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Council looking at zoning as way to control short-term rentals

Can full-time residents always have STR licenses?

By Mark Reaman

Understanding that there is no perfect solution that will please everyone, the Crested Butte Town Council is continuing to try to determine the best way to somehow limit short-term rentals (STRs) in town.

Council passed an ordinance in February that deals with the licensing, enforcement and regulation of STRs, but finding a way to somehow cap STRs in town is proving to be a challenge.

The town council directed town staff on February 15 to look at ramifications of maintaining and enforcing the current zoning that prohibits STRs in several town zones while legally allowing STRs in the B-1 and B-4 zones. Those two business zones currently do not allow such rentals.

The council also wants to see how to allow property owners with STR business licenses in zones where short terming is not technically permitted to continue to rent the property as long as the current owners use the property as a rental at least once a year and as long as they own the property.

In a bureaucratic oversight, the town has issued 58 such licenses in prohibited zones. No more STR business licenses are being issued by the town in prohibited zones. The council also wants to have staff, particularly town attorney John Belkin, look at the option of letting “primary residents,” those property owners who are full-time Crested Butte citizens, be exempt from any possible future cap on STRs.

Council will mull over the information at the March 6 council meeting. A special meeting was held Wednesday, February 15 and the five participating council members took public comment and discussed the issue for about two and a half hours. Two members of the council, mayor Glenn Michel and councilwoman Laura Mitchell, have recused themselves from the ongoing discussion since they both hold STR business licenses in prohibited zones.

Utilizing a staff analysis of the various options to limit STRs, the council seemed to drift away from opening up STRs in every zone and placing a cap on the number of nights dwellings could be used as rentals. They seemed more inclined to want to limit the number of properties that could be used as STRs in town and that led them to focus on the current zoning situation.

“This has been an ongoing conversation and it has been a difficult policy discussion,” said mayor pro tem Roland Mason, who ran the meeting. “Since we passed the ordinance regulating short-term rentals, we owe it to the community to focus on the limit discussion and really dig into it. Let’s remember that it took Denver two years to get where they are.”

“What’s tricky about this is having commercial activity in a residential zone but the commercial activity is letting people sleep there, which is what you do there anyway,” said councilman Chris Ladoulis. “It’s not like opening up a nightclub or selling power tools in a residential neighborhood, which would be easy to spot.”

“I think what we passed at the last meeting will right a lot of this by itself,” said councilman Paul Merck. “And I think the economy might change over the next four years and have an impact to help right this.”

“A stated council value is to maintain a real community and that is an argument in favor of restrictions,” said councilman Jackson Petito.

Property manager Steve Ryan cautioned that even in the regulation ordinance that was recently passed there were elements that could have unintended consequences. For example, he said, the neighborhood notification provision could end up “pitting neighbor against neighbor” and that would tear apart the fabric of the community.

Resident Susan Eskew asked the council to understand how hard it is for the Crested Butte middleclass to stay in town. She said she has short-termed her house in the past and had good experiences. “For me to be able to maintain a house in town, VRBO allowed me to do it. I’m not getting rich but it helped me with my mortgage payment,” she explained. “The middleclass here is hanging on by their fingertips and house prices just go up, up, up. That’s what makes it so hard. There has been a paradigm shift.”

Resident Scott Truex said the council should be wary of opening up STRs to high-density areas of town. “That’s where locals can afford to live. What you have works. Instruct the staff to enforce the current zoning and put this behind you,” he suggested.

Alan Bernholtz has been a landlord in town for more than 25 years. He owns property in the B-1 zone and told the council that might be better suited for short-term renting to tourists instead of making it for long-term renters. “It is a business district, after all. I know it is a difficult decision and you won’t make everyone happy. It sucks but you signed up for it so go for it,” he said.

Resident Jim Starr made many suggestions but told the council they were losing people who live in town. “The elephant in the room is the legal threat against the town. I think this community will stand behind you if you get sued. So pick a low number to begin with. Residents here will have your back and perhaps even pay an extra tax to fight that. Start with a low number and don’t put a cap on residents.”

Holly Harmon said it was hard for her to understand “why the current rules are not being enforced. It’s a rule on the books and seems pretty clear to me. The problem is clear and the data has been gathered. We are losing our community and I’m not okay with that.”

Longtime local and realtor Mindy Sturm said Crested Butte has heavily promoted itself as a tourist town so it is confusing for the council to now be sending an unwelcoming message to visitors.

“This is bad legislation. I still don’t know what the real problem is,” Sturm said. “The zoning is already thrown out the window since the town hasn’t enforced it properly. This legislation won’t lower prices in town or bring more workers to live here. And unless you are sure it is 100 percent legal, don’t pass it. The town is already in one lawsuit. Can it afford another? Jim Starr says raise taxes to pay for the legal fight. That will just make it more expensive for people to live here and will force more people out. Instead of spending time on this, think about focusing on ways to provide more affordable housing, like with tiny houses.”

“It is a complex issue. I’ve given up pretty much all hope of buying a house in town. I don’t have $1.2 million,” admitted Crested Butte renter Tom Barry. “I think there has to be a way for long-term renting to be on a level playing field with short-term renting,” he said.

“I don’t think this addresses workforce housing,” said Merck. “That is something we should focus on. I’m not a big fan of more restrictions. We have a lot already.”

“There are a lot of arguments to do nothing but we can’t put our heads in the sand,” said Ladoulis. “Let’s tackle the hard issues like what to do with the non-conforming business licenses in the prohibited zones.”

“After hearing everyone tonight, I’m having as hard a time as ever with the issue,” said councilman Jim Schmidt. “I’m not in love with limiting the number of days.”

“For me the problem we’re trying to solve is keeping people living in town,” said Petito. “I want kids to be able to walk to school. It is important to keep voters in town.”

Knowing that four of the five members will have to find common ground for a successful vote, the council members all leaned toward maintaining the current zoning while legally allowing STRs in the B-1 and B-4 zones. They want to protect those who currently have STR business licenses in prohibited zones and investigate whether full-time residents in any zones can be exempted from any prohibition. And with that, the council will continue the discussion at the first meeting in March.

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