Light to be cast on Aspen’s underground rental world | AspenTimes.com

Light to be cast on Aspen’s underground rental world

City of Aspen officials are working toward tracking and making thousands of property owners who rent their homes on a short-term basis pay the required lodging and sales taxes.

There are between 1,000 and 3,000 property owners who rent their condos, apartments and homes in Aspen each year, yet only 70 people obtained vacation rental permits in 2019. In 2018, that number was 48, according to city officials.

After hearing the potential impacts to local, legitimate leasing companies that pay sales and lodging taxes on behalf of their clients, Aspen City Council on Tuesday tabled a policy resolution that would have required each individually addressed vacation rental property or unit obtain a $150 business license.

That is very different from what the city’s land-use code currently requires, which is that if an individual or business represents more than one vacation rental then only one business license is required.

City officials believe that requiring all short-term rental property owners to obtain a business license and a vacation rental permit will allow them to better track the location and type of properties being used in that manner.

The city’s finance department plans to roll out new software in January that will scrub the internet to identify properties in the rental pool.

The software, called MuniRevs, is designed to streamline the process for the public, better monitor applications, track issued licenses and signal expiration dates.

The real problem lies with property owners who use sites such as VRBO or Airbnb, and dodge the 2% lodging and 2.4% city sales taxes.

Owners of local leasing companies and representatives of condo complexes that have hotel services like The Gant or the Aspen Alps told council Tuesday that the proposed land-use changes would hurt their businesses if they have to pay $150 for each unit they manage.

It would be a big hit to vacation rental companies, since they are already competing at a disadvantage because of rogue short-term rental properties being marketed thousands of different ways on the internet, said Tricia McIntyre, representing Aspen Luxury Vacation Rentals.

She characterized the rental landscape as the “Wild Wild West.”

Councilwoman Rachel Richards said they are trying to address that.

“It’s a disruptive industry and we are trying to sew the pieces back together again and make it fair for everyone,” she said.

Wendalin Whitman, who owns Whitman Fine Properties, which has a luxury real estate leasing arm, told council that forcing all of her clients to pay a $150 business license fee is targeting the wrong people.

“The one person who is obliging and paying the sales tax, and I have to go collect and pay these individual business tax licenses (for my properties)?” she said, adding her company would have to absorb the cost. “This resolution is really punishing the people who are helping you and not going after the individuals” who rent their properties on VRBO, Airbnb and HomeAway.

On Wednesday, another vacation rental property management company, iTrip Vacations Aspen Snowmass, weighed in on the issue.

“It’s onerous and costly for small businesses,” co-owner Kim Allen said. “There is a vacation rental permit process in place. Why not enforce that program more diligently?

“Please don’t punish those that are abiding by the current policies and procedures.”

Council members on Tuesday recognized the complexity of the issue and decided to pump the brakes until further research can be done.

They also are taking into account that “condo-tels” like The Gant should probably be in a different class because they offer on-site property management and collect taxes on behalf of their clients.

Elected officials are trying to make it equitable for all by creating a level playing field so that everyone is paying.

They also have concerns about rogue short-term rentals not providing proper services like a property manager and safe conditions, such as having carbon monoxide detectors in the units.

“It’s making sure that the town is offering something that is safe, is high quality and is consistent as it can be,” Councilwoman Ann Mullins said. “We have very little control of the safety and quality of these places.”

Richards said as a former Pitkin County commissioner, the management of short-term rentals is an issue outside of the city as well.

“This has been a huge issue for counties. … It’s the five Ps — pets, pot, parties, poop and parking,” she said, adding more time is needed to develop the right way to enforce and implement the new laws. “I want to get it right and take the time to get it right.”

City Finance Director Pete Strecker confirmed that the city researched multiple towns and concluded that there are varying approaches to short-term lodging.

Some communities restrict which property types and what locations can be used as short-term rentals; some require a business license and vacation rental permit or license; some allow vacation rentals to file under a “property manager/responsible party” but require every property to have a vacation rental permit and or license.

csackariason@aspentimes.com


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