Frisco weighs options for short-term rental regulation

A view of housing near the recpath and Dillon Reservoir in Frisco is pictured April 22, 2020. The town of Frisco is discussing what kind of short-term rentals has on its community.
Liz Copan/Summit Daily News archive

Frisco town councilors weighed options to address the impact of short-term rentals at its work session Tuesday, June 28.

The conversation carried over from its June 14 work session, when Frisco Housing Program Manager Danelle Cook reported about 20% of the town’s residential units were short-term rentals and 45% were second homes. Cook addressed the council again June 28 to offer three options based on the council’s feedback.

Council again took no action but voiced support for a cap and asked Cook and town staff to return with numbers and percentages for recommended short-term rental caps. Cook said she and her team would hold conversations with local stakeholders over the coming months to nail down specifics.

A housing report created by the town of Frisco revealed the make-up of the town’s residential housing units. Housing Program Manager Danelle Cook said “vacant” meant the home was not a permanent residence and did not have a short-term rental license.
Danelle Cook/Courtesy image

For option one, the town could impose a cap on short-term rentals based on a percentage of the town’s housing inventory. At last week’s meeting, councilor Andrew Aerensen recommended if the town put a cap on rentals, it should do so at 2% higher than the current percentage, allowing some time for renters to apply or adjust before the cap hits. With 20% of residential units currently short-term renting, a 22% cap would allow for 792 short-term rentals of the town’s roughly 3,600 residential units, Cook said. The town currently has given out 749 short-term rental licenses, she added.

That number jumped from 720 on June 14, after “word got out” that the town was discussing short-term rentals, Cook said.

“Even talking about it makes everyone panic and buy the license,” councilor Elizabeth Skrzypczak-Adrian said.

For option two, the town could take the same action but subtract deed–restricted homes from the total number of residential units. The town has 156 deed-restricted residential units, Cook said. Subtracting them would decrease the count from 3,600 to 3,444 units. In this case, a 22% cap would mean 758 licenses would be available.

Removing deed-restricted housing from the equation would prevent the number of short-term rental licenses increasing when deed-restricted housing is built, Cook said. In addition, however, market-value homes converted to deed-restricted homes would decrease the number of short-term rental licenses allowed, Cook said.

As part of the June 14 presentation, Frisco’s housing report compared affordable Frisco mortgages with actual mortgages.
Danelle Cook/Courtesy photo

For option three, the town could manage its short-term licenses with a ratio, rather than a percentage. For every deed-restricted residential unit, the town would permit a certain number of short-term rental licenses.

To introduce that option, Cook quoted the recent AirBnB report, which claimed each short-term rental created two local jobs.

But, she added, “Those jobs require locals to work them. Those jobs are typically low-paying. Those jobs require housing.”

The town’s current ratio is one residential unit for every five short-term rentals, with 156 deed-restricted units and 780 short-term rentals, she said.

Cook presented the council with several ratios, ranging from one-to-one to one-to-seven.

Cook pointed out if the town reaches its five-year goal of doubling its deed-restricted housing, the number of short-term rental licenses would double in turn.

If the town went forward with any form of cap, Cook said it could also consider creating defined license types. Her team proposed two types, but she said the town could add more varieties after conversations with local stakeholders.

The two varieties she and her team proposed were exempt and non-exempt. Exempt licenses would apply to locals who rent their permanent residence, she said, and non-exempt licenses would apply to all other types. Only 40 of Frisco’s current rentals would meet the exempt status, Cook said.

Councilors were generally in support of a short-term rental cap but could not land on an option, percentage or value for it.

Councilor Andy Held said a 22% cap sounded like a “shot in the dark.” He requested Cook return with more data to support a specific value.

Councilor Andrew Aerensen similarly asked for a more specific value. He said he considered Breckenridge to have waited too long to take action and set its cap too high.

Skrzypczak-Adrian asked Cook if the town could see how often short-term rentals are being used, as the town could also consider a use-it-or-lose-it standard for licenses. Cook said that would require working with rental software companies. Aerensen said the town should bring the use-it-or-lose-it standard up when the town meets with local stakeholders.  

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