In a four-hour work session Thursday, Steamboat Springs Planning Commission held the first of several discussions focused on where short-term rentals could potentially be restricted and what rules would apply in areas where they are allowed.

Commissioners heard public comment from more than a dozen community members, including property managers and second-home owners advocating for short-term rentals, as well as full-time residents claiming short-term rentals are destroying the character of traditional locals’ neighborhoods and reducing the supply of long-term housing inventory.

At the end of their discussion, commissioners directed Planning Director Rebecca Bessey to research more thorough definitions of what constitutes a primary residence and define proposed criteria for approval of a short-term rental in certain zones of the city.

Commissioners eventually will look at a detailed map of the city and propose where overlay zones restricting or prohibiting short-term rentals would be enacted, but that discussion could be several months away, as commissioners have scheduled work sessions for October and November to move the discussion forward.

What are the rules?

Vacation home rentals are currently the only type of short-term rental that requires a license in Steamboat, though the city is working with an enforcement company to ensure all short-term rentals obtain licenses.

The city code defines vacation home rentals as a single-family dwelling or duplex unit used for lodging where the owner or other permanent resident does not reside in the unit.

There are currently 213 active, operating vacation home rental permits in the city. If Planning Commission and Steamboat Springs City Council eventually adopt overlay zones restricting or barring short-term rentals from certain areas, such rules will apply to all short-term rentals, not just vacation home rentals.

Drawing the lines

Though commissioners did not make any official decisions, they focused much of the conversation on the condos surrounding Walton Creek Road, which is commonly referred to as “Condo Land.”

Because the city does not require permits from condominium owners using their space as a short-term rental, it’s difficult to estimate exactly how many condos in the area are used as such, but commissioners estimated that short-term rentals make up a large portion of much of the area.

“In my opinion, on the surface, I think the south side of Walton Creek Road, the whole stretch from U.S. Highway 40 to Whistler Road should be green,“ said Commissioner Tom Ptach, claiming the condos in the area should be allowed by-right without needing permission from the city.

Bessey told commissioners that many of the condos in the area are perceived by community members to be good “entry-level housing” for younger residents looking to buy their first home, which made the area difficult to define, as it includes high-end condos near Steamboat Resort, as well as more affordable condos being rented and bought by service workers or those buying an entry-level property.

“We wanted to try and ensure that we do have some multifamily residential uses in our community that are not completely open to short-term rentals,” Bessey said. “The thought being that there should be some sort of dividing line. At some point, those areas trend more toward locals than resort-type lodging uses.”

As for where that dividing line could be, Bessey suggested Whistler Road as an idea.

“Is Whistler the dividing line?” Bessey asked. “I don’t know. I’ve heard arguments on both sides.”

Commission Chair Brian Adams said Whistler Road may be a tough dividing line because Whistler Village and Walton Village condos could be used both by locals wanting reasonably-priced housing, as well as owners wanting to rent to short-term visitors.

“A lot of things with Whistler have to do with our own perception,” Adams reminded commissioners.

By the end of their four-hour discussion, all commissioners agreed to look more closely at Hilltop Parkway because of its high number of vacation home rentals, as well as the condos surrounding Walton Creek Road.

Starter housing

Scott Wappes bought his condo in The Pines at Ore House in 2018. At the time, Wappes was surrounded by friends, most of whom rented their condos, and had no short-term rentals in his neighborhood.

Now, nearly all of Wappes’ friends have moved because they are no longer able to afford the rent, and Wappes has five short-term rental units surrounding him.

“They can’t find housing or their rent has been jacked up to the point where they can no longer afford to live here,” Wappes said. “The neighborhood character is also gone.”

Wappes, 26, told Planning Commission that Steamboat would be losing “a generation of people” close to his age if the city did not find a way to add more housing to the long-term market.

“I don’t think Steamboat 700 (now called the Brown Ranch,) is going to be the silver bullet we’re all hoping it is,” Wappes said.

Commissioner Jessica Hearns echoed many of Wappes’ concerns, claiming that property owners who choose to rent their condos to nightly visitors rather than full-time locals have contributed to the city’s affordable housing crisis.

“Not all of them are necessarily affordable, but of the 4,000 short-term rentals, at least one of them could increase housing supply,” Hearns said. “Some of my neighbors who own and long-term rent have just opted to start short-term renting because of the flexibility.”

Hearns also said many of the residents who speak to the City Council and Planning Commission on the issue are either short-term rental property managers or second-home owners, which she felt was an inaccurate representation of Steamboat’s population.

“I’m not convinced that the folks who want to use it part of the year take precedence over the person I work with at the brewery,” Hearns said. “I work in the service industry in this town, so I’m possibly the most in-tune of anyone on the commission of how many people are afraid of losing their ability to long-term rent.”

Commissioner David Baldinger, Jr., who is also a real estate agent, said those who choose to rent their condos short term over long term are not making more money off of the condo, but they choose that option so they can use the property whenever they please.

“I don’t see in the marketplace a lot of people buying units just to short-term rent them,” Baldinger said. “That would not be a very economically sustainable model. Most of the renting is to supplement ownership and use.”

Baldinger said Shadow Run and Walton Village Condominiums are two examples of properties where an owner would not make any more money renting short term than long term.

“It’s not all about money,” Baldinger said. “It’s about if we want members of our community that spend weeks or months here to put their property to use for income purposes to fund the dream.”

