Big vote on STRs coming next week |

Big vote on STRs coming next week

Steamboat City Council puts short-term rentals on agenda for Tuesday

The proposed short-term rental overlay map as of June 7, 2022. After the first reading of the ordinances, city council decided to move Shadow Run Condominiums (B4) into the yellow zone after it was previously in the red zone.
Spencer Powell/Steamboat Pilot & Today

Barring an unexpected twist, the Steamboat Springs City Council meeting set for Tuesday, June 7, could be one of the most important of the year.

After more than 30 meetings of the Routt County Planning Commission and thousands of hours from city staff, City Council members will likely issue their final vote with second readings on a handful of ordinances that would regulate short-term rentals.

According to council member Gail Garey, the ordinances are part of an ongoing comprehensive approach to regulating short-term rentals in Steamboat Springs, and she said specific details in the ordinances will likely be revisited in the future as needed.

“I certainly wouldn’t have been elected if the community didn’t want to take action to limit the number of short-term rentals,” said Garey.

She also mentioned an upcoming proposed tax on short-term rentals that may be on November’s ballot for voter approval.

If it all comes together, Tuesday’s vote could be a defining moment in a discussion that started back in December 2018, when City Council appointed an ad-hoc citizens’ committee to examine short-term rental issues and policies.

After six months, the committee recommended City Council implement a better enforcement strategy for handling complaints, reign in illegal short-term rentals and implement either registration or licensing requirements on all short-term rentals.

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To serve as generalized guidance in drafting these ordinances, City Council and the planning commission agreed that short-term rentals have an impact on housing supply and availability, neighborhood character and overall community character.

Council members had planned to implement licensing requirements by 2021. However, in June 2021, City Council enacted a moratorium on all new vacation home rental permits and directed staff to bring forward additional policy options. The planning commission went to work drafting ordinances that would produce a licensing and enforcement process for short-term rentals and implement a short-term rental overlay zone map.

The licensing ordinance would require short-term rental owners to apply for an annual license and pay a fee every 12 months, while the overlay zone map would restrict the number of short-term rental licenses issued in various subzones.

A heated debate

Over the course of previous public comment sessions regarding new regulations on short-term rentals in Steamboat Springs, many arguments have been brought forth on both sides. Below are some of the arguments that have been presented.

Arguments for implementing the overlay map

• Short-term rentals lessen the inventory of available long-term rentals.

• Short-term rentals disrupt communities with noise, trash and parking.

• Short-term rentals artificially inflate the value of properties.

• Short-term rentals affect community character by lessening the density of long-term community members within neighborhoods.

• The ability for existing lawful short-term rentals and vacation home rentals to be grandfathered in through legal nonconforming use is a fair compromise.

• Short-term rentals exploit a loophole that allows homeowners to run a business while only paying residential, as opposed to commercial, tax rates.

• The abundance of short-term rentals is transforming Steamboat Springs into a tourist destination rather than a community where people want to live long-term.

Arguments against the overlay map

• The restrictions will lessen property values.

• The restrictions violate private property rights.

• Some homeowners’ associations argue the right to rent short term is built into the language of their charters and declarations.

• Short-term rentals bring tourism and tax revenue into the city.

• There’s no guarantee that the homes used for short-term rentals would be rented out long term if prevented from obtaining a license.

• Many of the short-term rental properties would be too expensive for people to afford renting out anyway.

• People made investments into their properties expecting short-term rental income and in some cases can’t afford the property without that revenue.

The licensing ordinance would also enact enforcement measures, such as a 24/7 complaint hotline to phone in short-term rental owners who are not operating in line with the terms of their license.

Even among short-term rental owners, most people support the licensing and enforcement measures, but the overlay zone map has been a point of contention.

The overlay zone map divides the city into color-coded zones, with green zones having no limit on the number of short-term rentals, yellow zones having caps that are unique to each area, and red zones where short-term rentals would be banned provided they’re not already in operation and grandfathered in.

“It’s taking action to control the growth of STRS in those areas where we think are most appropriate,” Garey said.

Shortly before sending the ordinances to City Council, city staff added language that would permit existing short-term rentals and vacation-home rentals to continue operating after applying for legal nonconforming use, even in the red and yellow zones.

Knowing there could be thousands of short-term rental owners applying for legal nonconforming use, the planning commission then expanded the red zones under the assumption that many of the existing short-term rentals will continue operating.

“I think it’s a compromise,” said Garey, referring to the city allowing existing short-term rentals being grandfathered in.

Anyone operating a short-term rental with a legal nonconforming status permit would have to demonstrate the property has been used for short-term rentals within the previous 12 months, and the owner would have to reapply for the permit every year.

These permits would not transfer if the property were sold, but the new owners would remain eligible to apply for their own legal nonconforming permit. If the permit is not used for a period of 12 consecutive months, legal nonconforming status would be abandoned permanently, even if the property changes ownership.

“The City Council acknowledges that many owners of a short-term rental property, having purchased, owned and used their property for many years, have developed strong ties to the community and expect that they will be able to continue to be part time members of the community and/or transition to full time residence in the community,” language in the ordinance states.

The ordinances would also define and regulate “hosted short-term rentals,” or residential properties that rent out space within the home while the rest of the property is occupied on a long-term basis.

Hosted short-term rentals would be allowed to operate even within the restricted and prohibited zones as long as they have the appropriate licenses and adhere to the city’s operational requirements.

At 5 p.m. Tuesday, members of the community will have another chance to address city council prior to the anticipated vote.

The four newest council members — Garey, Edward Briones, Dakotah McGinlay and Joella West — all campaigned on platforms saying short-term rentals need to be regulated.

“I think our community sent a message loud and clear in November,” said City Council President Robin Crossan.

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