Public polling on short-term rental tax begins this week in Aspen

Polling questions will ask if a 13% tax on short-term rentals is appropriate and what possible municipal projects additional revenue could fund, among other inquiries

If you are a registered Aspen voter and you receive a text or a phone call in the next week, you should answer it if you want to weigh in on whether there should a 13% tax on short-term rentals in the city.

Public polling on a potential ballot question for the November election begins today by FrederickPolls.

The city of Aspen contracted with the Utah-based polling firm earlier this year for $12,500.

Keith Frederick, founder of FrederickPolls, said he received the city’s 40-plus questions last week, and his firm will begin sending text messages on Monday to registered voters’ cell phones that reference the municipal government’s request for feedback on a possible ballot question.

Calls will start coming in starting on Wednesday and last through Monday, Frederick said.

“Answer the phone, because it’s a legitimate public opinion poll,” he said. “There’s a bit of exploration in the questions … value questions around short-term regulations and different types of vacation rentals.”

City Manager Sara Ott said the questions are centered around:

  • whether people think there should there be a tax;
  • at what rate;
  • should there be any consideration of the residential property rate when the properties are being used for commercial use;
  • and if a tax were to pass, what should the revenues be used for.

City financiers have plenty of ideas on how the tax revenue, estimated at $11 million annually at a 13% rate, could be spent.

There is a need to fund affordable housing, as well as capital projects like renovating the old armory building and replacing the infrastructure underneath the pedestrian malls downtown, and replacing portions of the city’s stormwater system and bridges.

The 13% rate was determined with a couple of factors in mind, with one being the inequity of assessed value tax rates on residential properties versus commercial ones.

The property tax rate for commercial property owners is much higher than for residential property owners, the latter of which are benefiting because their houses are being used for commercial activity, Finance Director Pete Strecker said.

In a presentation he made to Aspen City Council in June, Strecker said the difference in property tax revenue is $4.46 million, which is equivalent to a 5.4% tax.

Secondly, using the 65% affordable housing mitigation rate for short-term rental units being used in a commercial manner that generates employees translates into a 7.7% tax rate on a nightly basis that would generate $6.4 million.

The current combined sales tax rate in the city is 11.3%, so if the municipal government were to ask voters to pass a 13% rate on short-term rentals, tourists staying in those accommodations could be paying a total of 24.4% in taxes.

City Council recently passed an ordinance regulating short-term rentals, capping the number of permits that can be issued, how many can be in specific zones in town and the length in which they can be rented out.

Council in December placed an emergency moratorium on the issuance of new short-term rental permits until the end of September so city officials could get a handle on a fast-growing industry they say has created unmitigated growth in the community and impacts to neighborhoods.

A new permit system, enforcement regime and operational standards were designed to increase accountability for owners and managers to ensure their property and guests support neighborhood character, and reduce and mitigate community impacts.

Permitted properties also are subject to inspections and enforcement for compliance with life-safety, occupancy, nuisance and good neighbor regulations.

The new rules will take effect July 29 and the issuance of permits for 2023 will be accepted after that date.

Council agreed to grandfathering existing short-term rental permits in all zones, freezing the current market in place.

Staff will use nontransferability, abandonment and enforcement to reach the capped amount through attrition over time.

Frederick said he expects the phone survey on a possible tax to take between 11 and 13 minutes.

Based on the number of registered voters in Aspen, which hovers just below 6,000, 250 respondents will provide a representative sample, Frederick said.

“You are such a small community so that is a legitimate percentage of the population,” he said.