Council takes step toward STR license moratorium

Opportunity for discussion and data gathering

[ by Mark Reaman ]

An outline of the first tangible steps to attack the local housing crisis under the town’s Local Disaster Emergency declaration was approved by the Crested Butte town council Monday, June 21. Several initiatives will get underway (see page 15) with the blessing of the council to address the housing issue including an effort that will result in fewer short-term rental (STR) properties in Crested Butte.

In the most high-profile action, the council agreed to move toward a one-year moratorium on issuing any more Unlimited Short-term Vacation Rental licenses. The town allows 212 such STR licenses to be in circulation and that is the number of currently active licenses. But town will now stop accepting Unlimited STR license applications and if a license is for some reason dropped by a property owner, the town will not issue a replacement license. An alternative STR license is available for local homeowners who want very limited rental nights and no change will occur to that permit. Anyone who currently holds an unlimited STR license can continue to renew it.

According to a memo by town planner Patrick Church, over the previous two years 38 properties forfeited their unlimited licenses through a sale of the property. Of those, 20 of the properties subsequently reapplied and received a new license under new ownership. Under the moratorium, that new license would not be issued, thus the expectation is that the number of unlimited STRs in Crested Butte will decrease over time.

Community development director Troy Russ said the idea was to take the year and study what happens to a house that drops its STR license and cannot purchase another one. He pondered if the selling price of the house would decrease. Would it become a second home or move into the long-term rental pool?

“We want to gather data on how the new rule would impact decisions in that market,” said Church.

“It gives the community the opportunity to focus on the upcoming Community Compass (long-term strategic plan) and see how the community wants to handle STRs,” said Russ. “I also think if we lose 17 short-term rentals it sends a message about the housing crisis.”

Councilwoman Mallika Magner asked if the data being sought could be gathered without a moratorium. Russ responded that altering the market conditions by not allowing any more licenses provided a unique perspective of the market and situation.
“I don’t think anyone thinks the moratorium will lead to a boom in long-term rentals but I think the information gathered would be interesting to see if that changes the dynamic,” said councilwoman Jasmine Whelan. “I think new regulations on STRs are coming down the pipeline and this could provide good data.”

“We spent a lot of time getting to our short-term rental ordinance and the number of licenses allowed and I don’t think this will gain a single thing,” countered mayor Jim Schmidt. “We are at the 212 threshold so no one else can get a STR license. Plus we will be losing the revenue from those properties and some of that revenue is dedicated to affordable housing. I think this just gets us dark houses.”

“That may be the case,” said Russ. “We just don’t know.”

“We are curious about what happens in a different market,” added Church. “If a buyer just wants to purchase a house for the short-term rentals, what does not being able to do that mean for the community?”

“And let’s be realistic. While the cap on STRs in Crested Bute is 212, Mt. Crested Butte has something like 547 active STRs. There are others in the county,” said Whelan. “We need to really work together with the other entities on a comprehensive strategy.”

Russ emphasized that current Crested Butte STR license holders would not be impacted. He said putting in a moratorium under normal town rules would also provide plenty of time for public input on the issue. “But this provides a chance to understand what houses turn to when the market doesn’t allow STR licenses,” he said. “We’ll follow it for a year and report back.”

“I’m just not convinced it will add one single long-term rental to our town,” said Schmidt.

“Putting the idea of a moratorium out there will create so much discussion that is vital to the community,” said councilman Will Dujardin.

“Things have changed since the 212 number was put in place,” added councilman Jason MacMillan. “That might have been a good compromise at the time but things have shifted. Gathering more information is a good thing. More discussion is also a good thing and could lead to some possible ideas and solutions.”

The majority of the council agreed to proceed with putting a moratorium in place. It will be brought up at the July 6 meeting and take at least two council meetings for approval.

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