Possibly limiting STRs to half the year
By Mark Reaman
While nothing is definitive and probably won’t be until at least January, a majority of Crested Butte Town Council members now feel homeowners in town should be able to short-term rent their houses for up to 180 days a year. This is the council’s latest attempt to somehow limit the amount of short-term rentals (STR) in town.
Such a move would not impact many, if any, houses currently in the Crested Butte STR pool, since renting a house that many nights annually is extremely rare in town. Mayor Glenn Michel said he felt such a lax limit was pointless and would essentially contribute to turning neighborhoods into hotels and would contribute to “losing the fiber of the community.”
The council opted to continue the first reading of the proposed ordinance to the December 19 meeting when details will be included in a formal ordinance. The council can choose to set the ordinance for a public hearing sometime in January and then vote on the ordinance.
In the discussion at Monday night’s meeting, councilmembers all felt that instituting safety and inspection measures for STRs was a good idea and those points will be put into the town code.
But the issue of whether or not to cap or limit STRs as a way to reduce negative impacts to the concept of “community” has been a discussion stretching back into last winter, including a council-appointed citizens committee to come up with recommendations on how to regulate and limit STRs.
As a result of the months-long discussion, the council is now leaning toward allowing STRs for most houses in town for half the year.
The council had received scores of emails this week from homeowners arguing against any form of limits on STRs. In an email, homeowner Peter Sherman pointed out that current town zoning allows “unlimited short term rentals” in the R1, R1A, R1C, R2, R2C, R3C and B3 zoning districts.
Town Council and staff said homes currently being used for short-term rentals will be “grandfathered in” and have the ability to maintain that “unlimited” status. Town attorney John Belkin indicated if a homeowner in one of those zones gave up its license the use would become a nonconforming use.
The council appeared swayed by the flurry of correspondence and thus settled on the 180-night limit. But they weren’t pleased with some of the points in the letters.
“We received a plethora of letters from people interested in protecting their money rights. One described the town as dysfunctional. That is offensive,” said councilman Jim Schmidt and he listed a number of positive things the town provides. “Maybe we’re dysfunctional because we don’t take kick-backs or something.”
“The majority of letters were concerned with investment protection and the positive contributions STRs make to the retail and restaurant base of the town and the jobs they provide,” added Michel. “I didn’t receive any emails or comments this week from people wanting caps on STRs. The letters we received this week were all valid, well-written with passionate arguments. But for me, this is about the forming of a community. It is about more than individual gain. If we all take a little, we might take too much.”
Michel said it was time for the council to make a hard decision and suggested it put an annual 90-night cap on short-term-renting a house in town.
“For me, I want to be clear the town is not saying the second-home community is not welcome,” said councilman Chris Ladoulis. “But we all seem to agree that in the future there is a tipping point if we have too many short-term rentals. If it were 100 percent, everyone would agree that is too many. We don’t want to disallow them completely, either. We are trying to find that middle gound.”
“The question is, do we want to cap STRs so neighborhoods don’t turn into de facto hotel zones?” asked Michel. “When does renting a house in a neighborhood turn that house into a business?”
“I don’t think we have enough data,” said councilwoman Laura Mitchell. “I feel like we could be overstepping our bounds on private property rights. Limiting them to 30 or 60 days is overreaching. We are wading into these waters without the data. I’m not in favor of a 90-day limit. Maybe 180- or 200-day limit. I’m not sure of the magic number.”
Local property manager Steve Ryan of Ironhorse Property Management sat on the citizens committee that studied STRs. He provided the council with some numbers. He said of the 13 houses he has managed in the town more than a year, the average number of days they rent is probably about 120, with the high end being 140.
“For me, if STRs continue to proliferate, we could see the tipping point. I don’t have a problem with what is going on now,” commented councilman Roland Mason. “If we get to the point where Crested Butte is one big hotel, we’ll have an issue. For me, I’d say the 180-night suggestion works because it is not even close to the highest number of days for a rented house in town.”
“It is hard for me to put a cap on without hard data on loss of revenue,” said councilman Paul Merck. “This is a business we’ve built up in town. We continue to ask people to come visit here.”
“What is the right number for a cap?” asked Ladoulis. “I don’t know. But when you move the number to a half a year, it is easier to defend. If something were rented for more than half a year, it would probably meet the test of being a business in a residential area. I’d be comfortable with the 180 number.”
“If something in Crested Butte is rented 180 days, it is a hotel,” countered Michel. “Council is saying they are okay with this. The idea of needing more data? We’ve talked about this ad nauseam. Every homeowner in town should be concerned that every neighbor can rent out their houses for half the year. I think 90 days is a fair compromise for people to make some extra money but it doesn’t make your house a hotel in Crested Butte. The council is kidding themselves if they think 180 nights is legitimate. Why even do it then?”
“Because saying 360 days a year is very different,” responded Ladoulis.
“Any cap or limit will be very difficult to enforce,” added Schmidt who indicated there should perhaps be no limits legislatively imposed. “Patterns will stay similar to today. July will be rented and October won’t have that many rentals.”
“A 180-night limit doesn’t impact anyone currently,” said Mason. “In the future, if Crested Butte is a 360-day resort with no shoulder seasons, people will be glad we put this in, or not.”
“I’m personally passionate about this,” reiterated Michel. “I value true residential neighborhoods. I just think 180 nights is way too much. I think people should be very concerned with that.”
The council is leaning toward the citizen committee recommendation to not allow STRs in the B1, C, B2, T (except blocks 55 & 37), P, R2A and AO, zones. These zones do not allow for any market rate housing to be constructed. Deed restricted houses will not be able to short term rent the property, however, properties with an ADU may short-term rent either the main home or the ADU so long as the other is rented long-term. Individual room rentals within Crested Butte houses will abide by the same 180-night.
Citizen committee member Dan Escalante said the move would encourage STRs in condo complexes that currently house local workers and he didn’t like that aspect. “In a condo with shared walls it really begins to feel like a hotel,” he said. “You are turning bastions of local workforce housing into hotels. This doesn’t work great for the local workforce.”
Kate Seeley said she couldn’t imagine renting out her home or a room in her home 180 nights a year. “Short-term renting definitely helps supplement income. It is hard to make a living here,” she said. “And second homeowners aren’t going to rent their places long-term. I have an idea for something like a land trust for local houses but we can discuss that later. The whole issue is very complex and a cluster.”
On the regulations side, an STR license will cost more than today but a final number has not been determined, STR houses will be inspected every other year, parking required for the site must be available, the general maximum occupancy is two people per bedroom plus two with a maximum of 10 renters at a time unless there are extenuating circumstances, the licenses will not be transferable with a property sale, town rules and regulations must be posted, and a local contact must be available to deal with issues that come up during a rental.
If a property owner were found to be renting beyond the 180-day limit, the fine would be $1,000 per day and a two-year suspension of the STR license.
The council will look at specifics in an ordinance at the next meeting. A public hearing and vote on the new regulations would likely come in January.