Short-term rentals on the table for Colorado legislators

As mountain towns across the state are grappling with how to regulate short-term rentals, the Colorado Legislature is exploring multiple avenues to legislate the issue on a statewide level.

The annual legislative session started Wednesday, Jan. 12, and legislators have yet to hear a bill on the topic, but lawmakers across the Western Slope are set to propose several.

Rep. Dylan Roberts, a Democrat from Eagle who represents Routt and Eagle Counties, has worked with the state’s affordable housing committee to draft a bill modeled after an idea the town of Winter Park has implemented. The bill has not hit the floor yet.

If the bill passes, local municipalities could apply for state funding to incentivize property owners to rent to a long-term tenant, rather than a nightly guest.

“We think Winter Park has a really great local idea that should be spread out across the state,” Roberts said in an interview Thursday, Jan. 13. “This can really find that balance between respecting someone’s property rights and providing more housing in our mountain communities.”

Roberts said the bill does not aim to create fewer short-term rentals, but instead add more long-term options in mountain communities facing a massive affordable housing crisis.

“Short-term rentals are definitely contributing to the affordable housing crisis that we have in our state,” Roberts said.

Still, Roberts believes the stricter regulations should be reserved for cities and counties, who have a better grasp on their community needs than the state does.

“Given that the short-term rental market is very different in different parts of this state, a statewide solution could create some unintended consequences,” Roberts said. “We want to do what we can to empower local communities to make these decisions and not get in their way.”

Ulrich Salzgeber, president of the Steamboat Springs Board of Realtors, said the idea is helpful in theory, but may not work for most property owners.

“I love that concept, and it will work for some people, but that doesn’t mean it’s going to fit everyone’s needs,” Salzgeber said in a Friday interview.

Salzgeber said most who operate their properties as short-term rentals are second homeowners who hope to use their property several times a year and retire to it one day. Many of them, he added, would not be able to afford their second property without renting it out to nightly visitors.

“I think the perception out there is that large companies or corporations are buying units up to short-term rent them,” Salzgeber said. “I’m sure that there is some of that going on, but I would say it’s in the minimum percentile.”

Because so many short-term rentals in Steamboat are not registered with the city, it is impossible to measure how many exist and who operates them.

Salzgeber said the main issue with incentivizing property owners to rent long-term is that owners will no longer be able to use their property whenever they want.

“Incentivizing them might be a good idea, but the problem with that is you no longer have the opportunity to use your property if you long-term rent it,” Salzgeber said “It’s going to fit some, but I don’t think it’s going to fit a lot.”

Routt County Commissioner Tim Corrigan said commissioners across the state — through a statewide county commissioner organization called Colorado Counties Incorporated — are exploring pushing a series of bills.

One possible bill, which is still just an idea, would allow municipalities to tax short-term rental units as hotels.

Corrigan said the reasoning behind the proposed legislation is to tax short-term rentals that are used on a year-round basis as a nightly rental as a business, as many believe they are no different from other commercial businesses.

The details of the potential bill have not been completely worked out, but Corrigan said lawmakers would like for it to differentiate between short-term rentals operating more like businesses and those that are housed by a part-time resident and only rented nightly for part of the year.

In Colorado, commercial property is assessed at a significantly higher rate for property tax purposes than residential property.

“This is a tax equity issue so that we’re being fair to all of our taxpayers,” Corrigan said.

The other bill county commissioners have discussed is requiring AirBnb, VRBO and other short-term rental platforms to share certain information with municipalities, so the municipalities can ensure that all listings on such websites are in compliance with zoning laws.

Routt County does not permit short-term rentals in unincorporated parts of the county, but county officials do not enforce any restrictions. Taking action would require a court order, which Corrigan said is difficult to obtain.

A bill requiring AirBnb and VRBO to comply with certain rules would take care of the county’s dilemma, Corrigan hoped.

“If we had true transparency that included a provision that would require platforms to remove a listing if a listing is in violation of local zoning ordinances, that would accomplish most of what we need,” Corrigan said.

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