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Silverthorne puts new regulations on short-term rentals

by Eli Pace- Summit Daily

Silverthorne became the latest Summit County government to enact tighter regulations on short-term rentals with town council approving a series of new rules Tuesday on second reading.

Included in them are occupancy caps and the requirement "a responsible agent" be able to address complaints within one hour 24/7, unless a complaint comes in between 11 p.m. and 7 a.m., at which time the agent will have only 30 minutes to address the issue. Multiple failures to do so could result in an owner losing their licenses for two years.

The town is also creating a new licensing process that requires each rental to secure a unique business license, rather than allowing multiple properties to operate under a single license. Rentals will also have to post those license numbers in all their advertisements. According to the town, this helps identify properties that have not obtained the proper license and are not remitting the proper sales and lodging taxes back to the town.

There will also be new fees, ranging from $100-$300 based on the number of bedrooms inside the rental. The new fee structure isn't designed to make money, only cover the town's costs of administering the program, officials said.

Occupancy caps have been one major point of contention as individual governments across Summit County have sought to better regulate short-term rentals recently. Silverthorne hasn't shied away for them, opting to limit short-term rentals to two guests per bedroom plus two. That means a four-bedroom home can sleep at most 10 people. The number of bedrooms inside a rental will be determined by information on file at the Summit County Assessor's Office.

The towns and the county have working together closely as they each look to better regulate the booming industry in their jurisdictions. Together, they plan to set up a 24-hour countywide call center so people can phone in complaints about short-term rentals across the county. A designated "responsible agent" would then have to address those complaints within a specific timeframe or face penalties.

In many ways, Silverthorne's ordinance runs parallel to others already enacted or in currently the works across the county. However, Silverthorne is the only one so far to give agents a 30-minute window to address overnight complaints.

Other provisions speak to health and safety standards and potential inspections.

Like the listings seen on Airbnb.com and VRBO.com, a short-term rental is defined by Silverthorne as any home — or any room inside a home — that's available for rent for a term of less than 30 consecutive days. According to town officials, hundreds are currently operating inside Silverthorne. The goal is to get all of them kicked over to the new licenses by the New Year.

Nearly 3,000 homeowners netted $32 million during this ski season, a doubling from the previous season, Airbnb says

Jennifer Dahir-Kanehl works 50 hours a week at a Breckenridge restaurant to pay her mortgage. This past winter she and her boyfriend eschewed a roommate, opting instead to rent a spare space through Airbnb, joining the ever-swelling tide of high country homeowners hosting short-term guests.

At the restaurant and at the hotel where her boyfriend works, it’s a struggle to keep employees who can’t find a place to live. Dahir-Kanehl knows she could rent her spare bedroom, with its separate entrance and private bathroom, to a local worker.

“But in my world, why would I have someone paying $700 when I can make $2,200 to $3,000 a month,” she said. “Long-term rentals around here are hard to find and when you do, they want $1,000 per room and no one making $10 an hour can afford that. It’s tough for the town, and its going to be way tougher before it gets better.”

Short-term vacation rentals in Colorado ski country are continuing on an explosive trajectory, generating record amounts of income for homeowners and tax revenue for municipalities.

The number of Airbnb guests in Colorado’s resort towns nearly doubled this season over the 2015-16 season, as did the earnings by hosts, revealing the relentless surge of short-term rental business that is vexing community leaders grappling with the emerging impact of the red-hot shared economy.

More than 121,000 visitors booked Airbnb homes in Avon, Breckenridge, Copper Mountain, Crested Butte, Dillon, Frisco, Keystone, Steamboat Springs, Telluride and Vail for the 2016-17 ski season. About 2,800 homeowners — a majority of them women — netted $32 million from those visitors, a doubling from the previous season, according to statistics provided by Airbnb.

Expedia-owned vacation rental platform Homeaway has seen tremendous growth in the number of homeowners offering their residences to short-term guests, with the number of Homeaway-listing hosts in towns like Avon, Frisco, Steamboat Springs, Telluride and Vail growing anywhere from 74 percent to 261 percent in the last four years.

Along with this growth comes impacts, both good and bad. The good: local homeowners banking more cash and communities harvesting windfall tax revenue as they corral renters into licensing and taxing programs. The bad: neighborhood changes as more homeowners embrace short-term over long-term and the pinched supply of rental housing for local workers as homeowners opt for the more lucrative short-term guests.

But statistics revealing those impacts are fleeting. The source of the housing crisis in the high country cannot be blamed entirely on short-term rentals, said Brian Waldes, the finance director for the town of Breckenridge, a pioneer in regulating short-term rentals.

