CB council continuing to look at short term rentals

Regulation options to be explored

By Mark Reaman

How to regulate short-term vacation rentals in the town of Crested Butte is becoming a priority for the Town Council.

Approximately 15 percent of the houses in Crested Butte are used at least part of the time for short-term rentals. It appears that percentage is rising and the Crested Butte Town Council and staff want to stem that rising tide.

At a work session over the matter on Tuesday, August 18, the council listened to results from a study of the issue conducted through the Colorado Association of Ski Towns (CAST) and summarized by the staff. One of the consultants involved in the study was Crested Butte’s Melanie Rees.

While there are safety concerns with vacationers staying in private residences, the council wanted to focus on the bigger social impacts vacation home rentals (VHRs) have on the community—primarily the loss of local long-term housing.

In a PowerPoint presentation to the council, town manager Todd Crossett said the community had been experiencing a housing shortage for long-term rentals that had become “dramatically more acute in 2015. Along with that development, rental prices in town have increased. That combo is making it more difficult for long-term residents that don’t own in town to live in town.

“We do have some regulations governing short-term rentals but these are admittedly regulated at a pretty low level,” said Crossett.

Certain zones in town allow for vacation rentals and while certain rules apply, the town admittedly has no dedicated enforcement to make sure things such as adequate parking are available. The town does charge a business license fee and sales tax for short-term rentals. Sales tax collected from short-term rentals and property management rentals in town amounted to $153,498 in 2014.

According to the CAST survey, VHRs are on the rise across the country and it is difficult for most communities to track. While these rentals provide sales tax revenue, add some jobs for communities and provide a way for locals to help offset their mortgages, there seems to be a common perception that it “contributes to loss of ‘community’ brand and feel, reduces the local rental housing stock and provides lack of fair competition with B&Bs and other lodging.”

“Our staff is on top of tracking VHRs,” said Crossett. “In fact, I think we are better than most places but it’s getting harder and harder.”

According to Crossett, practices and tools used by other communities include implementing a tax to offset affordable housing but that would take a ballot measure to enact.

Some places limit the number of VHRs or have licensing fees that might vary based on the number of days a house is used for short-term renting.

The council could come up with fines for breaking local regulations, limit the number of VHRs per block or require a local management company to oversee each VHR.

Crossett also said it could be necessary to “add a full-time employee for compliance if an inspection regime is imposed.”

Councilman Skip Berkshire said, as when the council implemented higher affordable housing fees as part of commercial and residential construction, it was obvious to him that short-term rentals brought with them a need for more workers and thus should have appropriate fees imposed. “There is a nexus there that can be tied to local workforce housing,” he said.

Berkshire said while he agreed the town should keep an eye on issues such as parking, noise, appropriate insurance and trash collection, the impact to the greater community was the issue.

Councilmember Jim Sch-midt said limiting the number of short-term rentals in a neighborhood could address some issues like parking. And he said the town should definitely keep an eye on safety issues with VHRs even if that meant charging higher fees to pay for an enforcement person.

Licensing and increasing fees appeared to be a direction the council wanted but no specifics were hashed out in the work session.

“Any extra work performed by the town has to be covered by the people renting their places,” Berkshire stated.

Councilman Glenn Michel said the council needed to specify a specific goal it wanted staff to address. “If the goal is to provide more local workforce housing, can we regulate this to accomplish that goal?” he asked.

Councilman Roland Mason said he was worried that if the town regulated short-term rentals too much, the houses would sit empty as second homes in dark neighborhoods as opposed to being used for long-term rentals. “Will lowering the number of short-term rentals in town actually have the impact we think it will?” he asked. “Not necessarily.”

Schmidt pointed out that many of the old mining homes in town were being bought and refurbished. “People are spending a lot of money on what once were the old mining houses,” he noted. “They aren’t being rented out to locals anymore.”

Mason said he wanted to hear from not only people looking for housing or short-terming their houses, but also the local businesses that might be seeing positive impacts from people renting in town. “I want to hear from all sides of this issue,” he said.

Crossett said the staff would filter the council comments and return with some specific regulation suggestions for the council to consider.