Judge wants to hear city of Aspen’s side in moratorium litigation

City council earlier this month put hold on residential development and short-term rental licenses

The Aspen City Council’s temporary halt on residential development and applications for short-term rental licenses, made effective immediately through an emergency ordinance it adopted Dec. 8, will remain in place for now.

Judge John Neiley’s written ruling came Tuesday in response to a filing by attorneys for the Aspen Board of Realtors, which sought a temporary restraining order (TRO) to stop the city from enforcing the ordinance. Through the Aspen firm Garfield & Hecht PC, the TRO motion was filed at 11:30 p.m. Monday in Pitkin County District Court and came 11 hours after the board filed a lawsuit over the same issue.

Neiley’s order said he could not issue an ex parte TRO, which would have been granted without hearing the city’s position.

“At this early stage in the litigation, the court is not inclined to second-guess the city’s decision-making process, let alone enter a restraining order against it ex parte,” the judge wrote in a four-and-a-half page ruling. “The court is not inclined to enter an ex parte restraining order against the city on such a thin record. The City deserves an opportunity to be heard.”

Both the board’s complaint and TRO motion argued the City Council deprived the public of due process and violated the city’s home-rule charter and land use code by rushing through an ordinance under the auspices of an emergency.

An emergency ordinance can be adopted in unusually quick order, which is what the City Council did over the course of Dec. 7-8 by approving the moratorium. Typical ordinances are publicly noticed and take a longer period of time to be adopted, initially through the passage of a first reading, then at least seven days before a public hearing is held and where a second reading is voted on by the council.

The City Council’s moratoriums on residential development and short-term rentals came in the form of emergency Ordinance 27.

Part of the urgency to pass the moratorium, according to Ordinance 27, was the environmental damage caused by residential development activity in Aspen, which “contributes to climate change through transportation required to construct and service residential properties, the energy and impacts inherent in creating and sourcing the materials necessary for residential development, the natural resource consumption required for the operation of residential structures, and the production of solid waste and associated disposal impacts from the construction and operation of residential structures.”

As well, the ordinance said human-caused “climate change and the impacts to the ecological and economic health of the community constitutes an emergency and a threat to the health and safety of the residents of the City of Aspen and the global community.”

Short-term rentals, which are for periods of no more than 30 days, also have changed Aspen’s housing landscape, the ordinance said, noting that “recent evolutions in the residential real estate market and economy, including new financial dynamics, the proliferation of short-term rentals, have rendered elements of the Land Use Code inadequate to respond to local affordable housing needs.”

Garfield & Hecht attorney Chris Bryan, who is litigating on behalf of the board, said Tuesday that other governmental jurisdictions have passed moratoriums related to STRs and development, but not through the expedited means of declaring an emergency.

“Due process is important and it’s a big deal, and we’re alleging that this emergency ordinance was not done in accordance with the city’s own law,” he said, adding the ordinance makes sweeping conclusions and lacks specifics justifying an emergency.

Neiley’s order denying the TRO touched on the due-process argument.

“(Aspen Board of Realtors) is correct that if the City failed to adhere to its Charter and Land Use Code by not providing proper notice and other procedural safeguards, there may be a viable due process claim,” the ruling said.

The question, then, is whether an actual emergency existed that justified the ordinance, the judge’s ruling said. That is a question before the court that is unanswered for now.

City attorney Jim True could not be reached for immediate comment Tuesday. The city has 21 days to respond the TRO motion from the date of its service.

Neiley’s ruling also said the TRO motion did not adequately demonstrate the moratorium is causing economic harm to the Aspen Board of Realtors’ 800 members, as well as another 500 affiliate members who include architects, planners, contractors, property managers, attorneys and others in the industry of residential development and short-term rentals.

“At this point, the allegations of immediate harm and irreparable injury are purely speculative,” said the ruling. “At the minimum, the Court finds that the City should be afforded an opportunity to defend against (ABOR’s) claims of irreparable harm and more fully develop the record.”

Bryan said the moratorium, now three weeks old, already has put a “bunch of people stuck in limbo — property owners who might want to renovate their house, people who want to sell their house but nobody is going to buy their properties” without knowing and understanding new land-use code amendments the City Council has yet to consider.

The lawsuit, meanwhile, seeks injunctive relief and a declaratory judgment that the moratorium is unenforceable. The suit identified the council’s five officeholders as individual defendants, along with the city of Aspen.

The residential moratorium is in place until June 8, with the short-term rental pause scheduled to be lifted after Sept. 30.