Aspen short-term rentals in for more city regulations

ASPEN, Colo. — Aspen city leaders, now knowing short-term rentals account for roughly one-third of the accommodations business, are working toward regulating an industry blamed for siphoning away worker housing in mountain towns in Colorado and the West.

The city council received a detailed account during a work session Tuesday on the presence of short-term rentals, or STRs, in Aspen, from city Finance Director Pete Strecker and Community Development Director Phillip Supino. The presentation was part of the city’s increased scrutiny of STRs and their impact on Aspen.

For the short term, the city council agreed to capping the number of STR licenses and also banning new STR licenses. That step, however, will require their approval of a code amendment, which means the five-member council will need to officially vote on the matter at a future meeting.

The council also could consider changing the STR licenses from one year to six months, though they acknowledged such a move could disrupt a market where people are booking rental properties a year out. Other considerations included introducing a tiered fee structure for STRs based on the properties and their locations; a traditional condo unit at The Gant, for instance, would pay a different STR fee than a $80,000-a-month property in the West End neighborhood.

Those were some of the regulatory ideas that were discussed at the work session, where Strecker and Supino reported that during the past nine months, short-term rentals in Aspen generated $50 million in taxable revenue, accounting for approximately 35% of all accommodations. Those figures represent “a significant segment of the overall industry, and should be assessed to ensure it is operating within the city’s policies and community’s expectations,” said a memo written by Strecker and Supino to the city council in advance of the work session.

Council members agreed the situation is urgent due to STRs’ impacts on the Aspen community — and it needs to be swiftly addressed.

“If you’re asking what the goal is, I would say to stop the bleeding, whatever we can to do to stop the bleeding while we continue to corral the problem,” Councilwoman Rachel Richards said.

Aspen’s unchecked STRs industry got a jolt in October 2020 when city council passed legislation requiring all property owners who rent their condos or homes on a short-term basis — 30 days or fewer — to have a business license and a vacation rental permit filed with the city. The business licenses require the property owners to pay the city’s 2% lodging and 2.4% sales taxes. The rental permits are acquired after the property owners acknowledge an understanding of city laws pertaining to noise, nuisance and wildlife, for instance, as well as their own HOA rules as they pertain to renters.

Since the program’s implantation and new software that monitors STR activity in Aspen, Supino and Strecker determined that of the approximately 8,010 housing units within city limits, 1,205 have operated as STRs in the last year. From December through August, 995 of those properties paid their tax bills while 66 properties had not. Another 144 properties were identified as not having a business license.

Mayor Torre said capping the number of STRs in Aspen’s zoning districts also should be considered. Some areas could actually prosper with even more STRs, while others would benefit without any future STRs, he said.

“I’m open to considering that … I just want to put that in front of you for consideration,” he said.

Some condo-hotels in Aspen — The Gant and Aspen Square, for example — serve as short-term rentals and are located in zoning districts that reflect their use, Strecker and Supino said. Other properties, however, operate as STRs “in residential neighborhoods throughout the city which were not originally contemplated for revolving occupants and the associated disruption that may accompany each visit,” the memo said.

Councilman Ward Hauenstein urged city leaders to seek guidance from the Aspen Area Community Plan — a vision for the community by the community that was last updated in 2012 — when addressing the STR situation. The document is nonbinding but was intended to be a useful tool for informing council policy-making. The very issues the AACP addresses — from housing to traffic — have been impacted by STRs, he said.

“STRs are affecting the whole community … if we all pull out our copy of the AACP and look at what the vision is, I think the STRs are getting in the way of that,” he said.

The AACP says in part: “Zoning and land use processes should result in lodging development that is compatible and appropriate within the context of the neighborhood, in order to:

— Create certainty in land development.

— Prioritize maintaining our mountain views.

— Protect our existing lodges.

— Protect our small town community character and historical heritage.

— Limit consumption of energy and building materials.

— Limit the burden on public infrastructure and ongoing public operating costs.

— Reduce short- and long-term job generation impacts, such as traffic congestion and demand for affordable housing.

While STRs have been cited for straining city services and negatively changing the character of neighborhoods, for example, Councilman Skippy Mesirow also noted that some help fill Aspen’s growing void of affordable lodging.

“There are one-bedrooms going for $200 a night, and there’s value to that,” he said, though the councilman’s overall position was that government oversight and regulation is needed.

Results from the most recent November elections showed voters in Colorado ski towns and neighboring communities approving tax measures for short-term rentals.

By a 71% to 29% margin in Avon, near Vail, voters passed a 2% tax on short-term rentals to fund the housing program. Crested Butte voters, with 75% in favor, passed an excise tax increase from 5% to 7.5% on short-term rentals; those tax proceeds are used to fund the town’s affordable-housing project. And in Telluride, a 55% voting majority favored doubling license fees for short-term rentals and also pausing the issuance of short-term rental licenses through November 2023. Telluride voters also, in a 59% to 41% decision, rejected setting a cap on short-term licenses at 400.