Steamboat City Council votes to end vacation home rental application moratorium Oct. 31

Editor’s note: This story was edited to reflect that the vote to end the moratorium was not unanimous. It was a 4-2 vote.

A moratorium on vacation home rental permit applications enacted by Steamboat Springs City Council in June will expire Oct. 31, following a 4-2 vote Tuesday.

Jason Lacy, Heather Sloop, Kathi Meyer and Lisel Petis voted in favor of the motion, and Michael Buccino and Robyn Crossan voted against it. Council member Sonja Macys recused herself from the discussion and vote because she owns a permitted vacation home rental.

Council first voted on an ordinance to extend the moratorium into December, but the measure failed to move forward because of a tie vote. Petis, Sloop and Meyer voted in favor of the extension, and Lacy, Buccino and Crossan voted against it with the intent of letting it expire Sept. 8. Council rules state that if members tie on a motion, the motion dies.

Council then voted to extend the moratorium to Oct. 31, and that motion passed.

Before casting their votes, members listened to nearly two hours of public comment from dozens of residents, most of whom were short-term rental owners, property managers or property owners who spoke in favor of short-term rentals.

The discussion was largely a continuation of a discussion council had last week on creating overlay zones, or neighborhoods in which short-term rentals could be prohibited.

Options and timeline for short-term housing regulations

Steamboat Springs City Council has several options for regulating short-term rentals, though they have so far only discussed a few.

• Contracting with Granicus was City Council’s first priority, and Planning Director Rebecca Bessey said Granicus will begin enforcement in the next few months.

• At their work session last week, council members directed Bessey to begin drafting an ordinance to create two overlay zones — one to allow short-term rentals by right and one to prohibit them completely, though council members expressed interest in allowing exceptions in prohibited zones for certain times of year, as members said they wanted to give local homeowners an option to rent out their house while on vacation. The Planning Commission will vote on the ordinance Sept. 23, and council will take first and second votes on the measure after that.

• Council has informally discussed ways to incentivize long-term renting and disincentivize short-term renting, such as tax breaks or impact fees, but no decisions have been made on either of those strategies.

A tourism-based economy

Sarah Bradford, co-owner of Steamboat Lodging Co., said data compiled from KeyData, a data source the Steamboat Springs Chamber uses, shows the city collects about $250 million in revenue each year from tourists visiting town. If council were to enact overlay zones, Bradford estimated the city would lose about $25 million to $50 million.

“We’ve had no discussion about the economic impact that these changes might have, including on city budget, restaurants, retail, all of those sorts of thing beyond just the property management companies,” Lacy said. “That could be millions of dollars on the city budget, and I don’t have good answers for where we would cut our other departments.”

Both Bradford and Moving Mountains co-founder and CEO Robin Craigen said continuing the moratorium could put community members out of jobs.

“Visiting a community and staying in a short-term rental is an experience, and that experience has made our community what it is,” Craigen said. “It feels like you want us to be more professional, but then, we’re vilified when we’re more professional.”

Matthew Gallagher, owner of vacation home rental company AIR MGMT, said he pursued a career in property management at age 25, and a moratorium or overlay zones could negatively impact his business.

“There are so many locals that this is the way we feed our family,” Gallagher said. “Taking away from all the hard work that many locals in this community have worked for is not the correct answer.”

Lacy, who first voted to end the moratorium, said he was concerned about a “gold rush” of vacation home rental applications flowing into the city’s planning department from people who did not have the opportunity to apply in the past few months.

“The last thing we want is 300 VHR applications to show up,” Lacy said.

Short-term housing definitions

Each city zoning district currently falls into one of three categories of short-term rental rules:

• By right, meaning property owners may operate a short-term rental without permission from the city.

• Permitted, meaning property owners may operate a short-term rental but must obtain a permit from the city.

• Prohibited, meaning property owners may not operate a short-term rental.

• The city currently only regulates vacation home rentals, a type of short-term rental defined as a single-family or duplex unit where the entire unit is being rented, though City Council voted to require permits for all short-term rentals and contracted with a service called Granicus to ensure rules are being followed on all short-term rentals.

• Granicus will begin working with the city in the next two to three months, though Planning Director Rebecca Bessey said it will take longer than just a few months to ensure all short-term rentals are licensed and permitted.

In response, Bradford said many people may submit applications but not all will rent their property for much of the year, if they choose to do so at all.

