Wednesday, December 19, 2018
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CB council looking at other ways to address STR issues

Limiting number of nights and enforcing current zoning on the table

By Mark Reaman

The Crested Butte Town Council has not been able to settle on any new regulations regarding short-term rentals (STRs) in town but it is now looking at two new tracks to address the issue.

Council wants the staff to investigate the viability of capping the number of nights any STR in town can be rented, and they want more details of zoning laws currently in place that actually prohibit STRs in certain areas of town, including some residential neighborhoods.

The council took a lot of public comment on the STR issue Monday night and heard both sides of the debate. More than 50 people attended the meeting. Several questions were pondered by the council and public: What is the problem that needs to be solved? What is the tipping point where too many short-term rentals negatively impact the unique qualities of Crested Butte? How does the town respect people’s private property rights without destroying the elements that make the town attractive as a tourist destination?

“This issue has been very vexing for the Town Council,” admitted mayor Glenn Michel at the start of the meeting. “There are strong arguments for private property rights and monetary issues and at the same time arguments for preserving the character of the town. It is very challenging for the council. Every one of us in this room loves Crested Butte and we all need to earn money.”

“It has been challenging,” agreed councilman Chris Ladoulis. “No one wants to prohibit all short-term rentals. But no one wants to be the last house in the neighborhood that is surrounded by short-term rentals. I wouldn’t want to live there. There is a point when there are too many STRs. How much is too much? There is probably a solution to preserve the community we want.”

“This is not a black and white issue,” reiterated councilmember Jim Schmidt. “The ‘rights’ issue is not just about property rights, but also the right of all people to enjoy their property. We have zoning and zoning is about limiting rights.”

“We don’t, for example, allow pig farms in residential neighborhoods,” Schmidt continued. I’ve gone back and forth on the limiting issue and I’m not sure what it would really accomplish. Could it simply lead to a neighborhood of dark houses owned by second homeowners? Would people just find ways to cheat? Businesses like VRBO have really exacerbated the issue.”

Following the heart instead of the wallet

“This conversation is going on all over the country,” added councilwoman Laura Mitchell. “We don’t want the community to turn into one big hotel room.”

“In my view, this STR issue will change the community over the next 10 years more than anything else,” said Michel. “It is very alarming. I understand that STRs are good for retail and restaurants and the economy. But the reason I moved here was because I have a passion for this place and want to retain a real community. We all want to have neighbors. Our town never went wrong when following our core values instead of economic greed and self-interest. The council needs to consider the greater good. We don’t want to dilute the essence of what we love about Crested Butte. I don’t want my neighbors renting their homes 365 days a year. There is a tipping point. What is it? When is too much, too much?”

“I think where we land on this ultimately relates to zoning,” said Ladoulis. “Zoning in this town makes it clear what people can do in certain places. Don’t be surprised if we have to address zoning.”

Michel emphasized that the council was aware that regulating STRs wouldn’t make a big dent in the affordable housing market. He said it also would not compel most second homeowners to open up their houses to long-term rentals.

From the staff perspective, town building and zoning director Bob Gillie said the percentage of STRs had been increasing significantly since last spring when council discussions on the issue began in earnest. He said with new marketing tools like VRBO and AirBnB, the numbers have also increased. “It is undoubtedly changing the character of the community,” he said. “Is it bad? That’s up to everyone to decide.”

Public comment

The chair of the citizens committee appointed to come up with STR recommendations, Alex Fenlon, presented the council with a letter signed by 35 residents simply stating that there is a point at which STRs are harmful to the community. The letter asked that the council address the situation.

“There are pros and cons to both sides of the issue,” admitted Fenlon. “Maybe the committee recommendations are not perfect. But something needs to be done. The short-term rental business model is powerful, and investing in Crested Butte is cheap compared to other mountain resort communities like Vail or Aspen. The industry is young, but already in Crested Butte 27 percent of the homes have STR licenses. Who knows how high it can go?”

“So what is the problem that needs solved?” asked Michel.

“The problem to me is if this continues unfettered there won’t be enough people living in the houses of Crested Butte,” Fenlon responded.

Resident Jeff Scott said he too was not against all short-term rentals, but he wanted the council to consider the negative impacts associated with STRs. He described Aspen when he moved there with his family as a kid in 1975. By not putting on some constraints, he said, Aspen turned from a great community to a very different place that forced local people out.

