Short-Term & Vacation Rental Discussions

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James Carlson#1 Denver Real Estate Forum Contributor
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Colorado mountain towns cracking down on Airbnb

James Carlson#1 Denver Real Estate Forum Contributor
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  • Denver CO | Colorado Springs, CO
Posted Nov 4 2021, 21:30

Any Colorado vacation rental owners out there in the ski-town areas?

Sounds like many of the bigger names are curbing Airbnbs and short-term rentals with various rules and regulations. The urban cities have been doing this for years. Denver and nearly the entire metro area are out for Airbnb investors. (There are still two Denver-area cities that allow it.) Colorado Springs allows non-owner occupied STRs but only in small pockets in the city. But it's interesting to see the ski towns that rely so heavily on tourists taking action.

Breckenridge passed a cap on short-term rentals, a cap that is already lower than the existing Airbnb stock. Summit County has temporarily stopped accepting new STR license applications. Frisco might consider a ballot measure to outright ban them. Dillon considered a moratorium. (It failed, but still.) And then several other cities are considering increasing taxes and other measures.

Anyone out there in these areas? What are you seeing on the ground? 

I still like the Denver-area cities that allow Airbnb investments. And what I call the middle mountain towns like Evergreen and Conifer near Denver and Woodland Park and Divide near Colorado Springs are still open for STR business and can do well.

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Bruce Woodruff#3 All Forums Contributor
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Bruce Woodruff#3 All Forums Contributor
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Replied Nov 9 2021, 07:13
Originally posted by @Ryan Moyer:
The one thing we have going for us is that we make the towns money, and they like money.  But as soon as a larger source of money, like a ski resort, is at odds with us we know who they are going to support.

I've thought about this, and without doing the math down to the penny....do resorts/hotels/Etc really make the town that much more? When you factor in not only property taxes, but also the additional spending that our guests contribute to the town...dining, shopping, tourist attraction fees....I don't think it's that different. Of course the large businesses hire more locals as staff, but then there's the STR needs like management, cleaning, handymen and all ....

So hmmmmm, I wonder if the 'perception' that STRs are small business is correct? They are by themselves, but if I walked into the next City Council meeting where I live and announced that 200 vacation rentals were packing up and leaving, would they be thrilled? They might gain some of these back as LTRs, but typical renters do not spend nearly as much as visitors...

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Jay Hinrichs#5 All Forums Contributor
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  • Lake Oswego OR Summerlin, NV
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Jay Hinrichs#5 All Forums Contributor
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Replied Nov 9 2021, 07:34
Originally posted by @Maurice D.:

ski resorts could build "dorms" for the kids operating the lifts..  high density.

 ya like lumber camps..  of days gone buy  either the employer pays a larger wage or provide housing ?

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Jay Hinrichs#5 All Forums Contributor
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Jay Hinrichs#5 All Forums Contributor
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Replied Nov 9 2021, 07:38
Originally posted by @Ryan Moyer:
Originally posted by @Josh C.:

I never understood this. Why in tourist areas do you restrict more people coming or larger groups? Not to mention personal property rights and free markets. But that’s another subject. Lol

 I live in a ski area so I kind of understand it.  Hate it but at least understand where they're coming from.

I don't think the issue is people coming in larger groups, the issue is housing for lower wage workers. These ski areas have insane property values (mine in Utah isn't as bad as those Colorado towns but same idea) so there's no way someone working for $7-15/hr at a ski resort or working restaurant wages or store clerk wages can afford to live there. In the past that meant they would just rent, but now every investor in the area isn't stupid enough to rent their properties as a LTR for $1500/mo when they could list it as an STR and make double/triple that even with a property manager. Originally people could just move a little further out of town but now even those areas are popular for STRs.

So there's nowhere for lifties and store clerks and restaurant staff to live so they go somewhere else. Then the restaurants and ski resorts and whatnot are understaffed and complain. Now the city is stuck choosing whether to side with the STR owners that they did fine without for the last 50 years or the ski resorts/restaurants/shops that actually bring all the tourists into town.

It's why I'll probably never own a ski property, even though I love to ski and could manage them much easier since they'd only be 30 minutes away instead of 2000 miles like the places I do own for STR. I'd rather just make my money somewhere more STR friendly and use those profits to pay for a sweet ski vacation.

I'm sure Colorado isn't very STR friendly in general like said but we have bans and regulations out the wazzoo in the ski areas here in Utah as well, and Utah is about as conservative as it gets. It's just a micro-economy that doesn't work in the current climate with STRs so lucrative.

 I just think back to my school days went to Colorado Mtn. Collage in Leadville.. and Leadville in the mid 70s was dead and dying the big mine had shut down.. but it became a affordable place to live for those working  Vail and Copper  I rented a OLD mining house for 125.00 a month for 3 of us.. but the gas heat was expensive ..  but now I bet even leadville is expensive. 

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Kim Tucker
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Kim Tucker
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Replied Nov 9 2021, 08:36

I am seeing this in EVERY vaction area as they need housing for the people that live there - Breckenridge, Frisco, Glenwood Springs - get on some of their local newspaper feeds and you will get articles all the time.

