License regs totally in force January 1

Mark Reaman

Most of the new regulations covering short-term rentals (STRs) in Crested Butte will go into effect this coming January 1. During a meeting last week between Crested Butte town staff and residents seeking answers about the recently enacted regulations, one issue in particular appeared to be causing some angst.

Not allowing the transfer of a short-term rental license along with the sale of a particular property appears to have the “unintended consequence” of putting some guests in jeopardy of not having a place to stay when they get to the valley.

Hypothetically, if a family from Texas had booked a July stay at 101 Maroon Avenue and the owner of the property sells the property in June, the new owner will not automatically have an STR license and so could not legally rent the property to that Texas family.

“STR licenses are not transferable so any new owner will have to apply for a new license,” Crested Butte community development director Michael Yerman explained to the approximately 30 people at the meeting. ”They cannot honor the booking made by a previous owner. The new owners have to have ownership of the property before applying for a license.”

Obtaining a license will take some time and it is possible that none will be available, given a 30 percent cap on licenses meant for houses that are not the primary residence of an owner. There could be a waiting list for such properties.

“Some houses are under contract and bookings are made beyond the closing date,” said local real estate broker Channing Boucher. “There is no grace period? Good Lord. What do we tell them?”

“Are the regulations perfect? No,” said Yerman. “I would suggest we let them play out.”

“Having rentals booked after a sale is an unintended consequence of the regulations,” said local property manager Steve Ryan. “Can this be reopened and reconsidered? At least this one particular element of the regulations?”

“Yes it can but that would be up to the Town Council,” responded Yerman. “There is probably not a fast way to deal with it.”

“That is a pretty serious unintended consequence,” said Boucher. “We have several houses that are under contract with bookings.”

Ryan said he had talked to at least one councilmember about reconsidering that issue.

Overall at the meeting, Yerman went through common questions the town had received with the new regulations.

There are two types of licenses. The first is an unlimited license that allows eligible property to be short-term rented any number of nights each year. The town imposed a 30 percent cap on such rentals. If that cap is reached, a waiting list is started.

The second license is meant for primary residents. A home in town that serves as a primary residence for locals can be rented up to 60 nights a year. There is no cap on that number.

Fees for the licenses are still being determined and must pay for the STR process and administration of the program. It is expected that the unlimited license will cost between $500 and $1,000 per year, while the residential license will run between $500 and $750 annually.

Yerman said the 30 percent cap has been reached since the current STR business licenses have not been separated into the two license categories. It is expected that once that is fleshed out and people with STR business licenses apply for a primary residence license, some unlimited licenses will be freed up. That will not be determined until early 2018. Anyone interested in getting an STR license must apply between November 1 and December 31. Each STR property will be inspected for safety, parking and occupancy issues. Neighbors will be notified that a property is applying for a license. Each license will be good for two years but renewals and fees must be paid each year.

“We are in the process of hiring an inspector,” said Yerman. “The inspector will look to make sure that any parking that is associated with the property is being used. So if you had put in a flower bed in a spot where there is supposed to be parking, for example, it will have to be torn up and used as parking if you want the STR license. We are still working on the inspection list but it will primarily deal with life-safety issues such egress [an exit] from bedrooms, having smoke detectors, fire extinguishers and carbon monoxide detectors.”

Yerman said the town “will give a reasonable compliance period to rectify situations found by the inspector. The point is life-safety issues. We don’t want to be a police state.”

If the town receives complaints about a particular STR property, the inspector will investigate the complaints. If the complaints are consistent and legitimate, the STR license could be revoked. Yerman said licenses could also be revoked if people don’t file the proper paperwork, don’t pay appropriate sales tax or have repeated complaints.

There was some grumbling by citizens that the STR regulations were implemented in a split vote by just five Town Council members in a 3-2 vote, because of circumstances with recusals by the council.

“We are trying to implement the ordinance and figure out how best to move ahead for everyone,” explained town manager Dara MacDonald.

The Town Council will have a discussion during the budget process to set the STR fees and it appears they may be asked to reconsider a grace period for the transferability of the licenses to accommodate bookings already in place.