Short term rental regs to be tweaked and reconsidered

Council encouraged to slow down and “get it right”

By Mark Reaman

The Crested Butte Town Council has decided to take a month-long timeout to contemplate proposed regulations governing short-term rentals (STRs) in town. The council on Monday, October 17 backed off imposing a limit on the number of STRs to be allowed in town and agreed with the public that it should slow down and carefully evaluate all the suggested regulations included in a potential ordinance.

The council will hold a special meeting on November 14 to look over changes to Ordinance 12 that could eventually govern STR licensing in town. The other items included in the ordinance address primarily health and safety issues.

At Monday’s meeting, mayor Glenn Michel went over every provision in the proposed ordinance and the council brought up questions for the staff to consider in more detail.

“Ordinance 12 contains the slam-dunk issues that we discussed last time,” explained Michel. “The council had a good consensus on the items included in the ordinance. These are the low-hanging fruit.”

In response to a question from councilman Chris Ladoulis, Crested Butte building and zoning director Bob Gillie said licensing STRs would be different from regulating lodges and hotels. “It is a different animal,” Gillie said. “It is not oranges to oranges. These are existing housing units, some built more than 50 years ago, versus lodging properties. Having transient guests in a house is different from having someone living there long-term who is familiar with the structure and neighborhood rules.”

As written, the ordinance would not go into effect until 2018 and this bothered a few council members. “I understand a transition period is needed but it seems we should be able to start with this by next March or May,” said councilman Jim Schmidt.

“This is a heavy lift. The transition year will be needed. It makes sense to give us time to start licensing and inspections but make people with licenses aware,” said Gillie.

“There are things on the ground we need to get set in place like hiring a new person, getting him or her trained, and buying software to track this,” said town manager Dara MacDonald. “But I think we can be there by spring of 2017.”

It was pointed out that under the proposed ordinance, STRs would essentially be allowed in every zone in town. That is currently not the case although it is widely understood that short-term rentals take place pretty much all over town and business licenses for such STRs have been issued by the town.

Gillie explained that there were some “nonconforming uses” in certain zones that allowed some houses to be short-term rented in zones that clearly don’t allow it. Those zones are primarily made up of deed-restricted units and under the new ordinance, owners of deed-restricted units would not be allowed to short-term rent a deed-restricted property.

“We are wrestling with the existing code that prohibits STRs in some zones or allowing them everywhere for the most part with a limit,” said Michel who noted his house was in a zone that did not currently allow STRs but he had been issued a business license for short-terming his house. He said that like so many others in town, he was not aware until very recently about the zoning restrictions on STRs.

Gillie explained that in the past, all business license applications, whether for a short-term rental or any other business, were only screened for having a completed form and paying the required fee. “For lack of a better mechanism, it is how the Town has tracked STRs to this point,” he said. “The current proposal is to put in place a separate license for STRs to tailor a more specific rule set and communication channel.”

Gillie said that instead of restricting STRs by zone the current proposed rule set would address whether a residential unit has a deed restriction on it or not.

MacDonald said that when a property changed hands, the ordinance required the new owner to apply for a new STR license. It would not automatically transfer with the property sale. “There are a couple of reasons for that transfer process. We want to bring the new owner in to explain the updated regulations as well as have the town get new contact information specific to that property,” explained MacDonald.

Gillie said STR properties would probably be inspected every other year and if parking is designated for a specific property, it has to be used. Town building code prohibits renting a house to more than 10 transient people at a time; otherwise it falls into the lodging category.

Councilman Jim Schmidt said he easily saw the difference between inspecting STR properties versus long-term rentals. “When I would rent and go view a place, if I didn’t like it or it looked dangerous, I left and didn’t rent it,” he said. “For people coming in for three or four days, there are certain expectations. It is a very different expectation between short-term rentals and long-term renting.”

Ladoulis questioned the need for STR placards with property-specific information and identifying license numbers to be displayed prominently on the outside of a house. He said it took away from the charm of the home. Michel likened it to displaying a town building permit.

When it came time for public comment, citizen committee member and property manager Steve Ryan said he recently attended a conference on the issue and was informed that sophisticated thieves were tracking VRBOs and Airbnb properties through the internet and determining which homes were not occupied at certain times. Ryan said while the original intention of the placard and tracking numbers was well intentioned to help town staff, thieves can more easily determine when no one is at the home to break in. “Something that started as a good intention has turned into a massive privacy issue,” he said.

Attorney Marcus Lock said he was representing a newly formed nonprofit group called Crested Butte Owners Supporting Sound Housing Practices. Schmidt expressed concern about not knowing exactly who was funding the organization but Lock assured him it was local property owners and businesspeople and not a shady, nefarious, out-of-state cabal.

Lock asked the council to slow the process down since changes were being made to the ordinance as recently as that Monday afternoon. “I have substantial concerns about the ordinance that go well beyond increasing the fees, which you as the council certainly have the discretion to do, or looking after the health, safety and welfare of the town. I have five pages of comments on this proposed ordinance. Give us a chance to share those notes with your staff. If you move too quickly, important details could be missed.”

Attorney David Leinsdorf suggested setting aside an entire evening for this one issue. “This impacts a huge number of people in town and I agree you are moving on this prematurely,” he said.

Attorney Jim Starr agreed more time might be needed before the ordinance went into effect but felt 2018 was too long. “I foresee a big public meeting on the horizon but there will probably be more people there who live outside of town and don’t vote for you than people who live in town,” he said. “Denver is ahead of you on this issue. They are going further than you so watch what they are doing,” he said as an example of what city to learn from.

Rita Payne said she has owned a home by Coal Creek for 25 years and felt the council was moving too quickly with new regulations. “Have you had a problem that is so urgent you need to pass this quickly?” she asked. “Let’s make sure we get it right.”

Real estate agent Cory Dwan said not allowing the license to transfer to a new owner who purchases the property was not a fair provision. Sasa Watt said insurance provisions should be explored.

Keith Payne advocated that licenses be good for two years instead of one, and that given some larger homes in town, the ten-person limit be rewritten to allow two people per bedroom.

Michel said it was obvious to him that the ordinance was not ready for even a first reading.

“I think it needs some tweaking and we should allow the staff to receive more comments,” agreed Schmidt.

The council continued the discussion on the ordinance until Monday, November 14. They will also allow more discussion on the pros and cons of placing a cap on the number of STRs in Crested Butte.