Denver cracking down on basement/ADU STR rentals

[James Carlson]

Through my contacts in the Airbnb world here in Denver, I'm hearing a lot of complaints about the city cracking down on basement unit and carriage house short-term rentals. I've heard of three distinct scenarios:

-- Sounds like the city is denying STR license renewals to basement units with any kind of kitchen. And this is in homes where the owners are meeting the primary residence rule.

-- I've also heard of some instances in which even if the basement doesn't have a kitchen, the city is requiring owners to remove any kind of door that blocks off the upstairs unit from the downstairs unit. 

-- Finally, I had some people tell me that their old carriage house is being declined for an Airbnb because it doesn't meet certain setback standards. (According to two people, this is for carriage houses that were built well before any current lot-coverage/setback limits were in place.) 

Anyone else out there seeing this? I'm not a complete government-get-out-of-my-business guy. I think it has a strong role to play, but this seems a step too far to me. 

[Ryan Williams]

Hey @James Carlson, thanks for the insight here! I haven't heard this from anyone and haven't experienced this myself, but it is concerning.  

So, is it primarily building code violations or short term rental standards that are violated that they are citing as reasons for denials? 

I have a few different people who are planning extensive remodels/additions in order to start and operate a STR in Denver in compliance with regulations - would you advise these people get a license first even if they are over 6 months out from their renovation being finished, just in case their license would be denied? I was just under the assumption if all the primary residence requirements were met you would have little problems getting a license from the city.

Thanks!

[Nick Cooley]

Quote from @James Carlson:

Through my contacts in the Airbnb world here in Denver, I'm hearing a lot of complaints about the city cracking down on basement unit and carriage house short-term rentals. I've heard of three distinct scenarios:

-- Sounds like the city is denying STR license renewals to basement units with any kind of kitchen. And this is in homes where the owners are meeting the primary residence rule.

-- I've also heard of some instances in which even if the basement doesn't have a kitchen, the city is requiring owners to remove any kind of door that blocks off the upstairs unit from the downstairs unit. 

-- Finally, I had some people tell me that their old carriage house is being declined for an Airbnb because it doesn't meet certain setback standards. (According to two people, this is for carriage houses that were built well before any current lot-coverage/setback limits were in place.) 

Anyone else out there seeing this? I'm not a complete government-get-out-of-my-business guy. I think it has a strong role to play, but this seems a step too far to me. 

Hey James, thanks for sounding the alarm. I haven't seen this in practice, yet, however. Clients of mine just received their STR license from Denver less than 2 weeks ago for a primary-residence/basement STR unit.

Will be interesting to see what Denver tries next.

[Don Konipol]

Quote from @James Carlson:

Through my contacts in the Airbnb world here in Denver, I'm hearing a lot of complaints about the city cracking down on basement unit and carriage house short-term rentals. I've heard of three distinct scenarios:

-- Sounds like the city is denying STR license renewals to basement units with any kind of kitchen. And this is in homes where the owners are meeting the primary residence rule.

-- I've also heard of some instances in which even if the basement doesn't have a kitchen, the city is requiring owners to remove any kind of door that blocks off the upstairs unit from the downstairs unit. 

-- Finally, I had some people tell me that their old carriage house is being declined for an Airbnb because it doesn't meet certain setback standards. (According to two people, this is for carriage houses that were built well before any current lot-coverage/setback limits were in place.) 

Anyone else out there seeing this? I'm not a complete government-get-out-of-my-business guy. I think it has a strong role to play, but this seems a step too far to me. 

This begs the question; of the 20 largest metropolitan areas in the U.S., are there any that haven’t limited short term rentals through local ordinance or regulations?  Further, for the regulations, is 30 day rental period the cut off point where the regulations kick in?

[Bonnie Griffin Kaake]

Rentals of less than 30 days fall into the category of short-term rentals like Airbnb and more and more cities are putting regulations in place to stop them due to excess traffic and parking in neighborhoods. If the rental is considered a long-term rental of 30 days or more, as long as the zoning qualifies, you are good. 

[Joshua Messinger]

Hey @James Carlson! 

This definitely is the new trend nowadays in major cities as they continue to limit and regulate the areas. We should only continue to expect this from the cities across the country and get buckled up for more! 

I'd love to talk more sometime in the future! If you ever need anything don't hesitate to reach out! 

All the best, 

Josh 

[Katie Gade]

They are cracking down on carriage house. I was flagged when we renewed our license, and Denver zoning had to weigh in on the topic. Zoning said that a carriage house is considered a second primary residence on the parcel. Since you can only STR your primary residence, it is denied based on it being a second primary. We are petitioning city council, and have filed an appeal with Denver STR regulators. Not sure how it will go, but seems rather silly to allow ADU's to rent STR, but not carriage houses.

[Charley Silverman]

@James Carlson,

I am indeed in this situation myself. Currently in the STR license renewal process and have had zoning out to my place for an inspection. The inspector was very vague but flagged me for issues which very accurately match what you reported seeing. Issues with too many kitchens and blocking doors and setbacks. The STR person from Denver EXL said that I can continue to operate so long as my license is in a "pending" state, but there is no indication of how long that will be, nor if the final verdict will be in my favor or not.

[James Carlson]

@Katie Gade

That just doesn't make sense. Under the long-existing Denver STR rules, if your carriage house is truly an accessory dwelling unit, and was either permitted under current Denver zoning codes, or was grandfathered because it was built prior to current zoning ordinances, then you are totally allowed to do Airbnb and short-term rentals in it. (See the zoning code interpretation letter from Denver's Excise & License where they specifically address this in Question 2.)

A few questions come to mind: 1. Is the structure actually allowed? Was it permitted under new regulations? Or grandfathered in? 2. Is your property actually considered a duplex, not a home + carriage house? If so, the other unit is considered someone else's primary dwelling unit, and not an ADU under the Denver STR laws.

Please update us here when you get any results of your appeal. Best of luck to you. 

[James Carlson]

@Charley Silverman

Dang, man, sorry to hear that. I'm not a Denver government basher and generally think some STR rules are necessary to balance property rights with concerns about neighborhood character and housing affordability. But the steps the Denver Excise & License Department has taken with Airbnb in the last year or two seem a too far.

So is it an ongoing investigation of your property? Or when the inspector comes out, do the issues they flag act like a speeding ticket in a way, where you've got to pay it and stop operating or else appeal/fight the ticket? 

I guess it's good that they allow you to continue operating while this goes on, but being in limbo is not a good place for anyone operating an STR. Keep us updated here. Thanks.

[Charley Silverman]

@James Carlson,

The process remains in limbo nearly two months after my last post. Information from the city has been difficult to come by. The inspector did not "pass" my house for relicensing because of the issues she found. There was never any documentation that was supposed to be sent my way, more like I was supposed to figure it out. After calling the city and meeting with people behind the desk at Zoning and Planning, I came to understand that the only issue for which my house was actually flagged was for having too many kitchens. With additional zoning code information gleaned from the city, I learned that other violations exist which were not flagged, for example lock-off doors and too much cement covering too much of my driveway. These additional violations were mentioned at the time of inspection, but not provided to EXL as violations. Extra limbo. I have since brought on a law firm to help me get right with the city. It remains unclear how to cure my issues, or if the city will recognize my cures when I get to that point. My most likely courses of action presently are to remove lock-off doors and an additional kitchen in my home. My STR is in an unpermitted addition from the 1980's, complicating matters. My home is in a zoning classification which currently does not allow for ADU's or duplexes or any other type of CIDU. Securing a zoning variance and then an ADU permit is a very logical, but highly unlikely outcome.