Aspen City Council passes limits on short-term rentals, continues hearing on residential development

Short-term rental permits capped to 75% of existing number and council will consider limitation to demolition permits to six a year later this week

Aspen City Council members listen to public comment from Julianne Keil during Tuesday’s public hearing on short-term rental legislation. (Carolyn Sackariason/The Aspen Times)

Aspen City Council on Tuesday unanimously passed an ordinance limiting activity around short-term rental properties in response to what has been determined as emergency conditions in the community when it comes to quality of life, environmental degradation and a lack of affordable housing.

The biggest change is reducing the number of short-term permits that can be issued.

At 11 p.m. on Tuesday, council continued the public hearing on two ordinances limiting demolition of residential properties and increased affordable housing mitigation to Thursday.

The new legislation is all laid out in 700-plus pages of documents supporting the new regulations in council’s agenda packet.

The regulations came after nearly seven months of city staff studying other communities’ responses to the fast-paced growth in vacation rentals and speculative real estate; consultants examining affordable housing generation and mitigation; thousands of hours of conducting community outreach; dozens of meetings among elected officials, industry representatives and subject matter experts; and major pushback by realtors, short-term rental companies and homeowners.

Critics of the new regulations filled council chambers on Tuesday stating that they will be harmed in numerous ways, whether it’s their livelihoods or their lifestyles, as well as unintended consequences.

Property owner Julianne Keil said the only way she can afford to live in Aspen is to rent her unit at certain times of the year and with the regulations, a black market could be created that the city won’t be able to control.

“I am getting about $2,000 a night for my unit, which is crazy right?” she said. “When you start restricting how many people can rent their units, my price is only going to go up because there is a smaller pool and that’s not really what we want for the greater good of Aspen.”

Council members listened to over an hour of public comment and debated very little at the dais on Tuesday.

Councilman Ward Hauenstein said council and city staff have listened to the public for the past several months and the new legislation attempts to address the impacts officials believe are a result of industry growth.

“I think that the work that staff has done is commendable, we’ve listened, we’ve had public outreach and we haven’t come up with an ordinance until we had outreach and community engagement,” he said. “I feel we have to start somewhere for something we’ve identified, and other communities, have identified is something that is out of control and in order to preserve the fabric of our community I think it’s an important first step and it may not be the last.”

Ordinance 9 approved by council caps the number of short-term rental permits to 75% of existing ones.

The length of time in which properties can be rented out varies based on the type and use the city has determined them to be, as well as what designated zone they are located in.

Three permit types were created for different short-term rental operations in the community.

Council amended the ordinance from first reading to allow short-term rentals who are owner occupied to rent up to 120 days a year rather than the first-contemplated 90 days.

Zoning requirements limit the location and number of short-term rentals in the community so they prevent unreasonable burdens on services and impacts on neighborhoods posed by vacation rentals, according to Haley Hart, the city’s long-range planner, and Community Development Director Phillip Supino.

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

The new regulations are formed around the city’s climate policy and the Aspen Area Community Plan, the latter of which is a guiding document for officials to base decisions on.

Short-term rental permit holders will have to provide educational materials to inform visitors about Aspen’s community values, as well as wildlife and public nuisance laws.

Some of the decisions and regulatory responses resulting from the city’s engagement process include favoring taxes over fees to mitigate for impacts that the short-term rental industry has on the community, according to city staff.

As a result, council is considering placing a question on the November ballot that if passed would put as much as a 13% tax on short-term rentals.

The revenue, estimated to be between $10 million and $11 million annually, would go toward building more affordable housing, paying for an aging and failing stormwater and other city needs.

Supino said citizens, council and staff have developed a leading-edge set of regulations that are tailored to Aspen’s economic and community context.

But he said the success of the new regulations developed in Ordinance 9 will need to be assessed on a far longer timeline.

Mayor Torre and his colleagues acknowledged that the ordinance and policy statements are living documents and can be updated as the program advances.

“I thought that there were a lot of great comments and there are a lot of concerns,” Torre said of those who spoke during public comment. “I think my takeaway from my whole day today and I was sharing earlier … were exactly along the lines of being able to amend this and seeing what happens when this hits the ground.”

The new regulations on short-term rentals will take effect July 29.

Council also in December passed an emergency moratorium that halted all new residential development until Aug. 8.

The moratorium is in response to an unprecedented amount of growth in recent years, with council members citing massive quality-of-life impacts to traffic, affordable housing, environmental conditions and other issues that are detailed in the Aspen Area Community Plan.

Council members said after deliberating for six hours they were too tired to responsibly decide on Ordinances 13 and 14 and continued the public hearing to Thursday at 2 p.m.

Ordinance 13 would allow the city to use what is called the growth management quota system to limit the number of demolition permits to six a year.

The ordinance also requires applicants to meet certain criteria for the approval of single-family and duplex residential demolition and redevelopment.

Some of the standards that must be met include waste diversion; reporting of carbon usage of the building process and materials for a project, as well as the future energy use of a home; ensuring homes are designed and built for potential future conversion to 100% electric and the accommodation of on-site photo-voltaic and battery storage systems.

Ordinance 14, also continued to Thursday, would create new rules around increased affordable housing mitigation for residential development to single-family homes and duplexes when they are demolished or square footage is added.

The primary change is the inclusion of sub-grade areas and garages in what counts toward mitigation, and the removal of the exemption for existing floor area in redevelopment scenarios.

Some longtime residents who own aging single-family and duplex properties that will be ready for redevelopment or remodel in the coming years said the increased affordable housing mitigation creates hardship for them because it could cost upward of $500,000 in fees.

The city responded to those concerns by placing a deferral agreement in the ordinance, so the mitigation fees do not need to be paid until the transfer of ownership of a property goes to someone who is not deemed a local resident, according to requirements of the Aspen-Pitkin County Housing Authority, which includes working in the county at least nine months a year.

If passed, Ordinances 13 and 14 would go into effect prior to the conclusion of the moratorium on Aug. 8.


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