Local Cities Call a Temporary Time-out on Issuing More STR Units
Bob Volpe and Rick Langenberg
Woodland Park City Attorney Nina Williams is now reviewing recommendations from a joint meeting between the planning commission and city council on how to deal with short-term-rentals (STRs).
And similar STR scrutiny is now in process in both the city of Cripple Creek and in Green Mountain Falls, as many town are experiencing an explosion in STR activity.
This hot topic, involving vacation homes rented out for 30 days or less, is an issue that has grabbed the attention of nearly all communities in the Pikes Peak region, and many across the state. The city of Woodland Park has already imposed a moratorium on new STR units, until it finalizes more guidelines
At that Woodland Park joint forum, Assistant City Manager Rob Felts and Communications and Marketing Coordinator Grace Johnson provided the group with key findings from the community outreach efforts that staff has been conducting over the past several months.
The recommendations staff came up with include: updating city code, separating STR licenses from business licenses, making licenses tied to an individual and being non-transferable, setting a cap on STR licenses potentially by zone (exempt current licensed STRs), prohibiting sub-leasing for STR purposes and addressing off street parking and occupancy limits based on bedroom space. In addition, the guidelines call for providing a 24-hour contact, self-attested inspections, good neighbor rules and collaborating with HOAs and covenanted communities.
Staff also suggested some other ideas that city leaders may consider. Those include: prohibiting non-owner occupied STRs in single family residential zones (current licensed holders would be exempt until property ownership changes); barring STRs in multi-family zones with no legacy exemption, and imposing a minimum night stay requirement.
The current moratorium on new short-term rentals remains in effect in Woodland Park until October 14. At that time, the moratorium will expire unless prior action is taken, such as extending or removing it.
The city attorney is creating a draft ordinance for the city council to review and revise as needed. There will be a follow-up work session between city council and the planning commission on August 18 at 5 p.m. to review and discuss the draft ordinance
The one issue the city cannot address is the taxing of STRs, short of a ballot measure and election.
During an earlier sate legislative session, the Colorado general assembly passed HB 20-1093, which authorizes counties to adopt ordinances to license and regulate STRs. The bill became effective September 14, 2020.
Legislators have also attempted to increase taxes on STRs in recent years.
Legislation was introduced previously proposing to reclassify residential properties leased as STRs, which are currently taxed at a lower rate, to “nonresidential” (i.e. commercial) properties that are taxed at a rate more than three times higher than residential properties. A similar bill was introduced by the general assembly’s legislative oversight committee concerning tax policy and task force in 2021. While the 2020 and 2021 bills were ultimately rejected, a bill to reclassify the tax status of STRs is expected to be introduced in the next legislative session.
Ballot initiatives to increase taxes on STRs to support initiatives to offset or counteract the effects of STRs have become increasingly popular. These efforts are particularly popular in mountain resort towns, which face critical housing shortages for resort workers. For example, in November 2019, Telluride voters approved a 2.5 percent tax on all STRs, effective January 1, 2020, to be applied to an affordable housing fund.
STR Action in Cripple Creek and Green Mountain Falls
Woodland Park isn’t the only local city struggling with this issue.
The city of Cripple Creek has joined the list of local communities seeking a timeout in enacting rules for short-term rental (STR) properties.
The city of Cripple Creek’s moratorium against licensing new STR units has been extended until Nov. 2. It would have lapsed in mid-September unless action was taken.
Under its revised approach towards STRs, the city will extend their current cap from 28 to 35, with the possibility of slight increases every year.
But officials made it clear at a recent meeting this extension action isn’t part of an effort to squash these units, often referred to as vacation homes. They just need more time to adopt guidelines and regulations and to enact a new STR ordinance. That STR review should occur shortly.
One issue of concern in Cripple Creek deals with some folks doing STRs, under the table without licenses, based on an inquiry by an outside company reviewing online sites used by STR operators in Cripple Creek. “They need to step up to the plate,” said Councilman Mark Green, in describing the forthcoming licensing process. Also, under the new plan, an administrative hearing officer will handle disputes over problems, following city citations. “We want to take the process out of the administrative court,” explained Special Projects Manager Jeff Mosher.
This idea, though, got a cold response by Mayor Pro Tem Tom Litherland, who questioned growing personnel-related expenses. Most concerns, though, deal with STRs not impacting the current housing shortage for local workers.
In Green Mountain Falls, the town recently held a lively public workshop on the issue at the Sally Bush Community Center and outlined a laundry list of ideas for guidelines. The meeting featured heavy participation from STR property owners, who maintained that they favor more guidelines.
GMF has a cap of 60 STRs, a level it will reach shortly. Elected leaders don’t believe this cap will be raised. Despite a consensus on the cap, views are mixed locally regarding this issue.
In fact, a license expansion bid for one STR property got ugly at a recent GMF Board of Trustees meeting and nearly turned into an all-out neighborhood verbal brawl.
Like Cripple Creek and Woodland Park, some current STR operators in GMF are concerned about unlicensed vacation home operators who are tarnishing the industry.