Committee member Dan Escalante said legislation can reflect community values. He used as examples the town having unique regulations on the books like horizontal zoning and the tree ordinance that requires people to replace trees after they are cut down if they are a certain size. “Overall, there is a point when it is just too much and we need to figure out what that point is with short-term rentals,” he said.

“I would urge you to do something,” said resident Holly Harmon. “It was apparent to me taking the kids around on Halloween. There were not a lot of houses giving out candy for trick-or-treat. This is a big deal to me. I think it will only get worse.”

“I want to keep my neighbors and those relationships. My neighbors and my community are why I am here and I don’t want to lose that,” said resident Kyle Ryan, describing other resort towns that now feel like ”Zombieland” because too few people actually live in the community.

Elk Avenue homeowner Ben Oldread said he lives next to a short-term rental property and he has had some issues with the regular stream of tenants. He said while many were nice people, others were disrespectful and he described some threatening confrontations, primarily over parking.

Property manager Steve Ryan said he manages the house in question and diffused the confrontational situation after the fact when he learned of it. He said action was taken to address the parking and trash issues and he had not heard of any other issues since.

The times are a-changin’

“The town is changing and it is not easy to deal with,” Ryan continued. “As Alex [Fenlon] stated at an early committee meeting, ‘The days of the $12 an hour dishwasher being able to live in a million-dollar house on Sopris Avenue are over.’ He’s right. It’s not anyone’s fault, it’s just the way society has moved. To say all renters are bad is wrong and it is just the way that this society has progressed.”

“The days of the $12 per hour dishwasher may be gone but we have to try to preserve the place so that people want to come here to visit and stay,” said Emily Montesinos. “I think we need to fight to create more long-term housing. Look at other options for people in the community. Be creative.”

Priscilla Palhava said the town has changed, and when she arrived in the 1990s there were brutal off-seasons and low-paying jobs. She said the high cost of living in Crested Butte is also a factor in pushing people, especially families, down valley. “Crested Butte is booming now but it was not always like it is now,” she said. “The seasons are longer with more people coming here and some of them renting in town. I had experience with long-term rentals and it was not good. There were a lot of headaches. Also think about the fees in town. They are very high and it is hard on locals trying to make it here to build in town. So they go to Crested Butte South where they can get bigger houses for less cost. See how lively town would be without VRBOs.”

Attorney Marcus Lock represented a group called Crested Butte Owners Supporting Sound Housing Practices and he told the council it is difficult to solve a problem when there isn’t hard data to support a solution. He said slowing down the process and implementing some regulations and higher licensing fees could in fact retract the number of STR business licenses issued by the town.

“And consider the doctrine of unintended consequences,” he told the council. “Implementing a cap could lead to only the über-wealthy, who have no desire to short-term rent the property, buying the houses in town. Maybe the number of dark houses would explode. I would encourage the council to move slowly and look at the data after generating the initial regulating steps. And think about being fair with all property owners. Everyone should be treated equally. The number of STR licenses is still going up because we are all still talking about it. Act cautiously, not precipitously.”

“Short-term rentals should not necessarily be grouped into one clump,” suggested resident Johnna Bernholtz. “Look differently at primary residents who do it, for example. Priscilla is right in that town fees are contributing to pushing people out of town. And how can the council vote on regulating this when the majority of the council members have these permits? That seems like a conflict of interest.”

Real estate agent Mindy Sturm said she was basically a $12 per hour ski bum when she arrived in Crested Butte but now has a home and a business. “I remember when the houses were dark and winter was busier than summer. STRs will not change the fundamentals of town. It is actually property values that are doing that. Eliminating STRs won’t solve the fear being felt by people. It won’t open up more houses for long-term rentals. Property values are changing the dynamics. What we’ve created here is a paradise people want to come and enjoy. We’ve created that.”

Eric Davis short-terms his house and said his neighborhood has a mix of uses. “If VRBO is a business then keep them in the business districts,” he suggested. “Use zoning to regulate the issue.”

Will Dujardin said he agreed with the idea of a cap with STR licenses. Living in a neighborhood with STRs, he said the impacts weren’t too bad but a visiting sleepwalker wandered into his house, which he described as “interesting.” He said perhaps homeowners could be persuaded through tax incentives to long-term rent their homes.

Property manager Shay Wyckoff reminded the council of Crested Butte in the not-so-busy days when off-seasons were long and jobs were in short supply. “Short-term rentals bring people into the restaurants and into the local shops,” she said. “We need to keep elongating the seasons to keep locals living here. Be careful to not wreck the opportunity for people living here.”

