Steamboat continues discussions on where short-term rentals should be allowed, restricted or prohibited |

Steamboat continues discussions on where short-term rentals should be allowed, restricted or prohibited

The area surrounding Walton Creek Road is home to a mix of short-term rentals and locals’ housing.
John F. Russell/Steamboat Pilot & Today

Steamboat Springs Planning Commission on Tuesday continued discussions about about which short-term rentals could be grandfathered into a future overlay zone restricting nightly rentals.

Tuesday’s commission meeting was part of a longer discussion the city is having around how short-term rentals should be regulated.

In order to receive the status, the rental would need to be lawfully established before an overlay zone was created.

Rentals that exist illegally, which the city has estimated is at least hundreds — if not thousands — of units, would not be eligible to suddenly be granted legality if placed in an overlay zone.

What is an overlay zone?

As part of their ongoing discussion around how to regulate short-term rentals, Steamboat Springs City Council tasked planning commissioners with drawing overlay zones where short-term rentals will likely fall into one of three categories — allowed without restriction, restricted or banned altogether.

When the commission eventually draws an overlay map, the map will be presented to City Council, which will decide whether to approve it.

The commission has not made any final decisions yet, but commissioners have expressed support for much of the city falling into the yellow, or restricted, zone. Under that criteria, short-term rentals would be allowed only under specific circumstances.

If council chooses to pass overlay zones, those in the yellow zone will be able to operate a short-term rental in the following cases:

– A homeowner wanting to rent a room or basement in their primary residence

– A homeowner wanting to rent their house for a limited time while they are out of town

– A homeowner with an existing vacation home rental permit

Steamboat Springs Planning Director Rebecca Bessey emphasized that the yellow zone is not a ban but a series of restrictions.

“We hear a lot of public comment that these short-term rentals are just going to be banned,” Bessey said. “Not every short-term rental that exists in the yellow zones will be out of compliance.”

What does the community want?

Throughout the past six months that Steamboat has discussed short-term rentals, residents who have commented in city council meetings or emailed city officials to express their thoughts have usually fallen into one of two categories.

One of the categories includes real estate agents, second-home owners, property managers and those who want to rent their house advocating for short-term rentals. The other group is usually primary residents claiming that short-term rentals are taking housing stock from the workforce and bringing noise, excess trash and other nuisances to residential neighborhoods.

Those who have spoken to City Council fall primarily into the first category and support short-term rentals, but planning commissioners said they believe most of the city wants heavier restrictions. Several commissioners pointed to the recent City Council election, in which all four elected members were in favor of stricter regulations around nightly rentals.

“People wanted more restrictions and restricted areas,” said Commissioner Jessica Hearns. “We’re trying to solve a problem that we’ve heard some describe as a crisis, so something more restrictive would get to that goal faster, I think.”

Commissioner Jeff Steck agreed with Hearns, adding that he felt the commission is supposed to represent residents who live and work full time in Steamboat, not second-home owners who want to short-term rent their properties.

“Talking to the people in town, what I hear is people want zero short-term rentals grandfathered in,” Steck said. “Some outside property owners want to continue as is, but we do not represent outside property owners; we represent the residents of Steamboat.”

In contrast, Commissioner David Baldinger Jr., a real estate agent who ran for council and lost to Gail Garey, felt the commission represented all property owners, including those who own second homes in town and oppose new restrictions.

“It’s wealthy elites not renting property long term, not renting it short term and just using it for their own personal usage a few weeks a year,” Baldinger Jr. said. “I think that’s where this is likely to go, and restricting short-term rentals is not necessarily going to create more long-term housing.”

Where to draw the lines

During Tuesday’s discussion, commissioners did not delve into specific neighborhoods and what type of restriction they should be placed in. However, several planning commissioners did discuss the area around Walton Creek Road, colloquially known as “condo land.”

When they were built, many of those condos were intended for second-home owners to purchase and rent nightly to tourists. Over time, however, young locals buying their first property turned to the area. Steamboat Board of Realtors President and decadeslong local Ulrich Salzgebar told City Council last week that those who once rented nightly are now renting long-term to the workforce.

“These were all condo units that were built specifically for short-term rentals, now the vast majority of those are used for locals housing,” Salzgebar said. “That’s fantastic, but it’s taken inventory out of the short-term rental market, and now we’ve taken three hotels off the market, so my question for you is, ‘Where would you like our visitors to stay?’”

Furthermore, the city’s planning director told commissioners that the “condo land” area is difficult to put in a color because of its proximity to Steamboat Resort and its usage for locals.

“We wanted to try and ensure that we do have some multifamily residential uses in our community that are not completely open to short-term rentals,” Bessey said. “The thought being that there should be some sort of dividing line. At some point, those areas trend more toward locals than resort-type lodging uses.”

Waiting for data

Those not supportive of regulations have repeatedly asked City Council to hold off on making decisions until all data is collected on where short-term rentals exist and what problems they may be causing.

“The data allows you to pinpoint where the problems are, address those and allow everyone to continue this great asset to the community,” Moving Mountains CEO Robin Craigen told council last week. “I do think that the overlay zone feels that we’re rushing into action.”

On Tuesday, some commissioners said they felt like the calls to “wait for the data” are a distraction meant to kick the issue down the road.

“They’re not giving us the data we need; they’re telling us to stop acting irrationally,” said Commissioner Rich Levy. “I haven’t heard that from the people that want more restrictions on short-term rentals.”

Finalizing an overlay

Bessey will begin working with the city attorney’s office to draft an overlay zone map for planning commission’s approval, which the commission would discuss in the next several months.

Once planning commission approves an ordinance, the ordinance will be taken to City Council for approval. City Council members have not discussed overlays in-depth, and no members have indicated how they will vote on the matter.

At last week’s council meeting, some members of the public claimed that an overlay zone would be a legal nightmare for the city, including one resident who threatened to sue the city.

“I don’t believe I’ll be changing anyone on the council’s minds today, but I am here to tell you that I will fight on the better end, even if that means seeking protection in the courts,” resident Kevin Bronski told council members. “Many will join, and the city will lose in court.”

Still, the city holds restricted zones for other topics: Businesses cannot be built in residential neighborhoods, the city’s industrial zone must be used for industrial needs, and houses cannot be built too close to the airport.

City Attorney Dan Foote said zones restricting short-term rentals are no different, and he was confident a judge would side with the city if it goes to court.

“This is essentially zoning, and for almost 100 years in this country, the courts have recognized that people’s rights to own and use their property are subject to reasonable regulation,” Foote said. “There have been a number of other states that have acknowledged that short-term rental uses are different in nature and impact from long-time uses. Therefore, you can distinguish between those uses when you adopt zoning regulations.”

Support Local Journalism

Support Local Journalism

Readers around Steamboat and Routt County make the Steamboat Pilot & Today’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.