“When you stop allowing short-term rentals, instead of encouraging long-term housing, you’re encouraging the uber rich that can afford to buy these homes to buy them and let them sit dark,” Bradford said. “I don’t believe we want to turn Steamboat into Aspen.”

The issue of property rights

Michelle Williams bought her home on Bear Creek Drive in 2018, with a plan to retire in the home one day. Williams said she and her family spent four months in the home in 2020 and supported the city’s economy during the COVID-19 pandemic.

To supplement the cost of owning the home until she can retire in it, Williams rents her home out to nightly renters when she is not living in it.

“We spent an absurd amount of money downtown, as we dined out almost every night,” Williams said. “We’re really good people, and we want to do the right thing and abide by rules and regulations set forth.”

Williams said once she receives a complaint about a renter, she is diligent in taking action.

“We’re hypersensitive to anything that goes on in our home,” Williams said. “We keep quiet, and we’ve been made out to be villains.”

The other side of the coin

The majority of those who spoke to council Tuesday night during public comment spoke out against a moratorium and overlay zones, but Petis said council, for months, has been hearing almost entirely from those who want more regulations on short-term rentals.

“I almost never get stopped in the grocery store, but this was the issue I was getting stopped over,” Petis said.

Debby Spiker, a resident on Meadow Wood Court, said she understands many property owners need to cater to short-term renters to help pay for their homes, but that choice infringes on her quality of life.

“I’m hearing a lot of self interest and financial ‘woe is me,’” Spiker said. “It’s not my fault that you chose to buy a home that you can’t afford without renting it out to carry the cost.”

Spiker said nightly renters have brought “destruction” into her neighborhood — as nightly renters are often loud, do not pick up trash and may cause other issues in neighborhoods traditionally home to full-time families and working residents.

“I get you want to monetize your home, but it affects me personally,” Spiker said.

Catherine Carson, a resident on Locust Court, encouraged council members to extend the moratorium and implement overlay zones to preserve the character of Steamboat’s neighborhoods without inviting in new neighbors each week.

“We’re not an Aspen,” Carson said. “We’re not just a resort. People move here because of our community.”

Zoning, HOAs and enforcement

Though there was disagreement on whether to extend a moratorium or implement overlay zones, council and citizens offering public comment agreed on one thing — licenses should be required for all short-term rentals, and the city should enforce issues that arise.

“This is really an enforcement issue in how we can come up with things that can work and address the issues brought up,” said Bob Milne, COO of Vacasa Steamboat Springs. “There are all kinds of ways we can work together to make sure we’re being good neighbors and enforcing the rules.”

As of right now, Steamboat Springs Police Department officers are tasked with responding to noise complaints, trash issues and bear calls in vacation home rentals, though the department does not keep data on how many of the calls they receive pertain to nightly renters.

Mike Koponen, a resident on Bear Creek Drive, said he and his wife recently had to call the police on nightly renters who were throwing a loud party, as they were afraid to confront the neighbors themselves due to a potential safety issue.

“I wasn’t about to go over and confront a group of people that I had no idea what state they were in, who they are, what kind of people they are and how they would react to being told to quiet down,” Koponen wrote in an email to City Council, which was included in Tuesday’s council packet. “I hated to call the police for this sort of thing, but they are better equipped than I to deal with this type of situation.”

In efforts to ensure officers are not tasked with enforcing complaints that may not be public safety issues, the city has contracted with Granicus, a short-term rental compliance company. City Planning Director Rebecca Bessey said it will take longer for Granicus to enforce complaints against short-term rentals that are currently unlicensed, as the company has to find them and require them to obtain a license before taking any real action.

Buccino emphasized the need for a “three-strikes rule” to hold property owners who do not enforce rules on their renters accountable once Granicus has helped the city license all short-term rentals.

“Having a VHR (vacation home rule) will be a privilege, and we can take that away,” Buccino said. “We do need to have teeth in it.”

Steamboat residents Marci Valicenti, Wendy Harvey and Steve Randall emphasized the need for homeowner associations to enforce their own rules around short-term rentals in advance of enforcement. All three said the decision to allow them should be up to an HOA, not the city.

“Determining whether a neighborhood allows short-term rentals is a rule for the HOA and the HOA only,” said Harvey, who resides on Old Fish Creek Falls Road. “It is the very purpose of the HOA to make rules.”

The six council members who participated in Tuesday night’s meeting emphasized that the moratorium has brought out more public comment than they had seen on almost any other issue, which they said was a positive result of a divisive issue.

“It stirred the hornet’s nest, and we got public input,” Buccino said.

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