Property managers react to Summit County’s Lease to Locals short-term rental conversion program
While property managers are hopeful for the program’s success, some point to its uncertain future
Editor’s note: This headline has been updated to correct that property managers were interviewed for this article.
Summit County’s short-term rental conversion program has been a hot topic ever since Summit County Housing Director Jason Dietz first suggested the idea during a Summit Board of County Commissioners work session during the summer.
Since the program’s infancy, the topic has generated a lot of buzz, especially from property managers. Many of these stakeholders have contributed to the conversation about how the program will impact their businesses.
Now that the program — which is a partnership between the county and town of Breckenridge — is a tangible thing, how are these business owners feeling about it?
Toby Babich, president of the Summit Area Alliance of Vacation Rental Managers and owner of Breckenridge Resort Managers, was one of the few stakeholders who began discussing the proposed program with the county from the beginning. Now that it’s rolled out, Babich said he is pleased to see there are a few different phases of the program and a varying degree of incentives depending on the lease length and number of bedrooms.
“I think it’s the amount of flexibility and the amount of options that they built into the program,” Babich said, highlighting the positives. “It wasn’t just a small amount of money for a one-year lease. They had different lease terms, they had different levels of the number of bedrooms, and they all have different amounts built into them.”
Peter Reeburgh, owner of SummitCove Vacation Lodging in Keystone and an Alliance of Vacation Rental Managers board member, said he was initially skeptical the program would make sense financially for owners. Reeburgh said he was looking for ways to provide housing to some of his employees, so he was brainstorming ideas for a conversion program of his own alongside the county in case its proposal didn’t make sense for his business.
“Once this program rolled out, I redid all of my spreadsheets and math, and it’s pretty good,” Reeburgh said. “There’s some select properties that would actually benefit the owner, and it would be good living space for employees.”
Reeburgh noted that property management companies are not immune to the local labor challenges. He was most interested in the program to see if any of his owners would be interested in converting their properties into long-term housing that could be occupied by his own staff.
Though the two are hopeful the program will be successful, they say it’s too early to tell. Reeburgh noted that this was a pilot program and he remains skeptical beyond this initial year.
“I have concerns about what’s beyond one year and what kind of funding is available for beyond a year,” Reeburgh said. “What I don’t want to do is go back to my own model where it was getting pretty tough to make the math work without the incentive to convert a short-term rental to a long-term rental.”
Babich also noted that the unknown long-term funding is reason to worry. Because of the county’s highly valued real estate market, Babich said the county will likely need to develop some kind of long-term incentive to keep the program running.
Babich cited other reasons for concern, too, especially as they relate to Breckenridge. Prior to the program’s rollout, the town implemented a cap on the number of short-term rental licenses, which will take effect Nov. 2. The cap is set at about 2,200 licenses, and Breckenridge Town Manager Rick Holman said the town currently has 2,795 nonexempt licenses. This is worrisome to Babich, who said he feels hesitant about encouraging his owners to participate in the program.
“The cap they put in place, unfortunately, has created an environment where I can’t, in good conscience, ask one of my owners to convert from short term to long term knowing that they can’t then get a short-term license back the next year if they want to move in that direction,” Babich said specifically about units in Breckenridge. “The cap has really handcuffed property managers in Breckenridge from participating in this program.”
Babich said from his understanding, owners of short-term rental licenses would be converting to long term, meaning they’d be relinquishing their short-term rental license. After renting their units out long-term, they’d no longer have the option of renting short term in the future because of the town’s cap.
According to Holman, this isn’t quite how the program would work. Holman explained in an email that nothing says owners have to relinquish their short-term license. Holman said they can keep their license as long as they are not short-term renting during the period they have agreed to rent to a local worker and that they can go back to short-term renting once their long-term lease is up.
To be eligible for the county’s program, owners have to be based in Breckenridge or unincorporated Summit County.
Babich believes the Breckenridge cap severely limits how much he can participate. He said only about 15% of his portfolio is outside the town’s limits — the bulk of which is near Copper Mountain and in Keystone. So far he’s identified two properties that could be a good fit for the Lease to Locals program, though he said he’s working on marketing campaigns to spread information about the program to his clients.
As for Reeburgh, he said he’s identified about 10 properties that could be a good fit. Reeburgh said he’s exploring these units for one-year leases and that they would be set aside specifically for his workforce. Reeburgh said he has about three employees who need housing before December.
If these owners are interested in the program, Reeburgh said he plans to take extra steps to ensure the units are well cared for while his staff lives there. He plans to use the incentive money to pay for monthly cleaning services as well as regular inspections and a deep clean at the end of the lease. Reeburgh noted that the move won’t be profitable for him but that his need for employees outweighs the costs.
As the program gets its sea legs, both Reeburgh and Babich said they’ll be interested to see how it unfolds in the next year or so.
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