Denver Needs Better Short-Term Rental Enforcement

7 Replies

@Ed E. - Thanks for sharing this! I hope the people cheating the system are not going to mess it up for those of us doing it legally. 

Thanks for this!  I got the post as well.  I go to most of the STRAC (Short Term Rental Advisory Committee) meetings and find this audit interesting (@James Carlson I think you will too!).  At the meetings Denver reports a >60% compliance rating, which is actually much higher than many other U.S. cities that have regulation for STRs.  Denver is also (or so they claim) the only city that offers a 100% online application process, further encouraging compliance.  Curious why the "auditor" found many deficiencies when yet the city council members, including members of the dept of excise & licensing, are very confident in their current procedures.  I'm a little concerned that this article will cause Denver residents to file more complaints and push back harder against STRs in the city, making a large issue out of nothing.  

I guess the big question is: are STRs really a problem in Denver? Are they changing the character of neighborhoods and creating a housing crisis? To date there have only been 10 "show-cause" hearings resulting in the revocation of an STR license due to neighbor complaints, noncompliance, etc, out of 3000+ listings. That's about 0.3% of total STR listings in Denver. Does Denver need to do a better job catching people "cheating the system" as @Craig Curelop said?  Probably.  But the fact of the matter is the majority of hosts are in compliance and creating millions of extra tax revenue for the city.  My 2 cents :) 

@Ed E. Thanks for sharing. 

First off, the obligatory disclaimer: I am not a lawyer, and this isn't legal advice. Whew! Got that out of the way.

My big thought after reading the report is that whether you're doing Airbnb in Denver within the law or if you're skirting the primary residence rule, this doesn't change much about how you can operate or the potential risks. Here's why I think that:

If you're doing things right, this audit won't affect you. The auditor is urging the city to require more documentation during the application period. This might be proof of insurance and proof of possession. (i.e., proof that you own the property or proof that, if you're a tenant, that your landlord has given you permission.) Notice that I didn't say "proof of primary residence." So if you're doing things right, then you'll be able to provide these docs should they ask.

If you're NOT doing things right. If you don't have a license, I can't help you. Just get a license and pay the STR lodger's tax. But I'm talking about people who are Airbnbing a Denver place that's not their primary residence. (Ex: Spouses who each have a "primary residence." Someone claiming a "primary residence" when you're really staying full-time elsewhere. Master leasing a property with landlord permission to Airbnb full-time even though you're never there. Etc.)

It noted that some people -- 20 noted in the report -- violated the primary residence rule by having the same license registered at two addresses (dumb!) But that's a problem easily circumvented by crafty people. 

In the end, for those of you violating Denver's primary residence rule for Airbnb -- I know you're out there! -- the biggest risk remains the same. It's NOT the city actively finding you. It's still all about neighbor complaints. Each of the 10 "show-cause" hearings that has stripped someone of their license due to a primary residence rule violation resulted because of a neighbor complaint. Keep your neighbors happy, you stay in business. 

And yes, as @Tyler Work said, it's kind of odd that they're even doing this audit as Denver's compliance rate is higher than most any other major city. The auditor seemed more keen on ensuring the city is keeping accurate data and requiring documentation. 

If I were @Craig Curelop , I wouldn't worry too much. (Also if I were Craig Curelop, I'd be rolling in the money! Have you seen what that guy is doing with Airbnb and house hacking in Denver?)

Thanks for sharing this. This Denver Post article: https://www.denverpost.com/2017/12/21/denver-short..., states that we have 70% compliance rate and are well above other cities (STRAC also echos this- pointing out that we do far better than other cities.)

Agree with @Tyler Work that the auditor seems to be addressing issues that other departments do not see as problematic. My other take away from this was that if anything needs to change, it may just be a further push in public education on how to be in compliance. 

At 70% though, I'd also want to know what an ideal/realistic compliance goal is? 

@James Carlson or @Tyler Work - Great responses per usual! 

Do you guys know of a good way to keep the neighbors happy? I've heard ideas like a dinner party when you first move in or sign the lease? Or maybe keep it to smaller places where the odds of anyone throwing a rager is less likely? 

@Craig Curelop I tell all of my clients to be as upfront as possible with their neighbors and tell them exactly what they are planning on doing ahead of time.  If your neighbors are highly opposed to Airbnb, they will likely complain no matter what you do, dinner party or not.   Even if you are in full compliance with the city's rules, this can still cause headache and friction with the people that live directly next to you.  

For some reason neighborhoods with a younger demographic seem to be more open to it, i.e. Cap Hill, Highlands, Five Points, etc whereas areas like Wash Park and Congress Park are more likely to be against the idea.  I think it has something to do with the crazy "millennials" who love their "apps"!   

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