Real estate agent Molly Eldridge said people buying property in town love the community. “Their goal is to usually spend as much time as possible here. Long-terming would not allow that to happen,” she explained. “No one buying a home in Crested Butte is getting rich from renting it, but it might help with some costs. So there is a valid concern that you would make it so only the über-rich can afford to purchase property in town. I agree we need places for the $12 an hour dishwasher to live but don’t agree with the attitude that everyone deserves to live in town.”

Resident Mike Linehan said he is on both sides of the issue. He is impacted by people renting in his neighborhood, and he and his wife own a short-term rental in town. “There is no easy answer and I sympathize with you guys,” he said. “I have no problem with higher usage fees, and if there are negative impacts on neighbors, people should be hit hard through enforcement. Put some meat in the parking and noise regulations.”

Chris Mackie of Vacasa vacation rentals asked the council to enforce current regulations on the books and be clear about new regulations. “Give people clear expectations and get everyone on the same page,” he asked.

Matthew Verona suggested only people living in a home should be allowed to rent the home.

Mark Ewing agreed. “The town is getting emptier and it is sad,” he said. “It is an amazing thing to grow up in a small town where everyone knows one another. It’s going away in this town. Kids are growing up maybe in Crested Butte South instead of Crested Butte.”

Digesting the comments

“You’re all hearing what we are dealing with and it is a vexing problem,” said Michel. “Is there a way to go forward?”

“The long-term rental and the STR issues are different animals,” said Mitchell. “I want some time to digest all the public comments.”

“I am hearing that STRs are putting pressure on the prices of homes in town,” said Michel.

“I see it more in the condos or places where locals might have bought something,” said Mason. “It’s not impacting the million-dollar homes.”

“We do need more data,” agreed Schmidt. “I agree with the idea to look at limiting the number of days a place can be rented in a year as a consideration. I think we can continue this discussion but pass the proposed regulations dealing with things like noise and parking. And we need access to a local contact 24/7 when there are issues.”

“There’s not much disagreement on the facts. I would rather not do nothing,” said Ladoulis. “The town has done things to make prices rise. The sizes of structures are limited. The footprint of town is small. People want to buy in town. I’d like to find what we can do to keep town desirable (for locals) for a longer period of time. We need to find a collective solution. Let’s take small steps but let’s do something.”

“I would entertain how zoning could address the issue,” said Mason. “And I like the idea of exploring a limit on the number of rental days. What’s the legality of that? Moving cautiously makes sense. Thinking 15 years down the road, if we don’t have some restrictions in place, a corporation could come in and buy four, five or six houses in a row and make them all STRs.”

“The core issue is zoning,” emphasized Ladoulis. “At what point is a house a commercial entity in a residential zone?”

“When does a residence turn into a business?” asked Michel. “I’m afraid of a preponderance of motels in a neighborhood. But I’m not necessarily in favor of caps that create winners and losers. What is the tipping point of too many rentals or too many rental nights? Are houses being rented 60 nights a year? A hundred and fifty nights? Ten nights? Can staff gather that information? When does a short-term rental go to being a commercial enterprise?”

“It’s an idea worth exploring,” agreed Schmidt.

“You’d be surprised—it’s not as many as you probably think,” contributed Ryan.

Current zoning could already limit some areas

The council also discussed the current zoning that does not allow STRs in certain areas, including residential zones. But the town had issued business licenses to 33 households in such prohibited zones. The Verzuh Ranch annexation is one such area where STRs are not allowed under zoning but some people have STR licenses. The M (mobile home) district is another.

“Ordinance 12 dealing with the nuts and bolts of regulating and licensing also relaxes STRs in town. And we have been discussing tightening it all up,” noted Mason. “Current zoning prohibits short-term rentals in some neighborhoods already.”

“We might already have the tool to limit them,” said Michel.

“We have limits in place now and we need to discuss that further,” said Mason. “What are the impacts of upgrading that zoning?”

“I don’t have an opinion on this yet,” said Michel.

“It was an oversight when Verzuh zoning was created,” explained Gillie. “Some of the other zones [in similar situations] are more nuanced. The fairness question comes into play.”

“It could have been intentional at the time,” said Michel.

The council decided to end the discussion to gather more information and continue the debate at the December 5 council meeting.

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