Renting to pay off a second home

Kari Riegner bought her home on Hilltop Parkway because she loves Steamboat and hopes to move to the city full time someday.

But Riegner, who lives in Golden, knew she would only be able to afford her second home in Steamboat by renting it short term.

“We wanted to be able to enjoy the community, but we don’t have a lot of money,” Riegner said. “We can’t just purchase a property and just have it sit there.”

Riegner was in the process of applying for a vacation home rental permit when City Council enacted the moratorium on applying for permits — a move she said will force her to sell the house if the moratorium is not lifted soon or if her house lands in an overlay zone restricting or prohibiting short-term rentals.

“Steamboat does rely on tourism revenue, and those people need a place to stay,” Reigner said. “They want to stay near town, which is why we bought where we did.“

In researching the area, Reigner said more than 50% of the houses near her are second homes, so she urged commissioners to consider leaving the area surrounding the 400 block of Hilltop Parkway out of any restricted or prohibited zones.

Molly Lucas, a Denver resident who operates a short-term rental in Steamboat, said a broad overlay restricting short-term rentals would be a poor choice and urged commissioners to take a more detailed, nuanced approach.

“You’re making a drastic change to property rights without very much information,” Lucas said. “That will have a big impact on people’s property rights, and I don’t think that’s fair.”

AJ Summers, a Steamboat resident who said he lives near multiple short-term rentals and feels they have had a negative impact on the neighborhood as a whole, said paying off a second house should not fall on the shoulders of the neighbors surrounding the house.

“I do feel sorry for people that bought houses thinking they could rent them out and pay for them that way, but we shouldn’t have to subsidize people’s second homes at the cost of our neighborhoods,” Summers said. “You can’t run a hotel in a neighborhood.”

When a neighborhood becomes a hotel

In discussing short-term rentals and the problems they bring, council members, planning commissioners and housing experts often point to the same issue — neighborhood character and what may be lost when neighbors rotate in and out of a short-term rental every week.

Debbie Spiker bought her house on Meadow Wood Court 22 years ago because of its quiet, neighborhood feel.

Though Spiker’s neighborhood is still majority full-time locals, she has a short-term rental owner across the street. She told commissioners that nightly renters occupying the house have “destroyed” the character of the neighborhood with loud noises, trash and parking issues.

“I keep hearing about fairness of people monetizing that property, and I get that, but on the other hand, where’s my fairness?” Spiker asked. “You’re penalizing us homeowners for people who do not live here. They’re not registered voters here, and they’re basically getting their mortgage paid.”

Dorian Welch, a Ridge Road resident who has owned his house since 1976, said what was once a street for longtime locals, has now become a spot for tourists who he said often bring loud parties with them.

“We have two hotels in our neighborhood, and that means giant tour buses going back and forth through our community,” Welch said. “We’ve historically been a single-family neighborhood, and we want to keep it that way.”

Sarah Bradford, owner of Steamboat Lodging Co, said Granicus, the 24/7 enforcement company the city has contracted with, will help alleviate many of the concerns around noise, trash and parking issues.

“We all agree there are probably some areas of Steamboat that should be left to locals,” Bradford said. “We’re not saying that’s not a goal, but this is not an emergency in my view.”

Suzie Spiro, owner of Steamboat Lodging Properties, also urged commissioners slow down the process.

“The City Council has put you in a position to rush to judgment when you don’t have all the facts in front of you,” Spiro told commissioners. “Take no action, and let us all move on to reasonable decision making.”

While Bradford and Spiro encouraged a slower process with lighter restrictions, Jordan Jones, a resident on Apres Ski Way, said he felt the city should have enforced restrictions decades ago.

“AirBnb and VRBO are outrunning government regulation,” Jones said. “It’s been that way for 10 years now. I think that this is the most important issue that our city is going to face over the next couple of decades.”

Should short-term rentals be treated like businesses?

Jones and several others who spoke during the public comment portion of the meeting argued that because short-term rentals act as commercial operations where the property owner collects money from the guests, they should be treated as businesses, which includes being taxed and zoned like a business.

“I wouldn’t expect a pub to suddenly pop up next door to me, and I wouldn’t expect to suddenly start serving pizza out of my house,” Jones said. “These are no different; they are hotels and businesses.”

Bill Latoza, a resident on Val D’Isere Circle, said he bought his property in part because the bylaws of the neighborhood clearly state businesses are not allowed.

“Now it’s hard for me to keep my windows open at night during the summer because of the loud noises from the short-term renters,” Latoza said. “These are businesses and, in my feeling, they do not belong in residential neighborhoods.”

While City Attorney Dan Foote was not present in the meeting to weigh in on the legality of treating short-term rentals like businesses, the Colorado Supreme Court ruled in 2015 that short-term rentals did not violate neighborhood ordinances against having businesses in certain neighborhoods because they are used for residential purposes.

Moving forward

By the end of Planning Commission’s meeting, Commissioner Jeff Steck said he felt the majority of Steamboat residents want fewer short-term rentals, not more.

“I think we have to put the interest of residents in front of that of businesses and outside homeowners,” Steck said. “Maybe you have a party next door, but what you don’t have is a neighbor, you have a stranger, and I think that hurts this community.”

Steck suggested looking at a map of the city and outlining neighborhoods and complexes that are completely off-limits for short-term rentals, which Planning Commission will do in the next several months.

To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.