Summit County finalizes incentive details for its short-term rental conversion program
The program is set to roll out Friday, Oct. 15
What’s been in the works since June is now finalized: Summit County staff recently wrapped up details on the county’s short-term rental conversion program that aims to transition units into long-term housing. The program will officially launch Friday, Oct. 15.
The last of the details were wrapped up during a Summit Board of County Commissioners’ work session meeting Tuesday, Oct. 5. Summit County Housing Director Jason Dietz proposed various incentives for the first few phases of the program, all of which had unanimous support from the county commissioners.
The first phase of the program will last until Dec. 15 or until the program gets 15 conversions, whichever comes first. This phase offers the highest dollar amount in incentives, mainly because the county is striving to get units converted as quickly as possible before the beginning of ski season.
Dietz said winter typically relies on a larger workforce than any other time of the year, so it’s crucial to get at least some units converted before the season kicks into high gear.
According to his presentation, incentives are based on six-month and yearlong leases. For a six-month studio lease, the incentive starts at $5,500 and goes up to $13,000 for a three-bedroom or larger. For a yearlong lease, the incentive starts at $9,000 and goes up to $24,000 for a three-bedroom or larger. All of these payments will be split into two payouts. The first will be given in the first 30 days of the lease, and the second half will be given at the end of the lease.
Once the initial rollout of the program is complete, the incentives drop. Dietz said this move is strategic.
“The end of December’s New Year’s bookings are the most profitable, so the people that aren’t going to be in the program in the first 45 days will probably be having those Christmas, New Year’s bookings where they’re making a fair amount of money on the average nightly rate of the short-term rentals,” he said. “(They’d be) jumping into the program after the New Year’s holiday. That’s why the rate is a little bit lower because they had the opportunity to take part in the most profitable two-weeks of the short-term rental year.”
Some of the incentives available after the New Year might be tweaked depending on the success of the initial phase, but so far, they’re laid out like this: For a six-month studio lease, the incentive starts at $4,500 and goes up to $11,000 for a three-bedroom unit or larger. For a yearlong studio lease, the incentive starts at $7,000 and goes up to $20,000 for a three-bedroom unit or larger.
Before the spring, Dietz said he and his team would reevaluate what’s working and not working in the program. For now, the third phase of the program would have the following incentives: For a six-month studio lease, the incentive starts at $3,000 and goes up to $8,000 for a three-bedroom or larger unit. For a yearlong studio lease, the incentive would start at $7,000 and go up to $20,000 for a three-bedroom or larger unit.
Property managers are also encouraged to take advantage of the program. According to Dietz’s presentation, property managers will receive $1,000 per two-bedroom unit or smaller and $2,500 per three-bedroom unit or larger in addition to what the homeowner receives. Both of these are for six-month minimum leases, but if a yearlong lease is signed, they’ll receive an extra $200. These incentives are only offered within the first 45 days of the program. After that, all of the incentives will drop by 50%.
The more units a property manager converts, the more incentives they could receive. For example, if a property manager converts five units, they’ll receive $5,000, 10 converted units will get them $15,000, and 15 converted units will get them $20,000.
As for who can participate in the program, all short-term rentals in unincorporated Summit County are eligible, though Dietz said it might not work for rentals located in resort areas.
“The incentives were based on non-resort, short-term rentals and the financials that they were bringing in rather than resort rentals, but it’s absolutely open to resorts, as well,” he said.
Toby Babich, owner of Breckenridge Resort Managers and president of the Summit Alliance of Vacation Rental Managers, said he was happy with the preliminary plans the county rolled out.
“Overall, what I’m looking at in terms of these dollar amounts and the way that they have structured these programs, I think it’s very generous and hope they’ve set it in a range that will move the needle for a lot of owners.”
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