Aspen City Council agrees on cap for short-term rental permits

Future ordinance could include 75% cap of existing short-term rentals in town

Aspen City Council is zeroing in on regulations on the local short-term rental industry, and Monday night they agreed on capping the number of permits to 75% of existing ones, which allows for 398 residential units across town.

That number represents 8% of residential units across the city’s 11 zones and excludes owner-occupied short-term rentals and lodges.

A majority of council agreed to the 75% cap during a work session Monday and directed staff to include that number in a future ordinance that will be deliberated as early as May 24.

Councilwoman Rachel Richards said that could be almost as many 2,000 people who are not mitigated for in the city’s traditional scheme of growth management.

“I am really looking at the impact on a community that does not have the workforce to sustain itself today,” she said. “I looked at staff’s recommendations and thought they were really very reasonable and actually somewhat generous given the challenges we’re facing.”

There are currently 535 short-term rental permits active, which is 11% of all residential units.

Mayor Torre said he supported a higher cap at 10% of all residential units in town.

“As I was walking around some neighborhoods thinking about that impact, one out of 10. … I did my math in reverse and looked at what is my tolerance level, what do I think the community’s tolerance level is,” he said.

Council late last year placed an emergency moratorium on the issuance of new short-term rental permits until September so city officials can get a handle on a fast-growing industry that has created unmitigated growth in the community and impacts to neighborhoods, according to officials.

Phillip Supino, the city’s community development director, explained that short-term rentals can be the most impactful in terms of community infrastructure and neighborhood character because they are dispersed throughout town.

The permit system, enforcement regime and operational standards would increase accountability for owners and managers to ensure their property and guests support neighborhood character, and reduce and mitigate community impacts, according to Supino.

Permitted properties also would be subject to inspections and enforcement for compliance with life-safety, occupancy, nuisance and good neighbor regulations.

Staff will include a “three strikes” rule, where three enforcement actions against a permitted short-term rental would result in permit revocation.

The majority of council also favored grandfathering existing short-term rental permits in all zones, freezing the current market in place.

Staff will use nontransferability, abandonment and enforcement to reach the capped amount through attrition over time.

Council members have previously said they favored a lottery to get to a lower number of capped permits but changed their minds once those in the industry and staff successfully argued for grandfathering.

Supino said staff’s recommendation to go with a higher cap number and grandfather existing permits, coupled with other regulations, will be “highly effective at reducing and mitigating community impacts on a relatively short timeline.”

Councilman John Doyle said he agreed with that approach.

“It just makes it easier for the people that already have permits not to claim foul,” he said.

Council members tentatively agreed with staff’s recommendation to limit owner-occupied short-term rentals of 90 days per permit year but want to have further discussion when they consider it in an ordinance later this month.

Some council members said they would consider up to 120 days.

“We’re not handcuffing ourselves and throwing away the key,” said Councilman Ward Hauenstein. “We can always make changes in the future based on what these regulations deliver to the community.”