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Travis Kemper
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  • Glenwood Springs, CO
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Travis Kemper
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  • Glenwood Springs, CO
Replied Nov 9 2021, 08:58

@Ryan Moyer. For sure. The issue is that the teachers, restaurant, ski resort, etc can’t find anywhere to live. We have the same problems in glenwood springs.

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Jake Sklanka
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  • Breckenridge, CO
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Jake Sklanka
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Replied Nov 12 2021, 06:37

The rest of Summit County was waiting to see what Breck did with their cap on STR and are closely following suit for the most part. There have been some contracts falling out with buyers with cold feet or that realized they can't get a STR license, but it really is what's best for the town in the long run. The experience in these towns will suffer enormously if there is no one to wait tables, bump chairs at the resort, plow the roads or clean the rental rooms etc.

The Town of Breckenridge just bought a number of condos at around market value, put deed restrictions on them and listed them for $160-180k less than they paid to give a few more options to locals that work 30+ hours a week in the county. That's still $475k for a 2bed/2bath, pretty tough for someone living on $15-20/hr.

As @Candice De mentioned, the L2L incentives to Lease to Locals, up to $24k a year on top of normal rent (no cap that I've seen) to 'save ski season' caught my attention. I applied and they said they should have my application approved next week. Incentives rather than limiting property rights. I was absolutely one of the people that got STR licenses for my properties just in case I choose to go back to them in the future.

Both the ski area and town are projecting a huge winter of tourism. One property management group stated they have 50% more bookings than any other year in the past 10 years at the start of the season. Average daily rates are also heading up 20% from winter 2019-20. More tourists = more potential buyers. Prices may not increase as dramatically as they have the past decade, but the demand is strong and inventory is limited which I think will keep it moving along without a drop in values.

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Candice De
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Candice De
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Replied Nov 22 2021, 19:28

@Jake Sklanka the latest proposal from Summit County is actually pretty impressive from my opinion.  They are allowing "Resort Zones" to operate as is, but they are proposing different levels of licensure for "Neighborhood Zones."  They are tiered based on the type of ownership and the number of days you rent, but they are still allowing the owners in these zones to have rental options at reduced occupancy (still 2 per BR plus 2 instead of plus 4).  They are allowing existing licenses to grandfather in, potentially for 2 years.  I think this is a great approach that accommodates existing owners and gives more control to future demand.  Thoughts?

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Jake Sklanka
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Jake Sklanka
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Replied Nov 30 2021, 10:36

@Candice De Yes, I absolutely agree the tourism overlay plan is an improvement! 

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Teri Feeney Styers
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Teri Feeney Styers
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Replied Dec 1 2021, 11:08

In Fruita, Colorado they have created neighborhood zones and allow so many STRs in each zone. That keeps the various neighborhoods diverse. 

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James Carlson#1 Denver Real Estate Forum Contributor
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James Carlson#1 Denver Real Estate Forum Contributor
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Replied Dec 2 2021, 06:11
Originally posted by @Teri Feeney Styers:

In Fruita, Colorado they have created neighborhood zones and allow so many STRs in each zone. That keeps the various neighborhoods diverse. 

They have something similar in Wheat Ridge where they allow non- owner occupied STRs but have capped the number per council district. I was just talking to a city planner in Wheat Ridge and he said the city is happy with how it's gong. 

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Jamie Salyer
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Jamie Salyer
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Replied Dec 7 2021, 09:33

@Jake Sklanka Well said. I live in the Vail Valley and we too were watching closely to what happened in Breckenridge. Now, with a limited count of STR, those rents will likely increase when there is less to choose from. It seems like a great place to be in as a current owner with STR license.

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Jake Sklanka
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  • Breckenridge, CO
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Jake Sklanka
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Replied Dec 9 2021, 08:41

@Jamie Salyer What's happening in the Vail Valley and beyond? Can't say I've been following with everything going on here. 

The demand for rentals seems to be staying strong around here at the moment.

Last night, Aspen just put a moratorium on STR licenses, new construction permits AND additions to current properties. What an exciting time to watch all of this unfold! haha Interesting to see how things play out in all of the mountain communities!

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Bonnie Low
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Bonnie Low
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Replied Dec 10 2021, 07:24

@James Carlson I agree with you. Labeling towns and initiatives as "west coast liberal" is overly reductive thinking. It totally ignores the influence that massive resort labels have on the STR environment in a local town. The rise of Airb&b and VRBO have put significant pressure for tourist dollars on the resorts and they have the money and influence to fight it. They don't want anyone taking a slice of their pie. And those who have commented on the need for affordable housing are spot on, too. The people who work in the service industries in tourists towns also need somewhere to live and an affordable and reasonable commute even if they don't live in the town itself. The same people who whine about the "liberal policies" impacting the STR regulations are also whining about slow service at their favorite restaurants and wondering why "nobody wants to work anymore." Please. Let's bring balance back to the discussion. We need all those things: a space for resorts, a space for STRs, affordable space for workers and a living wage, and vibrant shops, restaurants and attractions.