Basalt short-term rental fee passes

Basalt Town Council voted on Tuesday to approve a fee on short-term rentals. The vote, passing 4-3, will impose a $2,535 per bedroom fee on STR operators. The new cost will be charged in addition to existing licensing fees.

The fee includes exemptions for residents who can prove their STR is their primary residence and who rent the unit for less than 60 days a year.

Tuesday’s meeting was the terminus of discussion about the resolution from both opponents and supporters over the course of three Town Council sessions. 

“It’s encouraging to hear everybody’s arguments one way or the other,” Mayor David Knight said on Tuesday. “They’re from the heart. They’re from the brain. I am empathetic to all of them, and this process has been eye-opening for me.”

Still, opponents to the resolution expressed their discontent with the fee prior to approval.

“Your residents, your voters, including me, absolutely elected you in hopes that you would facilitate policy that has a positive impact on the community,” Basalt resident Trevor Benthusen said at Tuesday’s meeting. “But we certainly did not elect you thinking you would impose something like this that would hurt us in such an impactful, negative way.”

Basalt Town Council members Hannah Berman and Angela Anderson said opposition to this ordinance has come from less than 1% of its population.

“This is what special interest lobbying looks like in real time,” Anderson said. “This is why there are so many policies that benefit such a small percentage of people at the expense of the majority of people because small, well-resourced groups can make a lot of noise on their own.”

There were 43 STR licenses issued in 2024, according to Basalt Town Manager Ryan Mahoney.

If every STR in Basalt in 2024 was owned and operated by one to two adults registered to vote in Basalt, that represents a maximum of less than 100 voters. In the 2024 local election, 2,845 ballots were mailed out.

This means that the upper limit on STR operators represented in Basalt elections was around 3.5% of eligible voters in 2024. Those operators represented a significant margin of the letters and statements made to the Town Council while they considered this resolution. 

The most frequently cited complaint from fee opponents was that the fee would overburden their costs and force them to stop operating their STR business. Some operators said that the only reason they can afford their home in Basalt is from collecting STR revenue, noting that a potential fee might push them out of their housing. 

“Median home prices increased 63%,” said Berman, “and I believe that a piece of why those home prices can increase is because you can generate income off your home in a way that you historically hadn’t been doing.”

Some Basalt STR operators contracted with a Boulder-based law firm to argue the proposed fee will run afoul of the law ahead of Tuesday’s vote. 

“These are significant risks to the town, all to attempt to pass a flawed tax dressed up as a regulatory fee,” said Jordan May of Frascona, Joiner, Goodman and Greenstein, P.C. in the letter to Basalt Town Council. “The data tells us that the end result of the Proposed Amendment will likely be a negligible increase in long-term rentals and minimal fee revenue.”

The law firm claims that the fee can be considered a tax, meaning it must be approved by Colorado voters per the Taxpayer Bill of Rights. The firm also argues that the fee is discriminatory due the carve outs for local homeowners and that the fee represents an attempt at “rent control,” a practice that is illegal in Colorado. 

Council members sat in an executive session, which is not open to the public, ahead of Tuesday’s session. According to their agenda, they were discussing the legality of this fee.

Despite the pushback, there was also notable support for the measure across the several meetings. Teachers, nonprofit employees, and residents from outside and within Basalt town limits came to express support for the resolution. 

“I just think it’s a step in the right direction,” said attendee Auden Schendler. “It’s not a silver bullet, but we gotta hack away at this problem.”

In letters and public comments, supporters expressed that the fee could disincentivize STRs in Basalt, potentially leading to some rentals entering the long-term rental market, and that the fee could recoup costs externalized onto the community by STRs.

The new fee will go into effect on June 5. According to Mahoney, many of the STRs operating in Basalt have already renewed their licenses and would therefore avoid the fees for another year.