“It does make sense, but we don’t have a ton of data to say that these short-term rentals are a major contributor for our housing crunch. It is a contributor, but we don’t think that droves of homeowners are switching over to short-term rentals,” Waldes said. “We’ve always had a large rental pool, and it’s always been hard to find housing in the mountains. We don’t think these online travel sites necessarily caused the problem.”

Breckenridge, a town of 4,750, has six hotels, three bed-and-breakfasts and 3,345 licenses for individual owners to rent their homes and condos. It’s been that way for years. The town has long leaned on its condo owners to supply housing for visitors to the second-most trafficked ski area in the country.

Taxes on those individually owned units accounts for 29 percent of the town’s total sales tax revenue, marking the largest contributor to the town’s coffers. Short-term vacation rentals are vital to Breckenridge, and the town has developed the most progressive regulations in the state. This year, the town budgeted $19 million for its affordable housing fund.

On the other side of the regulatory coin is Durango, where about 60 of the city’s 8,000 housing units are available for short-term rentals, thanks largely to policies designed to protect neighborhoods and prevent the commercialization of residential areas. Lodging taxes for the city account for about 7 percent of its total sales tax revenue, reaching $1.7 million in 2016.

And in the middle are more than a dozen high-country cities and towns — in addition to major cities across the country — tinkering with different levels of regulation for short-term rentals, from Estes Park to Georgetown, Aspen, Crested Butte and Vail. Most every community has convened a diverse task force to study the issue and every town closely examines each other’s existing regulations in a search for what fits for their community.

“There isn’t a magic bullet. This is one of these things where there are a variety of best practices and a variety of approaches, but they are as different as night and day. It’s not a cookie-cutter approach,” said Sam Mamet, the head of the Colorado Municipal League. “There are a lot of communities dealing with it, but they are doing it differently because of differing needs.”

Short-term rental taxable sales from privately owned units in Breckenridge climbed from $97.6 million in 2014 to $127.5 million in 2016. Airbnb shows 45,600 guests booked accommodations around Breckenridge for the 2016-17 ski season, delivering to area hosts $12.6 million, exponentially more than any Colorado ski-town hosts on the website. Homeaway shows the number of Breckenridge-area listings has grown 73 percent from 2013 to 2017.

Lois Montague and her husband, Kent, this past winter decided to rent out the ground-floor, two-bedroom apartment in the house they built 20 years ago just outside Breckenridge. They thought they could bolster their retirement income by hosting visitors. It rented nearly every night this past winter, allowing 73-year-old Lois to ski 100 days and 78-year-old Kent to get 111 days on the hill.

“We have had people from all over the world, every walk of life you can imagine,” said Lois, who handles all the cleaning and bookings through Airbnb. “Breckenridge doesn’t have enough hotels, so we feel like we are filling a niche.”

She’s read the newspaper reports on the dearth of local worker housing. She’d rent long term, but sometimes her kids and grandkids come up and stay for a week or two. Plus, there’s the money.

“I know that Summit County and Breckenridge in particular have asked repeatedly through the news media that we consider renting the property out long-term to employees,” she said. “But the employees can’t afford what we are getting for rent. I feel bad, but I guess I don’t feel quite that bad.”

Airbnb has partnered with 275 governments around the word to collect and remit local lodging taxes. In February, the site began collecting state taxes for the state of Colorado, building upon existing tax-collecting agreements with Boulder, Snowmass Village, Steamboat Springs, Colorado Springs, and Golden.

“We want to help hosts pay taxes. Our community of hosts want to pay their fair share,” said Airbnb spokeswoman Jasmine Mora.

Even with Airbnb’s release of data, it’s hard to get a good grasp of how short-term rentals are influencing Colorado’s resort towns. Ralf Garrison, whose Denver-based DesiMetrics group surveys property management companies and hoteliers across the West to identify lodging trends, called short-term rentals “a Rubik’s Cube.”

“Rental-by-owner these days is probably the most disruptive and least understood influence in the vacation lodging marketplace,” he said.

There’s no reliable indicators. Some owners rent their second homes all the time. Others rent when they aren’t using it. Owners with a high net worth tend to not rent at all. Then many owners list across multiple platforms, meaning the number of listings rarely mirrors the number of available units for rent.

There are several pistons firing off the same crankshaft, said Garrison, who in presentations to municipalities eager for statistical support of any impact from short-term rentals, tends to elevate short-term rentals as critical “hot beds” that can fuel a region’s economic vibrancy.

“The highest and best use of some of these units is as a short-term rental,” Garrison said.

Now hotels and property management companies are listing properties on Homeaway, VRBO and Airbnb, and those sites are becoming distribution channels for traditional lodging.

“For those of us who love puzzles, we are having fun,” Garrison said. “It’s really hard to solve until you get the hang of it and we all are slowly figuring it out.”

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