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CB Town Council votes to limit short-term rentals in a split vote

STR license fees next discussion

By Mark Reaman

Crested Butte Town Council discussion over restricting short-term rentals (STRs) in town has gone on for more than a year, and the council voted Monday by the slimmest of allowed margins, 3-2, to enact an ordinance to restrict the number of STRs in town.

But the discussion isn’t over, as the license fees in the two-tiered system will be in front of the council as early as next month.

On Monday the council agreed to include homes located in the Verzuh annexation neighborhood (the R1D and R1E zones) to be part of the zoning that allows property owners to obtain licenses with no cap on the number of nights the property can be short-term rented. But the council will set a ceiling of allowing no more than 30 percent of those homes to obtain such an “unlimited” STR license. Once the 30 percent mark is reached, a waiting list will be started.

Any homeowner who has their primary house in Crested Butte (with the exception of deed-restricted units) will be able to get a license that allows them to short-term that house for a maximum of 60 days per year. They can also rent to one tenant for longer than 30 days and that would be considered a long-term rental and not fall under STR restrictions.

Those obtaining a primary residence license will have to sign an affidavit swearing they are a primary resident of the town. Deed-restricted units will not be allowed to short-term rent.

In zones where STRs are not currently legally permitted the council will “grandfather in” those with active short-term rental business licenses that were previously issued by the town. STR licenses are not automatically transferred when a property sells.

The bottom line is that of the town’s current 938 non-deed restricted houses, 668 could be allowed to be short-termed for at least two months. Of course that is not likely unless every primary resident in town obtains the 60-day license and every house that gets an unlimited license in the allowed zone is a non-primary resident.

“This is a good compromise,” said councilman Jim Schmidt, who favored moving the Verzuh area into the unlimited category. “It helps locals who are looking for some financial help with their mortgage by giving them at least 60 days to rent their place. It sets a limit of 30 percent for the number of property owners that can rent their homes on an unlimited basis. This is slightly different from other places dealing with the same issue and I think it will work.”

Resident Diana Graves voiced a desire to not allow Verzuh homes to rent on an unlimited basis. “The feel over there is one of neighborhood and families,” she said. “I don’t want commercial enterprises there with constant short-term rental use. I’d prefer to preserve the neighborhood and sense of community.”

Citizen Liz Sawyer read a statement from neighbors Todd and Caren Carroll. They said having STRs in the neighborhood had been a positive experience. “STRs also provide a large benefit to locals needing to supplement their income,” she said.

From her perspective, Sawyer agreed. “The R1D and R1E zones should be treated like the rest of similar neighborhoods in town,” she said. “When we had a license it certainly helped with the big mortgage.”

Charlie Slater bought a house in Crested Butte in 2004 and is hoping to move into it permanently someday. In the meantime, short-terming the house helps pay the mortgage. “I still don’t understand the problem that is trying to be solved,” he told the council. “Putting limits on these could have a big financial impact on homeowners. This house is our primary investment.”

Menon Billingsley agreed. “We love our neighborhood and have become friends with people who rent there,” she said. “We prefer houses with lights over dark houses not being used. We never dreamed that anyone would tell us what to do with our house that we can barely afford. I struggle with the idea that the [Verzuh area] is not being treated like other parts of town. Living here is difficult. We aren’t trust-funders. We don’t see the problem as a young family. We are for equalizing the zoning and with fewer restrictions.”

“I understand this is a resort town and almost everyone who bought a home bought it as a primary investment,” said councilman Paul Merck. “I have a hard time restricting people’s property rights.”

“I heard from people living in the Verzuh neighborhood and they were pretty clear what they wanted,” said council member Jackson Petito. “I’m comfortable adding them into the overall unlimited zone. But I am also in favor of lowering the cap from 30 percent. We can start low and raise it later if needed. It is hard to go the other way and lower it again.”

“I would prefer raising the limit on the primary residences from a maximum of 60 to 120,” suggested councilman Chris Ladoulis.

“This is a compromise that won’t make everyone happy,” said Schmidt. “It allows for some room to grow.”

“I’m comfortable with the 30 percent limit and the 60 days for primary residents, given they can rent it longer than a month and not have it be counted against STR nights,” said mayor pro tem Roland Mason, who ran the meeting since both mayor Glenn Michel and councilwoman Laura Mitchell recused themselves from discussion. They both hold STR business licenses in zones where STRs are not allowed.

“I am okay with R1D and R1E fitting into the rest of the unlimited zone,” continued Mason, “but I think in the future people over there will wish there weren’t STRs there. But I’m willing to open it up now. I think STRs are helping to provide some of the healthy sales tax the town is seeing. I’m comfortable where we are now. The caps we are passing won’t affect anyone currently.”

Because two of the seven council members recused themselves from voting on the issue, a simple majority was needed to pass any motion. And that’s what happened as Schmidt, Mason and Petito voted for the ordinance, while Merck and Ladoulis voted against it.

The fee for both sets of licenses will be set based on what it costs to run, inspect and maintain the STR program in town, including the cost of monitoring software. Town manager Dara MacDonald said the fee discussion will likely come before the council sometime in July.

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