Vail Town Council ponders tightening rent-by-owner rules
By the numbers
• 1,725 — Hotel rooms in Vail.
• 2,352 — Short-term rental units in Vail.
• 930 — Units licensed through the town of Vail.
• 1,422 — Unlicensed units.
Sources: Town of Vail, Destimetrics
VAIL — Owners who use internet services to rent out their condos, townhomes and other units for short-term rentals are supposed to hold business and sales tax licenses through the town of Vail. That isn’t happening.
As rent-by-owner services including Airbnb and Vacation Rentals by Owner have become common options for travelers, cities of all sizes have struggled with how to track — and collect lodging taxes — from property owners.
Some towns have taken stern measures, including steep fees and inspections.
Others, including Vail, have used a lighter hand. The result here is that more than half of units used for short-term rentals aren’t licensed.
Among the reasons those units aren’t licensed is the fact they’re very hard to track. Some owners rent homes out for one season and then switch to nightly rentals during busier times.
About the Study
A recent, and continuing, study by Destimetrics, a Denver-based company that tracks lodging data across mountain and beach resorts, aims to give client towns a better idea of just where those units are. The research work, which Destimetrics founder Ralf Garrison estimates has taken more than 5,000 hours of effort, has also included Boulder-based RRC Associates, another research company that does a lot of work in mountain resorts.
The Vail Town Council on Tuesday got its first look at that work during a fairly lengthy presentation by Garrison and Brumby McLeod, a professor from the College of Charleston-South Carolina who’s on sabbatical from his academic job to do hands-on research into the tourism industry.
Garrison told council members that because their use can change quickly, getting a handle on any town’s rent-by-owner inventory is “like pinning a tail on a moving donkey.”
Deep data mining
One of the answers to the question involved using county property-tax data and then narrowing those numbers down to a neighborhood level. There’s also the problem of winnowing out units that may also be rented out through property-management companies.
Even with the difficulty of tracking units, some towns have taken a fairly aggressive approach to regulating rent-by-owner units.
Some resort towns, including Jackson, Wyoming, require not just business and sales tax licenses, but also that owners have their units inspected by the local fire department.
McLeod said some towns hold public hearings on rent-by-owner applications. Other towns allow homeowner associations to weigh in on applications.
Towns can also try to regulate rent-by-owner units through fees and other regulations.
In Durango, fees for an approved rent-by-owner unit can exceed $750. In Vail, those fees are a little more than $160.
The studied towns with the most aggressive regulations — Durango and South Lake Tahoe, California — may regulate for different reasons.
Council member Greg Moffet said his take on the data is that Durango — which has fewer than 100 licensed rent-by-owner units— is trying to drive guests into hotels. South Lake Tahoe, on the other hand, has more than 2,000 such units. That city seems to have allowed more rent-by-owner business to keep guests from slipping into Nevada, Moffet said.
As the rent-by-owner business continues to evolve, and towns keep trying to understand and regulate it, the Destimetrics study made some recommendations for Vail. Mostly, those recommendations consisted of stipulations such as tighter regulations.
A group of lodging managers in 2015 came to the council with a list of recommended regulations that included licensing and inspections for both safety and guest quality. The council at the time opted for looser rules, requiring only sales tax and business licenses.
Most council members today weren’t on that Vail Town Council, and Tuesday’s discussion showed some interest in tighter rules.
“It’s surprising how few have gotten licensed,” council member Jenn Bruno said. “It looks like we need to step up — not going as far as Durango or South Lake Tahoe … but we need to figure out how this is affecting the community.”
The guest experience
Council members also said they’re worried about the guest experience for those who stay in rent-buy-owner units.
Bruno and her family live in a duplex unit, the other half of which is a rent-by-owner unit. Bruno said she was recently awakened at about 3 a.m. by people getting into her home, thinking it was the unit they’d rented.
“That wasn’t a good guest experience for them,” Bruno said.
Council member Kim Langmaid also lives near a rent-by-owner unit, one that has neighbors concerned about traffic and all-night lighting. Guests in that unit also had a less-than-ideal experience when a large icicle broke loose one night and badly damaged their car.
The council didn’t take any action Tuesday, but two things are clear: There will probably be new regulations in place by the start of the next ski season and, Mayor Dave Chapin said, those regulations will only be enacted after the public has had a chance to weigh in on any proposal.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org and @scottnmiller.
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