Moratorium not approved by CB council

Will still look at short-term rental regs

By Mark Reaman

There will be no moratorium on people applying for business licenses for short-term rentals in the town of Crested Butte. But the Town Council could begin formulating regulations governing such short-term rental businesses as early as the end of the month.

The town staff had recommended a temporary moratorium on the issuance of Business Occupation Tax Licenses (BOLT) to any business renting or leasing residential units for a term of 30 or fewer days. The idea was to give the council time to discuss the issue and formulate regulations for short-term rentals (STR) in town. The staff also wanted to be sure they had time to implement any new regulations and be prepared with any additional personnel needed to oversee the regulations.

But a packed council chamber at the August 15 meeting showed little support for the idea of a moratorium.

Town planner Michael Yerman emphasized that the subcommittee working on possible ideas for dealing with STRs had been meeting weekly since spring to develop recommendations. He said that while STRs have existed in Crested Butte for years, the advent of international marketing sites like Airbnb and VRBO have made the industry explode.

While about 16 percent of the town’s housing stock had a STR license in May, since the subcommittee began meeting and the council began thinking about a moratorium a few weeks ago, that number has exploded again to more than 250 potential applications. Town staff is processing dozens of new applications that came in during the last few weeks, bringing the total to about 25 percent of the homes in town.

“The commercial uses in residential neighborhoods are impacting the town,” Yerman said. “This discussion with the council to deal with the committee recommendations will take several meetings. A moratorium is a legislative tool used to allow council discussion without continued propagation of the issue. It is also a tool for the staff to prepare implementation of whatever regulations you decide on.”

Yerman said the staff hoped to have new rules ready to go and lift the moratorium by the end of the year even though the proposed ordinance stated it could run until March 17. Yerman was clear that no one on the subcommittee figured new STR rules would result in more long-term affordable housing in town. But the committee had discussed letting voters decide on a possible tax on STRs to help fund affordable housing in the future.

“If the town is diligent and collects data we can perhaps use that data to put an educated ballot measure to the community,” Yerman explained.

Property manager Steve Ryan was a member of the subcommittee and said he was strongly against the idea of a moratorium. “I think it creates a false sense of panic,” he said. “Look at the influx of applications that came in after [councilmen] Roland [Mason] and Paul [Merck] went in to get their licenses. There were maybe 200 licenses before and now there are more than 250. But they didn’t become short-term rentals overnight. Those 50 applications came in because of a panic but it doesn’t mean they are all renting their homes. It’s not as rampant as the figures appear to be.”

Stan Weil said he has a home on Beckwith he sometimes short-terms and there has been some interest in selling it. He wanted to know if the license was transferable with the sale of the house if it sold during the moratorium. He was told at the meeting that the license was not transferable. The new owners would have to apply for a license after the moratorium was lifted. But Yerman corrected that notion Wednesday saying the license could be transferred.

“At this time, a Town business license can be transferred from one property to another for a $25 transfer fee,” he explained. “I misspoke when I stated they run with the property.” He did say the subcommittee had talked about recommending that new licenses not to be allowed to transfer from one property to the next.

Property manager Shay Wyckoff said Crested Butte runs as a tourist economy and people staying in the homes generate income for the town and local workers since many employees make their living servicing short-term rentals. “Think about where people coming here are staying and spending money in the restaurants and shops. And legal issues would probably come up with things like a house sale falling out of contract because a moratorium is in place. Think carefully about all the people that would be impacted by a moratorium,” Wyckoff said.

Kimberly Barefield, who also manages properties in the valley, said she was originally okay with the moratorium idea but had changed her mind. “It would put a damper on all business from real estate to restaurants to housekeeping. I think it will be hard to get past the negative perception of the local community and the tourists. A moratorium has a negative connotation to them both,” she said.

Barefield said most short-term rentals are booked for the summer by the end of January so the March deadline was problematic. “It is also a misconception that all those houses are dark all the time,” she said. “It allows some local families the ability to afford to stay here. Many of the other houses are used by the owners when they aren’t rented. There is a new profile of homeowner in Crested Butte and they like the place and the lifestyle so they spend time here. Maybe instead of a moratorium, implement the regulations gradually instead of all at once.”

Martha Keene made arguments for both sides of the debate. “I agree a moratorium causes a panic. I think as a community the town is bursting at the seams at times and the experience of the visitors isn’t always that great. Are we doing too many short-term rentals and losing workers in town as a result? But I think a moratorium could give the council time and space to listen to a balanced argument.”

“I want to stress that some of the people who short-term-rented a place here end up moving and living here,” noted resident Jeff Hollings. “We are examples of that. So think of the long-term impact. It can be a pipeline for people who live here eventually. Be aware of the unintended consequences.”

Mayor Glenn Michel said he had given the issue a lot of thought and viewed the idea of a temporary moratorium as a “timeout. I think it’s important to have this window.” He cited a potential need to inspect STR properties to make sure they were safe. He wanted to gather more data on all the aspects of the new business that was affecting local neighborhoods.

Councilwoman Laura Mitchell also sat on the subcommittee and said based on recent feedback, “I think the moratorium could open a big can of worms that won’t be healthy and could explode in our face. I think we can make the space to deal with discussing new regulations.”

Councilman Chris Ladoulis said he didn’t think the community had reached a point where implementing a moratorium was necessary. “I’m sympathetic to the need to talk about the issue and talk about regulating short-term rentals but I don’t think we’ll hit a tipping point in the next three to six months.”

“We all love Crested Butte,” said Michel. “How do we as a community remedy having a preponderance of short-term rentals in some neighborhoods instead of neighbors?”

“It’s a quandary,” agreed Ladoulis. “But I’m not sure we can solve it with regulation.”

“It is hard to balance the individual’s rights with the greater good of the overall community. That is something we are all wrestling with,” said Michel. “At some point, too much is too much. Are we there yet?”

“It is hard to develop regulations on a moving target,” said councilwoman Erika Vohman. “But, while I respect the staff’s recommendation, it is hard to support a moratorium. I agree with Laura.”

“The concerns we’ve heard tonight and from email are all ones that have come up in the committee,” said councilman Jim Schmidt. “I’ve had a hard time with this and have always said we need to go after the low-hanging fruit, like making sure properties are safe with things like smoke detectors and providing a local contact. I see the votes aren’t here for a moratorium but I think we need to start the meetings on this topic as soon as possible.”

Schmidt was correct in that the motion could not find enough support to even get the motion to a vote. The council has tentatively suggested Monday, August 29 as the first of many discussions to consider new STR regulations.

During the public comment section of the council meeting, resident Margo Levy raised concerns about the council’s conflict of interest position with the short-term rental situation in town. Council members are not supposed to vote on issues that could benefit them financially. Since five of the seven council members have business licenses for short-term rentals, Levy said there was at least the appearance of a conflict. “It makes me uncomfortable,” she said. “I’m sorry so many of you put yourself in this ethical bind.”

The council will hold a work session and get some expert advice on what constitutes a conflict of interest and whether there is one in this case. That work session will be scheduled for the fall.