Dillon to increases fees, establish occupancy limits for short-term rentals | SummitDaily.com

Dillon to increases fees, establish occupancy limits for short-term rentals

Apartments and condominiums overlooking Dillon Reservoir are pictured in April 2020 in Dillon. The town is looking to make some changes to its short-term rental regulations.
Liz Copan/Summit Daily News archive

Dillon is expected to make a number of tweaks to its short-term rental regulations, including increasing licensing fees and establishing occupancy limits for the first time.

Last month, the Dillon Town Council shot down an emergency ordinance that would have placed a moratorium on the issuance of new short-term rental licenses in town, instead opting to dedicate the end of each biweekly work session to different housing-related topics. The Town Council held the first of such sessions Tuesday, Oct. 5, and was able to come to decisions on a few key issues.

Before diving into the conversation, a couple of council members disclosed that they had a stake in the short-term rental market: Brad Bailey said he owns and operates both short- and long-term rentals in town, and Kyle Hendricks said he holds a short-term rental license but isn’t currently renting. Both participated in the work session after a nod from town attorney Nick Cotton-Baez.

The first topic of discussion was licensing fees. The town currently charges $50, but Town Manager Nathan Johnson said it’s not enough to cover the costs of staff time and the town’s third-party compliance contract. Town staff pitched an increase to a flat rate of $250 per short-term rental license, which the Town Council supported.

By comparison, Frisco currently charges $250 per license. Both Breckenridge and Silverthorne charge tiered licensing fees based on the number of bedrooms. In Breckenridge, a license for a studio unit is $100 while a license for a unit with four or more bedrooms is $325. Silverthorne’s rates range from $150 for a studio to $500 for units with six or more bedrooms.

Finance Director Carri McDonnell said the increase to $250 would be sufficient for now to address the problem.

“The town clerk, myself, (town planner Ned West) and (town engineer Dan Burroughs), we all have to review the applications,” McDonnell said. “We all have to check them against the legality of the property that they’re in, so it does take some time. We looked at all of that over the course of a year on average. So we do feel that the $250 pretty closely covers, on average, our cost.”

The Town Council then jumped into a discussion on occupancy limits. Dillon is currently the only local government that doesn’t cap the number of individuals allowed in any given short-term rental. Johnson said adding some limits could help to mitigate nuisances, such as parking and noise complaints, and create some more consistency with nearby entities.

The town ultimately landed on two occupants per bedroom plus an additional two occupants, which is consistent with Silverthorne’s regulations.

“I think it works pretty good doing it per bedroom, so it scales up or down,” council member Steve Milroy said. “There’s going to be some exceptions, but I think overall with two (occupants per unit) plus two, we’re eliminating other issues that come up with parking and other challenges. There’s going to be some condos, I know, that may have exceeded that historically, but I think it’s a good framework.”

Finally, the town decided to add additional questions to its short-term rental license applications, asking applicants to include information about whether they’re renting out their whole unit or a partial unit, the number of bedrooms and bathrooms in the property, the number of anticipated rental nights and the average rates they’ll charge customers.

Property owners wouldn’t necessarily be held to their answers, but it would provide the town with some rough data that could provide insights for future analysis on the short-term rental landscape in town and how the properties are being used.

Mayor Carolyn Skowyra also suggested adding an optional question to ask applicants what it would take for them to convert their property to a long-term rental, but McDonnell said the town would likely take a more direct approach and send out a separate survey to short-term rental owners this winter.

The code changes would still need to be formally approved by ordinance. If the Town Council does decide to move forward with the new policies, they’ll likely go into effect early next year once the town has finished its planned work session discussions on the topic.

The work session packet included a tentative schedule of what topics the Town Council will discuss in upcoming sessions. On Oct. 19, the town is scheduled to discuss fines, inspections, and parking fees and requirements. On Nov. 2, the town will discuss a potential cap on the number of short-term rentals in town, and on Nov. 16, the town will discuss the possibility of an excise tax on in-town lodging.

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