Mark Kwiecienski: Guest opinion
July 4, 2011
Aspen City Council passed the preliminary reading of an ordinance last week and has sent it on to Planning and Zoning. The ordinance, as proposed, would require all free-market property owners in Aspen to get a revocable permit if they want to rent their property for periods of fewer than 30 days.
The primary argument for this proposal, according to the supporters, is to force payment of an estimated $100,000 of tax revenue on a newly expanded lodging tax, and to “even” the playing field. This leveling of the playing field is a ridiculous argument with far greater negative consequences than positive benefits. The compliance proposal is inappropriate and over reaching, similar to installing TSA-level security at the summer music concerts to make sure 100 percent of those attending pay for their tickets and don’t smuggle in a can of beer.
Public Planning and Zoning hearings are scheduled for July 5 and July 19.
The four main elements of the proposal, which would require owners to jump through a labyrinth of new compliance tasks in order to rent their property, are:
A) Hire a local owners representative.
B) Notify owners within 300 feet of the rental property that the property is going to be rented and provide the neighbors with the managers’ contact information.
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C) Get a business license from the city and pay a fee for it.
D) Get homeowners association approval. Many homeowners associations are sleepy and or nonexistent. Many sleeping dogs will be roused if this proposal is approved. You will see tit-for-tat spats amount neighbors. Why encourage this?
Planning said that there have only been five or six complaints about rentals in residential areas in the past few years. If this proposal passes, there will be a mushrooming of complaints and countercomplaints.
This proposal is a severely over-reaching property takings that would make property ownership rights more complicated, uncertain, and expensive. If there is some complaint against the permitted owner, the permit might be revoked. Proponents or the proposal have argued that if all rules are followed, there is no problem. The proponents are correct, as long as there are no problems. There will be problems, and some owners will have problems through no fault of their own, so this is a “takings.” If passed, there will be far more negative than positive as a result.
As I see it, the proposal’s few winners are also the proposal’s primary backers who are:
1) The lodge and hotel owners, and a few select property managers, who will pick up new rental customers who otherwise would have stayed with some of the independent homeowners who no longer chose to rent due to the hassle factor.
2) The property management companies will be in more demand and pick up more fees and new accounts because their representation service will now be mandatory, when now it is not.
The proposal’s losers are not as clearly visible. Here is my list:
A) The homeowners lose. Big time. They could lose their right to rent. They also will have to pay a property representative. They also will be faced with maintaining and keeping their permit and all the added reporting and compliance requirements other than just paying the taxes as they are now required to.
B) We all lose as the town loses diversity. Those homeowners who rely on a little more income in order to make things work for them might be forced into selling by this proposal.
What if they have a neighbor who might be their HOA president does not like them, who complains and the owner loses his permit?
This proposal is an invitation for opening the door for neighbor against neighbor spats.
Talk to others who live in communities where the government has proposed excessive regulation like this and see what the result has been. It is not pretty.
C) We all lose, as fewer sales tax dollars will be collected. In those peak times when the town is full there will be fewer people in town because the rental pool will have shrunk since a number of owners who now rent will decide that it is no longer worth it to rent their property.
There will be less business for shop owners and restaurateurs and fewer sales tax dollars collected. Short-term rentals spend more money per day than do long-term rentals. This proposal encourages long-term rentals over short-term ones.
D) The homeowner loses again, and then everyone loses. Many people buy own or buy property here because they can offset some of their expenses through short-term rentals.
The uncertainty inherent in a required revocable permitting system would lower property values across the board. The super-wealthy do not have to rent so they do not care. So, fewer transfer taxes would be collected because of the lower sales prices on the free-
market properties. And so the nonprofit beneficiaries of those transfer taxes lose too, which means we all lose.
E) The demand for deed-restricted housing supply is increased. There would be greater demand for deed-restricted housing stock by those who no longer can afford to keep their free-market homes.
Plus, new workers will be required to run the enforcement program.
Wait until the neighbors start complaining against their neighbors and the compliance department mushrooms, gobbling up more deed-restricted units.
There have been few proposals as ill conceived as this one. It deserves no further consideration.
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