City of Aspen knocking on the door of short-term rental scofflaws
February 27, 2018
The city of Aspen is on a path of cracking down on residents who rent their apartments, condos and homes via websites like Airbnb, thus skirting paying sales and lodging taxes.
Aspen City Council on Tuesday authorized Finance Director Don Taylor to seek bids by software vendors so they can identify owners who use online rental platforms.
If the city can track names and addresses, they can require owners to register with the municipality, obtain a business license and pay the requisite taxes.
It also would allow the city to get a handle on how widespread residential properties are being used as part of the lodging base. Then it becomes a matter of policy for the council to decide how much it wants to regulate what has become big business in the travel and online markets.
"Do we replace community in favor of the nightly money machine" that is the lodging business?, Councilman Bert Myrin asked.
It's not just about keeping the right balance of resort and community, it's also a fairness issue with hotels, lodges and management companies that pay higher taxes and play by a different set of rules, council members said.
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Online rental platforms like Airbnb, VRBO and HomeAway are increasingly able to shield owners of units. As a result, contact with them is very difficult, Taylor told the council.
HomeAway recently sent a mailer to Aspen property owners, soliciting them to rent their units via its website, and telling them how much money they could make.
City officials believe there is rampant abuse by people who rent or own within the Aspen-Pitkin County Housing Authority and use their units for short-term rentals. It's illegal to do so, partly because it has an effect of eroding the local worker housing stock.
Councilman Adam Frisch said any cab driver in Aspen will vouch that they have taken tourists to affordable-housing units that they say they are renting during their visit.
Airbnb is a particular concern of the city's because it has established a significant clientele in Aspen, according to Taylor.
"Airbnb is more difficult because they are the collection point; they actually make the rental," he told council, adding that there are hundreds of short-term rentals being booked this way. "It's very difficult to figure out who these rental owners are."
The city and Airbnb representatives disagree on how to address the tax issues, and it is unclear to the local government the extent of revenue that may have been collected — or due — but has not been paid, according to Taylor.
Airbnb has offered a standard agreement to municipalities in Colorado to collect and remit sales tax on behalf of their clients. The agreement is on their terms, however. Staff has numerous problems with the agreement, including that it doesn't allow the city to identify owners, so it can't enforce local laws that govern short-term rentals.
Some resort towns have signed the agreement, but not all. Mayor Steve Skadron suggested forming a coalition with resort communities that want to negotiate with Airbnb.
The company has made a deal with San Francisco that it won't rent to anyone who doesn't have a business license.
"That's exactly what we want," Taylor said. "If Airbnb would agree to rent to only licensed places, we are good."
Staff will pursue a possible coalition, but in the meantime they will find a software company to use web scraping and data matching tools to identify, or at least narrow down, the ownership of units that are offered for rent.
Councilman Ward Hauenstein said he supports that effort, plus whatever else to track who is participating in the online rental market and not paying taxes. He noted that companies like Airbnb must be held accountable.
"Why should a company come in and help what is, in essence, cheating?" he said.
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