Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 736 votes
Hey so I am researching what actions STR owners could take against communities like those in Colorado who are using affordable housing as an excuse to violate property rights of owners. There are some 5th and 14th amendment issues regarding takings etc. I also am looking at possible exit strategies and one is appreciation. In Summit County alone property values are going up an average exceeding 30% a year. Theoretically a property owner could see their property value double in 3-5 years. With that in mind it would also make sense to take legal action against the municipal and county governments for economic losses. If property owners banded together this would be catastrophic for the local governments and possibly force them to rethink this.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Getting property owners to band together won't happen until it's too late. I would sell now while the market is high and go buy STRs where they welcome them.....fighting City Hall is a long losing game.....
We pulled out of Pagosa Springs, CO in February 2021 like the devil was chasing us. Our HOA Board was trying to limit units being used as STRs (I was on the board, and holding them off with a majority, but the minority members were making our life miserable with constant nit-picking and in-fighting). Locals were actually holding signs and picketing outside the Board of Commissioners office, lobbying that they "do something" about our "housing crisis." Allegedly, a "project" of affordable housing was constructed downtown by the post office with STR permitting and fee funds collected, but we later heard it was decommissioned and instead re-appropriated by the developer to private luxury townhomes. The whole thing made the paper several times and spooked the hell out of me. Thought I had wondered into Los Angeles and now I am in Wyoming for right this second. What a mess. We had a beautiful place with a mountain view and made a fortune selling. No regrets, it couldn't have ended any other way for us in that town. Let them fight over the carcass until they run out of other people's money. We are happier putting our money in places where the locals don't feel they somehow get a say in the disposition of our property rights.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
4y
So I don't think there are any "taking" of property. It is a restriction of use. You don't lose the property to the government. Zoning laws do the same thing.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
I think the OP meant 'regulatory taking' where the Govt does not take the property as in eminent domain, but restricts it's use, violating property rights. (I'm not a lawyer, just looked it up)
Though similar to zoning, this is different and is covered under the 5th Amendment.
Still not worth fighting City Hall, although someone probably will some day. Better to just leave the community and let it deal with it's new pet woke issue - 'affordable housing'.
Investor · Los Angeles, CA · Member since 2017 · 523 posts · 476 votes
4y
Nate, I am an attorney. I have been hearing Colorado is doing this. One thing I would keep in mind: A property regulation is typically only considered a taking(requiring compensation) if it majorly impairs or eliminates the "economic value" of the property. This is how the Supreme Court has ruled in the past.
If the property is still appreciating and this could be sold for profit or leased as a rental, then the case is considerably tougher. A regulation like this on STR does not sound like a taking at first glance, since the home could be rented, sold, demolished and redeveloped etc. I agree the law is ridiculous, but just something to consider.
If this were me, I would either convert to a long-term rental, or sell and purchase somewhere that wants your business. Best of luck and happy Thanksgiving!
Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
4y
If cities were really concerned about housing for lower paid workers, they'd allow more people to share a house. As it is now, most places restrict the number of unrelated adult renters to way lower than the number of people allowed as a family. Until they do that, they are not serious about the problem, because "affordable housing" isn't going to happen.
Hey so I am researching what actions STR owners could take against communities like those in Colorado who are using affordable housing as an excuse to violate property rights of owners. There are some 5th and 14th amendment issues regarding takings etc. I also am looking at possible exit strategies and one is appreciation. In Summit County alone property values are going up an average exceeding 30% a year. Theoretically a property owner could see their property value double in 3-5 years. With that in mind it would also make sense to take legal action against the municipal and county governments for economic losses. If property owners banded together this would be catastrophic for the local governments and possibly force them to rethink this.
When dealing with hot-button local political issues, it's usually best to get in touch with citizens and advocate for reasonable policies before the Council meets. Working on the back end can be tough. I agree that STR bans are foolish, however lots of foolish local policies get passed every week. Here are some examples:
1. Banning car, boat, ATV, etc. dealerships on all highways, even where many already exist.
2. Converting most by-right commercial uses to SUP-only.
3. Prohibiting any "mixing" of residential and commercial uses in pre-zoning areas where many mixed uses exist.
4. Convoluted fence regulations.
5. Doubling building setbacks in districts with numerous buildings recently built to the previous setback.
6. A policy giving the Mayor sole discretion to determine permitted "off-topic" discussions at City Council meetings.
I recently dealt with a city that stripped tens of millions of dollars of value from properties by severely restricting existing by-right uses. By performing the action in a rising market and evenly targeting many owners (especially those least-equipped to fight), the effects were likely diffuse enough to deter potential takings claims. By getting the word out publicly, we got the city to water down the proposal somewhat. Consider floating a citizen's initiative or run for office to make a bigger difference. The issue is larger than STR bans and IMO the right political approach can make a difference.