CB council shifts again on caps for short-term rentals

Now backing a 120-night limit

By Mark Reaman

In the continuing effort to find the golden process and magic number at which to cap short-term rentals (STRs) in Crested Butte, the Town Council has now pulled the number back from a maximum of 180 rental nights a year to 120.

This figure was reached after a fresh breeze of public comments on Monday evening, and the council admittedly swayed with the wind.

At the earlier December 5 meeting the council had listened to a flurry of comments from property managers and businesspeople in the community asking for little to no limits on STRs, and the council agreed on the 180-night cap.

At the December 19 meeting the council had a line of local residents imploring them to protect the idea of vibrant neighborhoods instead of turning those neighborhoods into commercial hotel districts.

The council has been discussing regulating STRs for months with Ordinance 12 that, among other things, addresses health and safety issues along with parking, transferability, occupancy and fines ($1,000 per night and a two-year suspension of the STR license) for violations.

“This has been discussed quite a lot,” admitted mayor Glenn Michel before opening up the meeting to public comments. About 40 people were in the council room and points on both sides were made.

“You are hearing a lot of warnings about disaster if you put strict limits on short-term rentals. Maybe yes, maybe no,” said Margo Levy as she listed several towns with strict STR limits and regulations—towns that continue to be “vibrant and successful.”

Resident Mark Alling told the council members it was their duty to represent people like him who live and vote in the town of Crested Butte. “I live in a residential zone, not a bed-and-breakfast zone,” he said. “These units are being run as a commercial venture. Parking is always an issue. The town charges businesses parking in lieu fees but these houses don’t have to pay that. The pet-friendly nature of the rental by my house brings dog issues. It is simple math when someone can make $45,000 a year renting a place for 90 days at $500 per night. They will do it. I like the Telluride limit of 29 days.”

“It is not an easy problem to solve,” admitted six-year resident Dale Kramer. “One of the primary reasons I moved here and stay here is the sense of community. Allowing unlimited short-term rentals jeopardizes the community. I enjoy having neighbors I can talk to. I am concerned with the recent attitude of the town and the country of accepting monetary gain without thinking of the long-term impacts. I’m asking that you put meaningful restrictions on STRs and don’t kick the can down the road.”

Mary Ellis sat on the citizens committee the council asked to analyze the situation. “We on the committee all agreed there is a point where too many STRs would bring about a tipping point and harm the community and we tried to strike a balance. We need to preserve what’s left of the neighborhoods in town. Allowing 180 nights is all of the summer and the winter. It would do nothing.”

“You guys are in a tough situation,” property manager and citizens committee member Steve Ryan told the council. “I talked to 17 different business owners this past weekend and all of them liked the path you are on with the 180-day limit. Businesses are struggling to make it here. They need visitors in town. When people talk about how restrictions aren’t hurting places like Boulder and Durango, their sole source of income is not based just on tourism. But that is Crested Butte’s main driving force. The ordinance addresses how to enforce things like parking issues. Mr. Fenlon’s letter in last week’s paper disturbed me. He called you shortsighted, naïve or lazy. Nothing is further from the truth. You are walking a tightrope. Pulling back from the 180-night cap would be destructive to local business.”

Local business owner Bobby Maxwell of Elk in an Apron said he understood both sides of the argument. He has experienced the hassle of nearby renters who park in the wrong spot or are loud late at night. “I hear the concerns and don’t want Crested Butte to turn into a total hotel. As a business owner though, it is not easy and I don’t want to see a further decline in business. If I didn’t own the building we’re in we might have had to close the doors. Ninety percent of my business is from people living at least 20 miles away. Frankly, people want to come here and experience town. They like the Charles Dickens town we have right now. They won’t necessarily come back and stay in Mt. Crested Butte. If you limit the availability of short-term rentals in town it could really hurt business, so I would be very careful about limiting days that could hurt your sales tax revenues.”

“We’re all doing a lot of remembering these days and I don’t ever want to say ‘I remember when I had neighbors,’” said resident Sue Navy. “Neighborhoods need residents. We need to protect the community and community is made up of people. I think we need a meaningful limit. If Telluride can make a 29-day limit work, there has to be something better for Crested Butte than six months.”

“I agree we can look at what Telluride has done and a 180-day limit is not meaningful. My wife and I are in favor of meaningful regulation and caps on STRs,” said Josh Egedy. “We think the town can find a middle ground to help local businesses and locals who rent their places.”

“I respect the opinions on both sides,” said business owner Kyleena Falzone. “I have two businesses and 130 employees in town. I’m 100 percent for community. I have short-term rentals near where I live and I don’t consider the renters strangers. As a business owner, we bleed money like you can’t believe (many months of the year). It is hard on us and hard on the employees. We need people coming here. So what’s the balance? The council needs to be careful. I’m not sure what side I’m on but trying to figure out a good solution.”

“It seems a 180 limit is way more than necessary and doesn’t accomplish anything,” said resident John Hess. “I know the people living in my neighborhood. We check on each other and help one another. I don’t like the idea of living in a commodity. I do like the idea of having friends in town. So do what it takes to maintain community.”

Hess and others urged the council to support a hotel in town to bring in tourist beds to Crested Butte and he even suggested offering incentives to get a hotel with reasonable room rates in Crested Butte.

Jim Starr said the council should return to one of the first ideas they floated and put a cap on non-resident homeowners who short-term-rent their property, but open it up more to those who live in town and rent. “Cap the nights at 75, which would be a good compromise,” he suggested. “A 180-night limit is a non-regulation regulation. You represent the constituents who live in this town who are asking you for reasonable regulations. Act on the town’s stated core values and not out of fear.”

