Steamboat continues work on short-term rental rules while wondering if new policy will reduce numbers
As the Steamboat Springs City Council and Planning Commission hash out the details of a new short-term rental policy, one of the biggest challenges will be determining whether existing short term rentals should be allowed to continue operating or whether steps should be taken to reduce the current number.
While final maps and decisions have not yet been made, any new short-term rental policy will likely include three zones — a green “by-right” zone in which there are no restrictions, a yellow zone with a cap and possibly other restrictions, and a red “prohibited” zone.
The yellow zone will likely be divided into smaller zones, each with a different maximum cap number set on short-term rentals.
But, as asked during city council’s March 8 work session, if the approximately 3,000 current short-term rentals are allowed to continue operating — given they aren’t breaking any rules under current law — how does that do anything to reduce the number of short-term rentals in Steamboat?
On Monday, March 28, the planning commission will delve more deeply into the creation of the green, yellow, yellow sub zones, and red zones, as well as looking at more specific numbers for what caps in those yellow zones might be. Council members will also likely discuss other potential measures, such as allowing primary residents to rent their homes for a certain number of days per year.
In all likelihood, “hosted” rentals — or primary residents who rent out a room in their house while they are still living there — will be exempt from any restrictions.
In April, council is planning an executive session to better explore the legal implications of two paths — offering “legal nonconforming” status to all existing short-term rentals or pursuing a mechanism that would disallow current operators.
In the context of short-term rentals, “legal nonconforming status” means the use was legal under the established code at the time, explained Steamboat Springs Planning and Community Development Director Rebecca Bessey. Once officially registered as “legal nonconforming,” that use would be permitted to continue.
Right now, short-term rentals in multi-family units — three or more — are not required to have licenses, nor are there any restrictions other than in the strictly prohibited areas.
The question of what will happen to existing rentals really only applies to the yet-to-be-determined “yellow” neighborhoods, where the plan is for short-term rentals to be allowed but restricted.
If all existing short-term rentals in the yellow zone are granted “legal nonconforming” status, then reduction would only happen as those operators cease to operate or lose their licenses due to violations, Bessey said.
The way it is written now, she explained, if operators were granted the legal nonconforming status, that designation would stay with the property if it’s sold, not the owner. However any license would be tied to the owner.
When it comes to zoning changes, “It’s not often that you have immediate, overnight change,” Bessey noted.
Regardless, under forthcoming policy, all short-term rentals in the city will be required to be licensed, provide a 24-hour contact person and adhere to whatever new fees, licensing and enforcement rules the council ultimately decides.
The council is still in the process of deciding the parameters and process that could lead to an operator losing their license — such as repeated and legally verified violations, or a gap in time of operation.
And those new licensing requirements are significant, Bessey noted, especially in terms of tracking and enforcement.
“Right now, if someone calls the city or the police to complain about the short-term rental next door, we wouldn’t even know who manages it or who to direct the complaint to,” she said.
Even in the green “by-right” area, changes may include a new restriction on the number of guests allowed in each unit at a time.
Right now, the only short-term rentals required to have a license are “vacation home rentals” — single-family homes or duplexes that are not in the existing green “by-right” area and are not in the currently prohibited “red” areas.
District III council member Heather Sloop expressed dismay at the March 8 meeting regarding the number of existing short-term rentals in her district, and the difficulty of the dilemma: If those units are all granted “legal nonconforming” status, the community won’t see a reduction even with policy change — at least not in the near future.
“There are a lot of property owners renting unlicensed units because there was no license for a very long time,” said Council member Joella West. “And I can’t see how in good conscience the city could come to any of those people and say, ‘You know, we have decided that in this particular sub zone, there are too many short-term rentals. And either you’re out of luck, or you are going to have to enter a lottery that will determine whether you can continue to do what have been doing for 15 or 20 years.’”
If the commissioners and council members decide to go forward with a cap in those restricted areas, “It all depends on what the number ends up being,” Bessey said.
“And that’s still a conversation the planning commission needs to have,” Bessey continued. “Whether they set it at the existing number, whether they want to go up or down in any certain area. And then we will have to figure out how to implement that — whether that’s a lottery. Whether that’s getting everybody registered and licensed and fit within the cap.”
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