Short-term rental debate heats up with public comments

Opposition to proposed zoning map argues restricting STRs won’t solve housing issues

The Steamboat Springs Planning Commission has recommended a short-term rental overlay zone map for city council’s approval. The map would divide the city into three color zones with different restrictions on short-term rentals operating in each one of the zones.
City of Steamboat Springs/Courtesy image

City hall was abuzz Tuesday night, May 10, as the Steamboat Springs City Council took feedback for a proposed zoning map regulating short-term rentals, and short-term rental owners came out in full force against the proposal.

Public comment on the short-term rental overlay map opened at 7 p.m., and by that time, there were over 50 people in city council chambers and the Zoom feed carrying the meeting remotely was a busy grid of small boxes.

Council members knew this was coming. They brought in an additional three-minute countdown clock and placed it front and center for everyone to see. They asked everyone to neatly line up five at a time while waiting to offer comments.

The crowd obliged at first, but it wasn’t long before people disregarded the direction and packed into a line that stretched all the way out the door. Those who supported the proposed map were outnumbered about two to one.

The overlay map was drafted by the Steamboat Springs Planning Commission and would limit the number of short-term rentals according to three colors of subzones.

If the overlay map is approved, residents in the red areas would be prohibited from acquiring short-term rental licenses, the yellow areas would cap the licenses at specific numbers and the green zones would have no limits on the number of allowable short-term rentals. The plan would work parallel to another ordinance that would require short-term rentals to have licenses to operate within city limits.

Most of the people who spoke against the overlay map either live in or have property along Walton Creek Road, a neighborhood also known as “condo land.” Shadow Run and Sunray Meadows condominiums also were well represented by residents who opposed the overlay map, as those two complexes were designated in a red zone.

As it is written, the ordinance would allow current short-term rental owners to continue business in the restricted zones through a legal nonconforming use, for which they could apply during a six-month grace period after the ordinance would go into effect.

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Those arguing in favor of the overlay map said the allowance of a legal nonconforming use designation was a big compromise, considering the original plan city council entertained was banning short-term rentals altogether.

“(Short-term rental owners) lose nothing — nothing — but they want more,” one resident told council members.

On the other side, some short-term rental owners praised the idea of grandfathering in existing short-term rentals, while they criticized the process, saying it is confusing and a six-month grace period would be too short. They insisted that the proposed restrictions on new licenses would still depreciate the values of their properties.

The overlay map’s potential effects on property values were brought up repeatedly.

“On the East Coast, where we used to live, our condo there was sold for $100,000 under market value at the time because of a simple limitation on short-term rentals,” a property owner in the Walton Creek area said.

Andrew Beckler, a local business owner, responded to the argument with an observation of his own.

“These property values are kind of artificially inflated right now because they’re based off the potential income,” he said. “These are residential areas — they don’t need income.”

Beckler also asked council to consider the property values of businesses in town, which are being driven down by limited staffing because of a lack of housing.

However, some opponents said they invested in properties at a certain price point expecting income from short-term renting, and without that income, they would struggle to pay their mortgage.

Opponents of the overlay zone also argue that short-term rentals benefit the city by bringing in commerce and sales tax.

Several people opposed to the new zoning map insisted the housing crisis should be solved by increasing supply, not regulating short-term rentals.

But Jason Peasley, executive director of the Yampa Valley Housing Authority, countered their argument.

“We’re currently getting ready to lease up 90 units,” he said. “There are 800 households looking for a rental apartment right now. There are 3,000 vacation rentals. Now not all of those could be long-term rentals, but some of them were.”

Another resident tried to rebuke Peasley’s remarks by contending there is “absolutely no evidence that regulating STRs out of existence is going to create housing.”

Many of the opponents to the overlay map described their properties as lacking potential for long-term housing, either because they are part-time properties they themselves occupy for parts of the year or because the mortgage is so high long-term renters couldn’t afford the unit anyway.

The city has not done a formal study on the number of long-term rentals that would enter the market if tighter restrictions were placed on short-term rentals. City staff said such a study would be costly and take a long time.

Many of the people who spoke out against the overlay map are part of homeowner’s associations who felt the overlay map conflicted with their own declarations that permit short-term rentals.

Included in the planning commission’s recommendation for city council to adopt the overlay map was a recommendation to not exclude HOAs from the overlay zone, which would disallow them from setting their own limits on short-term rentals at a higher number than the limits imposed by the city. City council is still deliberating how HOAs might be incorporated into the overlay map.

While voices from the opposition repeatedly asserted the overlay map is a breach of homeowners’ property rights that could lead to lawsuits, there was some common ground.

The opposing voices generally agreed that requiring licenses and enforcing rules on short-term rentals was acceptable, but many drew a hard line at restricting the number of licenses issued.

Among those voices, the common rationale was that enforcing the terms of the short-term rental licenses would solve most of the issues brought up relating to the impacts short-term rentals have on the character of communities, especially regarding noise, trash and parking complaints.

The public comment session was extended by half an hour, yet there were still members of the community who didn’t get a chance to speak. There will be another public comment session at 6 p.m. Tuesday, May 17, at Centennial Hall, 124 10th St.

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