City expects ‘influx’ of interest in STR permits when moratorium ends

Aspen City Council took a major step Tuesday toward regulating vacation rental properties and reining in an industry they say has exacerbated the housing crisis.

As the city’s moratorium on new short-term rental permits nears its September 30 expiration date, another date looms: October 1. That’s when the city will start accepting applications for new short-term rental permits, but under a restructured system of guidelines and rules that council approved during the moratorium period. .

It’s also “when we expect an influx of new applicants” seeking STR permits due to pent-up demand since the moratorium took effect, said Haley Hart, the city’s long-term planner.

The guidelines are based on a city ​​council ordinance passed in June, splitting STR permits into three types and creating more rules to better regulate the industry.

The details of these new rules, regulations and eligibility requirements are clearly set out in the “Short Term Rental Program Guidelines”, that the four members of the municipal council unanimously approved by a resolution. Councilor Ward Hauenstein was not present.

“It was as close to making sausages as you can get,” Councilor Skippy Mesirow said. “It was big, it was complicated, and it took a lot of compromise and hard work, and I think we came up with something really great.”

The moratorium survived a lawsuit claiming there was no urgency to justify the ban which took effect immediately when the council passed it on December 8, an example of how the issue has split the community into different opinion camps on STRs.

STRs, which are rented within 30 days, are an affordable option for Aspen lodges and hotels that cconstant average of the highest room rates in the statistice, industry advocates have argued. They have also been a reliable source of additional income for residents who also live in the accommodations they rent.

One statistic, however, caught Mayor Torre’s attention during the Department of Community Development’s presentation of the new guidelines. As of Dec. 8, when the moratorium went into effect, the 1,319 existing STR permits represented 18% of all residential units in the city, according to Community Development. Adjusting that number to reflect only open-market residences would be about 28%, said Hart and Community Development Director Phillip Supino.

The mayor noted the “large percentage of our available residential accommodations which are unavailable to local residents if uninhabited and are primarily used for short-term rentals”.

The impact of STRs on housing availability has not been the only issue driving the council’s mission to regulate the industry more heavily. Aspen officials also said STRs impact the character of residential neighborhoods, disproportionately use city services and pay the lower residential property tax rate while traditional lodges pay the higher commercial rate. .

Existing STR license holders who were in effect before December 8 have been bound by the new rules since they came into effect in June. They will be able to renew their permits in November and December, Hart said.

STR permits are now offered in three categories and are described by the new city guidelines as follows:

• Owner-occupied short-term rental license — “The STR Owner-Occupied Permit (STR-OO) is only available to City of Aspen residents who are homeowners and can prove that the property is their primary residence. STR-OO permits are issued to full-time residents of Aspen and are limited to 120 rental nights per calendar year from the date the permit is issued. If an applicant wishes to put their property on short term for more than 120 nights per year, they can apply for an STR-C permit.

Classic short-term rental license — “The STR Classic (STR-C) permit can be issued to any natural person who owns a residence in the city of Aspen. Unlike the STR-OO permit, STR-C permits are available for non-owner occupied residential properties in the City of Aspen, and proof of primary residence is not required. STR-C permits are also available for owner-occupied residences where the holder wishes to rent the property short-term for more than 120 nights per year.

• Short-term accommodation-exempt rental permit — “The STR Exempt Lodging Permit (STR-LE) is available only to Lodging and Condo-Hotel properties that meet the definition of Lodge or Condo-Hotel by (city ​​code), Use categories. Some features of lodges and condo hotels include, but are not limited to, shared reservation and cleaning services, combined utilities, and on-site, in-person management and reception services during regular business hours. desk. Properties eligible for STR-LE permits must be marketed under a unified brand and marketing model where individual ownership of units is secondary to the central brand of ownership. There is no limit to the number of rental nights permitted under the STR-LE license. “

The council’s first action on STRs came in October 2020 when it passed legislation requiring landlords who rent their homes short-term to have a business license and STR permit filed with the city. Business licenses require property owners to pay the city’s 2% lodging and 2.4% sales tax. Rental permits are acquired after landlords acknowledge they understand city laws relating to noise, nuisance, and wildlife, for example, as well as their own HOA rules as they relate to tenants.

Another tax could be imposed on DOS.

Aspen voters will have their say in the November election on the creation of an STR tax. The proposed excise tax would come in two versions – a 5% tax on overnight stays in owner-occupied units and lodges and condo-hotels, and a 10% tax on properties that are not residences principal for the owners or which are intended for second-hand investments. purposes.

Revenue from the STR tax, if approved, would go towards the city’s affordable housing efforts and the remaining funds would be used for environmental initiatives and infrastructure maintenance and repair.

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