Update on Denver's STR/Airbnb ordinance

[James Carlson]

Hey Colorado Airbnb and VRBO enthusiasts!

I went to Denver's Short-Term Rental Advisory Committee meeting and thought I'd share this update on the Airbnb ordinance, enforcement efforts, and -- maybe most importantly -- the stirrings of some efforts to further restrict short-term rentals in Denver in the future. 

**A quick reminder that the key to Denver's Airbnb law is that you can only operate a short-term rental in your primary residence.

Big picture: The primary residency provision is generating a lot of complaints to the city. (As always, we point those interested in Airbnb and short-term rental investment properties to Colorado Springs. While the Springs is proposing an Airbnb ordinance, it is much more favorable to investors.)

Enforcement #s from Jan. 1-July 31, 2018

• 53 reports completed by Denver's excise and license division, all related to questions of someone's primary residence status
  • 47 provided necessary documents to prove primary residency
  • 6 cases referred to City Attorney's office
• 112 complaints of non-primary residency
• 70 open STR investigations

New requirements for new and renewing licenses

• Unlike before, you now have to prove your primary residence by providing at least two of the following documents: vehicle registration, driver's license, voter registration, tax documents or utility bill

Future options the committee is considering

** Note: any changes to the ordinance would have to go through the Denver city council process and therefore is months if not a year off. The below ideas are just being floated right now. Nothing is actually moving forward yet.

• Limit the number of days per month or year that you can rent your entire residence
• Require that a license holder reside in the primary residence XX number of days. (Currently, there is no minimum number of days you have to live there for it to be considered your primary residence.)
• Require evidence of neighbor support or at least proof of notification of neighbors. (Yikes!)

Thoughts????

[Alex M.]

I operate in NYC and we have very strict rules so I've had to be pretty savvy about getting around the rules and always looking for the loopholes:

New requirements for new and renewing licenses

• Unlike before, you now have to prove your primary residence by providing at least two of the following documents: vehicle registration, driver's license, voter registration, tax documents or utility bill

** Whats the problem here? Your utility bill will have your name on it anyway? What's to say that it has to be the place where you spend most your time? And then buy a vehicle, register it, send in the papers and then sell it.  Or if it's easier, get a license in CO, and then after registering switch it to whatever state you actually live in.  Takes a little maneuvering but if you're making 10's of K's of $'s per year per place, who cares? **

Future options the committee is considering

** Note: any changes to the ordinance would have to go through the Denver city council process and therefore is months if not a year off. The below ideas are just being floated right now. Nothing is actually moving forward yet.

• Limit the number of days per month or year that you can rent your entire residence
  • They did this in Boston.  Would love to hear how people are getting around it.  We dont have this in NYC (because its strictly illegal to do anything <30 days), but I have to create a new account for each property.  I am going to start getting burner phones so each account has its own phone number.  Fake names, addresses, and separate emails.  What's to stop people from just creating a new account once the first account hits its maximum?  You can use a photo editor to change the pics slightly (I do this too) and not be detected by any image recognition algo AirBNB may use.
• Require that a license holder reside in the primary residence XX number of days. (Currently, there is no minimum number of days you have to live there for it to be considered your primary residence.)
  • How is this enforced?  Are they going to do a Residency Audit?  That gets expensive.  So you open up a new bank account in CO, and give someone you know in Colorodo ATM authorization to use your debit card and put a prepaid amount on there for them to buy groceries each month as a tip for doing you the service.  Now you have a paper trail that you're "living" there.
• Require evidence of neighbor support or at least proof of notification of neighbors. (Yikes!)
  • OK so you pay your neighbor off.  I pay off Supers in my buildings all the time.  It's just a little greasing of the palms and as long as there's no harm and no disturbance, everything is smooth.  It's good old American business!

The way I see it, unless they start tracing your IP address to your computer's location and triangulating that way, OR AirBNB starts forcing you to provide a unique identifier like a SS# to open a new account and then somehow verifying it (You can still have friends and family have accounts this way) and using a blend of strategies to make sure you aren't gaming the system, it will be very hard for them to enforce this for those who are motivated to get around it... My 2 cents.