Voters in end-of-the-road Crested Butte and Telluride stopped short of restrictions intended to slow and limit short-term rentals in the tourist-dependent communities.
Colorado voters in several resort communities approved increased fees and taxes meant to squeeze more revenue for affordable housing from short-term rentals. But voters in end-of-the-road Crested Butte and Telluride stopped short of heavier restrictions intended to slow and limit short-term rentals in the tourist-dependent communities.
Jim Day, who is retired and lives part time in a home he and his wife bought in Crested Butte 30 years ago, has attended several town council meetings this year, speaking out against the “community housing tax” that would levy a $2,500 annual fee on homes that are not occupied half the year by owners or locals.
Last week he and another second-home owner spent several hours in front of the local post office, handing out flyers that read “If the town administrators and attorneys will not listen to us, you are next.”
“I’m sure we swayed many locals,” Day said. “Town admins continue to increase spending and ask for more money from homeowners, but are unable to cut their budgets at the same time. If only our personal household budgets could operate in such a wanton manner.”
Crested Butte second-home owner Jim Day spoke at several town council meetings before directly pleading with local residents to not support a proposed annual tax on homes that sit empty half the year. (Courtesy Jim Day)
In Summit County, voters approved a 20-year extension of the sales tax that funds the local housing authority. Avon voters approved a 2% excise tax on short-term rentals to raise at least $1.5 million for affordable housing. Voters in Ouray also approved a new 15% excise tax on short-term rentals for both workforce housing and wastewater treatment facilities. Leadville voters also approved an increase in lodging taxes on short-term rentals.
A citizen-led petition that would have banned short-term rentals in single-family homes in Frisco missed the ballot.
“Hopefully people are inspired to participate in the process and demand a voice,” said Frisco resident Hayes Walsh, who turned in a petition last month calling for a ban on short-term rentals but was rejected because many signatures did not qualify. “Majority consensus within the community should be the guiding factor determining how to approach solutions.”
Crested Butte voters overwhelmingly approved a 2.5% increase in lodging taxes on short-term rental units to help pay for more affordable housing. With the increase, Crested Butte will soon collect a 7.5% excise tax on short-term rentals to support workforce housing, which is part of a 20.9% total tax on lodging. As of September, lodging tax revenues are up 59% over the same stretch of 2020, which set an all-time record. Crested Butte caps the number of short-term rental licenses in town, so the tax bump this year is not from new units but from visitors staying longer and paying more for rental units.
Voters in Crested Butte rejected the community housing tax. The original proposal by town staff pitched a $10,000 annual fee on unoccupied homes that would generate as much as $1.9 million a year for affordable housing development.
State lawmakers last week nixed a plan to impose commercial tax rates on residential homes that owners rent to vacationers. That leaves regulation of short-term rentals to towns and counties. And just about all the mountain municipalities in Colorado are doing something with new rules, taxes or fees. The idea is to slow the growth of vacation rentals while communities address a labor shortage made more critical by the lack of affordable housing for local workers.
The statewide proposal would have more than tripled property taxes for owners of short-term rental homes, creating a deeper revenue stream for schools, fire departments, libraries and other districts that rely on property taxes.
As more communities crack down on short-term rentals, the industry’s leaders — like Expedia and Airbnb — are motivating owners to speak up and defend the business of renting homes to visitors.
In Colorado, that means email blasts to thousands of property owners urging them to speak up. Many hosts and property managers answered the call last Thursday, a day after the Legislative Oversight Committee Concerning Tax Policy rejected the proposal to change the property tax formula for vacation rental homes. The committee’s task force heard from dozens of local leaders and investors.
“There is quite a bit of advocacy work across the entirety of the industry right now,” said Philip Minardi, the head of public affairs for the Expedia Group, which owns Vrbo and Homeaway.
Minardi said his team has been speaking with property managers and hosts in 17 Colorado vacation rental markets in recent months.
“A lot of them are asking where this animosity is coming from. They ask us ‘How do we explain to elected officials and the community that we are good actors and we are responsible members of this community?’ We’ve been around a long time and ultimately we want a solution that addresses these housing and labor concerns but does not push the industry underground.”
The short-term rental industry rallied in Denver in 2016 as the city’s leaders measured possible regulations for vacation rentals. Industry leaders have launched similar efforts recently in Seattle, San Diego and Louisville, Kentucky, meeting with locals and property owners to help work through housing struggles.
“What we learned … is that the animosity — the us-versus-them, winner-take-all philosophy — that does not work,” Minardi said. “Communities across Colorado are trying to experiment with different solutions and ultimately the answers will come through consensus.”
Summit County Commissioner Tamara Pogue told the task force last week that while her county’s tourism economy is dependent on the nearly $80 million impact of short-term rentals, “the burden on our infrastructure is unfathomable.”
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