surveys were sent in July 2022 to 344 Frisco business owners, 660 Summit County real estate professionals and 19 Frisco property managers. Property managers were found through the “GovOS STR” database, according to the summary staff report. The staff report said all property managers were in business for at least five years and had portfolios ranging from four to 75 properties.
Each survey group was given a different set of questions as staff attempted to poll stakeholder groups on the town’s workforce housing needs and its approach to short-term rentals.
Business owners responded with conflicting concerns: employees struggle to find affordable housing, exacerbating staffing shortages, but regulating short-term rentals is not the answer since many businesses rely on tourist income.
“Overall, it seems that most business owners who responded to the survey are suffering the impacts of the housing crisis, but, at the same time, do not believe capping (short-term rentals) is the answer,” staff wrote in their summary report.
“The business owners are kind of stuck in the middle,” Frisco housing program manager Danelle Cook said.
Real estate professionals responded to questions on Summit County’s short-term rental moratorium and Breckenridge’s short-term rental cap. The reported decreased home prices, decreased volume of sales, more wealthy cash buyers and more vacant homes as a result of fewer short-term rental opportunities. They predicted similar results for Frisco if it followed suit.
Real estate professionals were asked how the Frisco housing market would respond to a short-term rental cap, and 50% of them said Frisco would expect to see a higher inventory of homes for sale, with 60% answering that home sale prices would also decrease.
About 70% of real estate professionals also responded by saying Breckenridge’s cap on short-term rentals was followed by a decrease in the number of transactions, but 54% also said there was an increase in the available housing inventory. Of those transactions, 60% of real estate professionals who responded said they were seeing a new demographic of home buyers: even wealthier cash buyers.
During roundtable discussions between Frisco staff and real estate professionals, the professionals agreed the COVID-19 pandemic created a novel housing market that’s slowly returning to pre-pandemic numbers, Cook said. Real estate professionals claimed a cap would decrease the cost of a home to a more attainable level, Cook said. Compared to June 2021, Summit County real estate professionals said the June 2022 monetary volume of home sales is down 37% and transactions are down 44%.
The small number of Frisco property managers responding gave varying answers. Some flat out opposed short-term rental caps, while others offered cap recommendations at anywhere from 25% to 51% of Frisco’s residential properties.
Of the property managers, 75% supported an exempt license for locals who use their short-term rental as a primary residence and rent it when their away.
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