According to Frisco’s housing report published last Tuesday, 45% of its homes are “vacant second homes.” Simultaneously, business owners report employees sleeping in cars or in the woods. Rooms are sitting empty, yet employees can’t find a place to live.

Almost all of last week’s council talk centered on short-term rentals, yet they only account for 20% of Frisco’s residential housing, according to the town’s report. Nearly half the town’s residential units are second homes.

Housing Program Manager Danelle Cook said the her team determined the number of “vacant second homes” by subtracting occupied homes — which include the quantity of licensed short-term rentals, the quantity of homes with a local mailing address in the Summit County Assessor’s Database and the number of long-term rentals as determined by the 2020 American Community Survey data — from the total number of residential housing units within town boundaries.

The term “vacant” simply means the homes are not a primary property nor are they rented, town officials explained. Frisco Mayor Hunter Mortensen said “unused,” might be a better word, although he said he regularly sees blacked out windows and unplowed driveways when walking his dog. Empty homes degrade the sense of community, councilors said, but there’s little they can do about it.

“We have way too many vacant houses that, God knows since day one, I’ve tried to make them pay their way, but I can’t,” Frisco Mayor Hunter Mortensen said. “So, unfortunately, short-term rentals become the boogeyman.”

Mortensen said he’d like to see second-home owners address the impact they have on the housing situation. Rising housing costs come from a mix of sources — not just short-term rentals — Cook said Tuesday. Like short-term rentals, which are subject to lodging and excise taxes, he’s had ideas for taxes on home purchases to return money to the town to address the housing crunch. They’ve never been more than ideas, though, since the town’s hands are tied, he said.

The biggest hurdle for the county in addressing the impact of second homes is the Colorado Taxpayer Bill of Rights amendment, or TABOR, Mortensen said. The amendment limits the town’s ability to tax private property. Since its enacting in 1992, it severely restricts a municipality’s ability to tax private property. All the town can do is receive a 1% transfer tax on property sales, since the tax was instituted prior to TABOR’s adoption.

Mortensen said past conversations with state representatives showed little hope of changing things. Most attempts to modify the amendment struggle to garner traction.

Councilor Elizabeth Skrzypczak-Adrian, a coffee shop owner, said the staffing issue needs addressing. Her employees sleep in cars and in the woods, she said.

“These people don’t have anywhere to live. I don’t know how to make their life better so that they’re safe and showered and rested to come and get the beat down every day,” she said.

Her comment came off the back of conversation about addressing the impact of short-term rentals.

Town staff provided councilors with a list of possible ways to address the impact of short-term rentals. Inclusionary zoning, overlay zone districts, a short-term rental license cap, defining license types and a moratorium rounded out the possibilities.

Councilors offered mixed opinions on the recommendations and weighed possible actions against the decisions of the county and surrounding towns. Some floated the idea of cap on short-term rentals, others said they wished to learn more about inclusionary zoning since it could also address the issue of workforce housing. The council scratched overlay zoning districts from its possibilities, but all others remained on the table.

“We want to be sensitive to not impact the teacher who’s renting a room out on weekends,” Mayor Pro-Tem Rick Ihnken said. That would mean avoiding restrictions on owner-occupied short-term rentals.

Councilor Andrew Aerenson voiced support for a cap, but it should be done tactfully and before the situation gets out of hand.

“I think that Breckenridge, by way of example, obviously waited too long. And now all of a sudden, they have too many, and they have to go back.”

He said, were the town to institute a cap on its number of short-term rentals, it should allow some room to grow. For instance, he said, since the town’s rate of short-term rentals in residential housing is at 20%, the town could consider a 22% cap, with an exception for owner-occupied rentals.

In general, the council did not oppose the idea of short-term rentals. Councilor Andy Held said it’s the property owner’s right to rent their property, but, “They are not taxed as a commercial business. And in every case — even the owner occupied units — it’s a revenue generator, and they should be taxed as such.” 

More discussion of short-term rental strategy is slated for Town Council’s next work session on June 28.