“Listen to the recommendations of the citizens committee,” urged Glo Cunningham. “And if you go with a 180-night limit, it is almost impossible to move it back to 75 or 90 nights. Having a 90-night limit sounds good and if you need more, raise it.”

“No one wants to abolish STRs but people want a reasonable limit,” added Dan Escalante. “I would like a clear direction of what it is you are trying to achieve. Get creative but keep the community intact. “

“There is data available to show the trends of what is happening in town,” said citizen’s committee chair Alex Fenlon as he handed the council some data points. “Explore it and look at the long-term patterns. It isn’t pretty.”

“Stop and think of the impacts of your decision. If the council limits rentals to 90 days, there is a good chance of nine months of empty houses and dark neighborhoods,” said property manager Shay Wyckoff. “Is that promoting community? Does it fix the problem you are trying to solve? Going with very limited nights is going with a dark community and saying ‘See you later’ to local businesses. It impacts employees trying to make a living. It would be shooting your business community in the foot. Truly think about what you are trying to accomplish and then accomplish that. Don’t make neighborhoods go darker.”

The council was somewhat split on how to adjust the limits.

“I agree with everyone who spoke so far,” said councilman Paul Merck. “I feel like I’m walking the fence a bit. But what I think is great is that we are having a great community discussion. I don’t want to rush this. I thought 180 days was a good way to start the discussion. I’m being accused of being swayed and yes, I want to be swayed by my constituents. I don’t want to rush.”

“There is no one right side on this, there are a million shades of grey,” said councilman Jim Schmidt. “The big problem is long-term rentals for workforce housing. With what houses are selling for now, I’m afraid they will go dark as second homes, or people will cheat and rent it more than permitted. But the house prices in town are so high now that they aren’t really affordable for working locals. I would like to go from 180 to a straight 120-night limit. That’s still not every day in the summer and winter.”

“It is refreshing to hear all these comments,” said councilman Roland Mason. “The trend is for fewer and fewer houses to be owned by locals. The 180 limit looks to the future in five or 10 years. The idea was that it would prevent an LLC from buying up a block of houses and renting them all short term. I like the 120-day limit. I would rather cap the number of nights and not the percentage of STRs we allow in different neighborhoods.”

Michel noted that the ordinance defines a rental of 30 continuous days or more as a long-term rental and thus would not count against a STR cap on the number of nights.

“I’d personally be comfortable with a number less than 100,” commented new councilman Jackson Petito. “Limiting STRs won’t necessarily make more long-term rentals available. But the STR element might be pushing house prices up. I would like to explore the idea of caps that are different for residents renting their houses versus people using STR homes as an investment property. Something else to consider is that if there were no actual residents in town during April or November, business would be hurt then more as well. There is a hotel planned for Sixth Street. I would think the local business community would be supporting that as well.”

”I think if the Sixth Street Station hotel comes on line, market forces will eliminate some STRs,” added councilwoman Laura Mitchell. “The 120 number works but I still have concerns for employees of retail, restaurant and property management companies. As for different limits in the same neighborhood for a resident or a property owner from Houston, that speaks to the fairness issue.”

“While we all greatly enjoy our retail community, we need to make some places for employees to live,” said Michel. “It’s the balance we are all struggling with. I will err on the side of long-term locals and community. It is hard to roll the number back once we set one.”

“I’m for striking a balance, too,” said councilman Chris Ladoulis. “As we look at some of the data from Alex it can be alarming. The residents of Crested Butte no longer own the majority of residences in Crested Butte. We are a shrinking minority of homeowners in this town. So we are up here as a council not waffling but testing the waters. Does a 120-night limit have a real impact? Not really in my mind. But we have an obligation to protect the town in the future. I guess I could go with 120 or less.”

In an effort to “get creative,” Michel threw out the idea of limiting STRs to 90 days plus allowing unlimited rentals in April and November, the town’s weakest sales tax revenue months. “It seems there is some opportunity there,” he said. “It could act as an incentive to people to come here and the help the economy. So that would be a total of 150 nights a year allowed for STRs.”

Mason said he could get behind that idea, as he has always been a proponent of shoring up the off-seasons.

Schmidt voiced his doubts about attracting anyone to the valley in the April and November “mud seasons” and wanted to stick with a straight 120 limit.

“Our job is to look into the future, not respond to what yesterday was. Let’s get creative,” urged Michel.

“I agree with Jim that we should it keep it simple,” said Mitchell.

“We really need to look at affordable housing and a tax on STRs that could go toward affordable housing projects,” said Schmidt. “That would have to go to the voters but it is something we should look at.”

Merck said he was more “in tune with the 120-night limit. The 180 number was a starting point and it brought people out.”

Ladoulis said offering rentals in April and November “would be somewhat meaningless.”

This brought an objection from Michel. But some in the audience loudly agreed with Ladoulis. Steve Ryan said Ladoulis “was calling a spade a spade.”

“You are toying with our income here,” added an upset Bobby Maxwell.

Michel implored the audience to let the council continue its discussion and reined in the outbursts.

“It’s a creative idea but what sways me more is the idea of the 30-day or more rental not counting against the STR limit,” said Ladoulis.

A straw poll indicated the council split 4-3 on the two limit ideas with the straight 120 limit carrying the day. Despite no real council discussion over some zoning issues, Schmidt and Merck then moved to set Ordinance 12 for public hearing on January 3 where the STR discussion will continue. We will see where the cool winds of January take the council after the holidays.