Aspen short-term rentals could be in for a long-term shakeup
City Council looking at STR business options, including caps and bans
It will take an act of Aspen City Council to slow down the short-term rentals business, which is what it plans to start working on come Dec. 7.
Council members on that date likely will entertain the first reading of a policy resolution concerning short-term rentals. Passage of the first reading would advance the matter to a Dec. 14 public hearing and second reading of the resolution, according to City Manager Sara Ott. That’s also when the council would vote on final approval.
Earlier this month during a work session, council members concluded the city needs a better grasp on short-term rentals, also called STRs, and their impact on the Aspen community. A start would be capping the number of STR licenses for 2022 and banning new ones, the council agreed.
Other ideas the council floated included reducing STR license terms from one year to six months, creating a tiered fee structure for STRs based on the properties and their locations, and customizing the STR license caps to the city’s various zoning districts.
The pandemic has ushered in a new way of life for Aspen residents, and STRs have been cited as a one of the prime catalysts for more traffic headaches, less available worker housing, and the changing character of residential neighborhoods.
“STRs are affecting the whole community,” Councilman Ward Haunstein said at the work session.
Not all, however, are persuaded that reining in STRs will remedy Aspen’s housing woes.
“I don’t think anyone has seen (the policy resolution), so I don’t think we can fully oppose it or be in favor of it, but I would say in general that the Aspen Board of Realtors would love to work with the city and be part of the conversation,” said Ashley Chod, who is chairwoman of the board. “For me personally, I think we all know we have worker shortages and have an employee housing shortage, but I don’t know if restricting short-term rentals will have any direct effect on increasing housing for workers.”
Chod, who has worked in the rental business for 14 years, also said she’s not convinced property owners who use their places for STRs — which the city defines as no more than 30 days — will avail their homes to employees in the wake of new legislation.
“Whether it’s a house in the West End or a condo in the downtown core, if people bought it to rent it out, they are not going to give it to a long-term worker because they can’t get a (STR) license,” she said. “So I’m just not sure rushing this is going to solve the issue at hand.”
At the STR work session, council members noted a sense of urgency to contain the industry rather than letting the market continue at its torrid pace.
“If you’re asking what the goal is, I would say to stop the bleeding, whatever we can do to stop the bleeding while we continue to corral the problem,” Councilwoman Rachel Richards told Finance Director Pete Strecker and Community Development Director Phillip Supino at the meeting.
Yet shaking up the STR industry at the onset of the winter tourism season might not be the best move, Chod said.
“Our concerns are ski season just started, and people book anywhere from a week in advance to a year in advance,” she said. “This doesn’t have to be rushed through the holidays. It feels rushed.”
At the Nov. 16 work session, Strecker and Supino, responding to an assignment from City Council to give a detailed report on the state of STRs in Aspen, stated short-term rentals in Aspen generated $50 million in taxable revenue from January through September. Given STRs for the first nine months of the year accounted for 35% of the accommodations business in Aspen, the STR industry “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.
Supino and Strecker also told the City Council 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, they said.
The two were able to make those findings after the city in October 2020 adopted legislation requiring all property owners who rent their condos or homes for 30 days or fewer to have a business license and a STR 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 the laws of their homeowners association and the city.
Strecker declined Monday to discuss details of the current resolution being drafted. The city as of Monday morning had received 27 applications for STR licenses for 2022, he said. Those applications will not be processed until on or after Dec. 15, according to Ott.
“To date, we don’t have a major flood of applications,” Strecker said.
Dec. 15 also comes one day after what would be the council’s second and final reading of the policy change, if all goes according to script.
Chod said the city should consider collaborating with STR property owners rather than declaring bans and caps.
“Being a local and a real estate broker, we don’t deny housing has become a lot harder for locals and workers,” she said, “and we think there are solutions — maybe incentivizing a homeowner to do a long-term rental or do a seasonal rental, as opposed to mandating they’re not allowed to do STRs.”
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