As the Steamboat Springs Planning Commission continues to draft a street-by-street short-term rental policy map, a work session on Monday, March 28, focused on the large swath of the city between the Steamboat Resort and downtown.

Dubbed “Zone 2,” the area contains some of the largest acreage for planned restricted short-term rentals, designated as “yellow” on the maps presented by Steamboat Springs Planning and Community Development Director Rebecca Bessey.

The commission was tasked with designating overlay zones where short-term rentals would be allowed by right (green), where they would be restricted (yellow) and where they wouldn’t be allowed at all (red).

Within that restricted yellow zone, commissioners have been tasked with parsing out subzones, where maximum “cap” numbers will vary from neighborhood to neighborhood.

The sticky process has depended largely on the existing number of short-term rentals and vacation home rentals in a given neighborhood.

However, the commission’s discussion ranged across a number of points beyond existing numbers — with some deciding-factors more subjective than others.

Given current market prices and “duplexes selling for $1.6 million,” commissioners questioned what exactly defines “residential housing.” They debated whether to allow a small number in some neighborhoods versus none at all.

A lengthy discussion took place about the future process for which a homeowner’s association could petition to be rezoned.

Throughout their discussions, commissioners circled back to the intended goals: addressing the affordable and attainable housing shortage and maintaining neighborhood character.

Submitting a public comment, Steamboat resident Elaine Dermody described a letter recently received in her mail with the title, “How to own a hassle-free vacation rental.”

“The letter outlined how much money we could make renting a home on a short-term basis,” Dermody wrote. “I would like to see Steamboat remain the wonderful, friendly Western town my husband and I moved to 25 years ago. I hate seeing homes being bought up by out of town businesses and individuals and then turned into short-term rentals … Make no mistake about it, short-term rentals (where the owner does not live in the home) are a growing, lucrative business in our community.”

Another public commenter, Zak Sheldon, is a property owner at a condominium complex on Apres Ski Way. He was petitioning to be included in the green zone and gave a different perspective.

“My partner and I currently own two units in this building, and we rely on the income produced by them to continue calling Steamboat home,” he wrote. “My father-in-law purchased his first condo in this building and had short-term rented it back in the ’80s. We are certainly not the “rich investors” that are so frequently referenced in council meetings. We are self-made, hard-working locals trying to survive in our beautiful ski town.”

According to information from the short-term licensing firm Granicus, there are 111 short-term rentals in Zone 2 and 48 vacation home rentals.

Vacation home rentals have existing permits, while the other short-term rentals exist primarily in multi-family units and are not currently required to have permits.

Commissioners agreed to cap the existing number for the Fairway Meadows, Overlook and Clubhouse areas, but did not come to a consensus on the Hilltop-Tamarack and Longview neighborhoods.

By setting a cap at half the existing number, Commissioner Jessica Hearns said the number can be reduced without shutting anyone down. However, it would likely happen over a long period of time as property owners lose their existing vacation home rental permit or their “legal nonconforming” status, if granted.

Ultimately, the Steamboat Springs City Council will decide the process in terms of whether to grant all existing unpermitted short-term rentals the option to apply for “legal nonconforming” status, or whether to pursue a path that includes shutting down existing short-term rentals.

While primarily yellow, the Zone 2 area does include some green “by-right” neighborhoods closer to the mountain, and some areas of red, in which short-term rentals would be prohibited.

The red areas on the map, Bessey described, were initially based on existing zones of “industrial, open space and recreation, and manufactured housing.”

However, several mobile home parks — manufactured housing — are zoned commercial, Bessey noted, and the planning commission directed those to be designated as red.

Commissioners on Monday agreed to move some of the “yellow” Zone 2 areas to “red,” primarily because there were few to zero existing short-term rentals or vacation home rentals. They also noted a number of areas where homeowner associations already prohibit short-term rentals.

Remaining on the commission’s map project is a discussion on the area south of Walton Creek Road, followed by a review of the final draft.

When the meeting adjourned, commissioners joked about getting a commemorative T-shirt for their participation in the short-term rental policy process.

“With a bullseye on the back,” one commissioner quipped.