Short-term rentals hotly debated in Denver

Share

Highlights:

  • Short-term rentals area a hot topic in Denver.
  • INC is urging City Council to regulate short-term rentals.
  • Short-term rentals are homes rented for fewer than 30 days.

 

The fast-growing short-term rental phenomenon is heating up in Denver.

Denver should continue to enforce prohibiting short-term rentals in the city, at least until new regulations are put in place that would regulate them, according to umbrella group for more than 100 Registered Neighborhood Organizations in the city.

The Inter-Neighborhood Cooperation members recently passed a resolution that “strongly” urges the Denver City Council and the Mayor of Denver to enforce the provisions of the Denver Zoning Code prohibiting short-term rentals.

INC also called for a “variety of options for appropriate regulations” that would include taxation, licensing and limitations based on density and location.

Short-term rentals should not be allowed where they would have a “detrimental effect on the social and cultural fabric of Denver’s residential neighborhood,” INC members voted. Some 35 INC members approved the measure, while four abstained and four opposed it.

Short-term is defined as renting your home or apartment for less than 30 days.

Despite the ban in of short-term rentals in Denver, thousands of short-term rentals are advertised every day for Denver on national sites such as VRBO.com, HomeAway.com and Airbnb.com.

Some of opponents of regulating or enforcing laws prohibiting short-term rentals compare it to outlawing alcohol during Prohibition.

“Enforcing the current zoning laws will not eliminate illegal short-term rentals,” said Denver resident Kevin Dickson.

“It’s similar to the prohibition of alcohol,” said Dickson, who is an expert in green and sustainable construction.

Dickson has no short rental properties in Denver, but has rented properties on a short-term basis in Summit County for the past 30 years.

“When there is strong demand, supply will be created, legal or not,” Dickson said.

City Councilwoman Mary Beth Susman has been studying the issue since last July, when she formed the council’s Sharing Task Force to study short-term rental options.

She has met with INC and many other RNOs to seek feedback, concerns and viewpoints on the increasingly popular and heated short-term rental phenomenon.

She is familiar with the latest INC resolution.

“This is a little more moderated,” than an earlier position taken by INC, “as they also suggested we regulate it,” instead of continuing the ban, Susman said.

Despite strong emotions on all sides of the issue, short-term rentals have not generated a great deal of citizen complaints, she said.

The city currently only is investigating five complaints on short-term rentals in all of Denver, she said.

And while technically it is not allowed, it is growing in Denver and across the country, she said. It has been a common practice as a way of renting properties in the mountains for decades.

“Airbnb has 1,000 Denver properties listed,” Susman said.

In some cases, retirees and others are renting out rooms to supplement their incomes or help pay their mortgages, she said.

That not only can be good for the homeowners, but also can provide an affordable housing alternative in a market with record-high apartment rental rates, she said.

On the other hand, a company in Florida bought a building in Capitol Hill and is renting out all of the units on a short-term basis, which has upset neighbors, she said.

She said if the city regulates the practice, it probably would only allow owner-occupants to participate and would ban companies from buying up buildings and renting out all of the rooms as a business.

On March 10, at Susman’s request, the Denver Community Planning and Development department drew up a draft zoning approach for short-term rentals in residential zone districts.

“Any changes to existing regulations will seek to balance flexibility for homeowners, and the growing interest in the “sharing economy,” with concerns regarding potential impact on neighbor and the overall character of residential areas,” according to the draft zoning outline.

City Councilwoman Mary Beth Susman has been studying short-term rentals for closing in on a year.

City Councilwoman Mary Beth Susman has been studying short-term rentals for closing in on a year.

Amie Mayhew, president of the Colorado Hotel and Lodging Association, said short-term rentals need to be regulated, but the city shouldn’t go overboard.

“This is not something that should be left unchecked,” Mayhew said. “Well, technically, short-term rentals are illegal in Denver. But we do believe short-term rentals should be regulated.”

owever, charges must be reasonable, or no one will register, she said.

“In Portland and San Francisco, the regulations are so onerous that no one is signing up,” Mayhew said.

She said that short-term rentals do compete with hotel rooms, but only to a certain extent.

“In some ways, sure,” Mayhew said. “They are kind of a modern-day competition. On the other hand, we think hotel rooms offer values you won’t find renting a room or an apartment. Not many short-term rentals offer room service and valets, for example.”

Owners with short-term rental properties should pay a lodging tax to create a “level playing field,” she said.

Dickson, however, said there are no similarities between short-term rentals and hotel rooms.

The idea of short-term rentals paying a hotel tax is “ridiculous,” he said.

“There is no cross-competition here,” according to Dickson. “Airbnb is not stealing hotel guests, because these are not the same customers.”

However, he says he does sympathize with the owners and bed and breakfasts, who have invested lots of money in their properties and pays the lodging tax.

The B&B owners often can’t compete with the listings on the Airbnbs of this world, which often are less than $100 per night.

“It’s no tragedy if that business model dies because Airbnb rentals are cheaper,” Dickson said.

“In purely economic terms, the Airbnb rental is a better utilization of resources,” he said. He said bed and breakfasts, however, likely could survive because of the niche they serve between short-term rentals and hotel rooms.

Indeed, the city could consider giving a break to bed and breakfast establishments to let them better compete with both hotels and

“Council should provide relief to the minority of B&B operators before penalizing the majority of Airbnb hosts in the interest of ‘fairness,’” according to Dickson.

Dickson also doesn’t see the logic of drawing a line in the sand at 30 days.

“Today I can legally rent out a house that I own for 30 days or more. But it’s illegal for me to rent it for a 29 day period or less,” Dickson said.

“This makes no sense to me,” he continued.

“I just don’t see how that law guarantees happier neighbors or a better neighborhood.

“Council is proposing to allow short term rentals, but only if the premises is my primary residence. This also makes no sense to me. I’m quite sure that my renters can behave themselves without me around, because I checked them out before I allowed them to prepay for the house.”

Susman said other cities that have grappled with crafting regulations on short-term rentals have often spent a year or two trying to come up with a solution, often with limited success.

That might mean the City Council will not consider regulating short-term rentals until after the May 5 city election.

“But I will still be here,” Susman said. “I’m running unopposed.”

 

 

 

 

Share Button

John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

More Posts - Website

Thank you to our sponsor

Our sponsor has made it possible to bring you this real estate resource for free. Please drop them a note and say thank you, and keep them in mind for your real estate needs.

Copy Protected by Tech Tips's CopyProtect Wordpress Blogs.