HomeMy WebLinkAbout2.0 MEMO - Short Term Rentals - ApplicationMEMO
TO: Board of County Commissioners
FROM: David Pesnichak, Senior Planner
DATE: September 10, 2015
RE: Short -Term Rental of Residential Dwelling Units
BACKGROUND
Over the past several years, short-term rentals (aka vacation rentals) of residential housing units have
become widely popular. With the advent of the "sharing economy", websites such as VRBO, FlipKey, Home
Away, Craigslist and airbnb have expanded the choice of nightly accommodations available to visitors
through the nightly rental of otherwise single-family or multi -family long-term dwelling units. While the
nightly rental of residential properties has been occurring for years, it has been primarily limited to highly
visible tourist destinations and the units have been managed by local companies. The sharing economy
has democratized this market and has allowed property owners in less tourist oriented locations and with
less resources available to pay a management company to rent their otherwise typically unused properties
to visitors on a nightly basis. Such democratization and a "sharing" of resources possess new challenges
from a governmental and community perspective, however.
The Garfield County Land Use and Development Code (LUDC) currently does not contemplate the use of
short-term rentals. The closest use that is identified in the LUDC is a Lodging Facility. A Lodging Facility is
defined as follows:
An accommodation for a temporary stay that includes, but is not limited to, a resort lodge,
guest ranch, overnight shelter, motel, hotel, boarding house, and bed and breakfast
establishment. Lodging Facilities exclude seasonal or Temporary Employee Housing on
premises; contracted employee housing off premises; seasonal rental of homes; and lock-
outs, or portions of homes, consisting of 2 or fewer independent lodging units whether
managed by a lodging management agency or not.
The second sentence of the definition identifies uses that are excluded, which consists of "lock -outs, or
portions of homes, consisting of 2 or fewer independent lodging units whether managed by a lodging
management agency or not." This type of use, which would include a "short-term rental" of a residential
property, is neither further defined nor an allowed use within the Code. In addition, this use is not
specifically allowed within Section 3-403, Use Table. Division 4 of the LUDC states that "Development or
use of a property for any other use not specifically allowed in the use table and approved under the
appropriate process is prohibited." As a result, short-term rentals of residential properties is currently a
prohibited use within unincorporated Garfield County.
In 2011, the National Association of Realtors (NAR) commissioned a White Paper on "Short -Term Housing
Restrictions". The definition of a Short -Term Rental within this paper is excerpted below. It is worth noting
that while some websites facilitate the rental of individual rooms or even beds within residential units,
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which also occurs throughout the County, this Memo and below definition addresses only the rental of an
entire residential dwelling unit.
The term "short-term rental housing" typically means a dwelling unit that is rented for a
period of less than thirty consecutive days. In general, short term rental housing differs
from bed & breakfasts, hotels, motels, and other "lodging" uses by providing complete,
independent living facilities for one or more persons, including permanent provisions for
living, sleeping, eating, cooking and sanitation. Although bed & breakfasts often are
similar in appearance and location to many short-term rentals, they are distinguishable
by the presence of the owner/operator onsite. Boarding houses differ from short-term
rentals by having multiple rooms or units for rent and common kitchen and dining facilities
that are shared by the occupants. Boarding houses also tend to be less transient than
short-term rentals. Similarly, hotels and motels are distinguishable from short-term
rentals by having separate entrances and an on-site management office. In some
communities, short-term rental housing may be referred to as vacation rentals, transient
rentals, or resort dwelling units.
Although the exact number of residential units available for rent within unincorporated Garfield County
is difficult to specifically identify, a search of just the above noted websites indicates that the number of
units available for rent at some point during a given year number over one -hundred (100). The geographic
distribution of these units is heavily weighted to the east end of the County with many inside the City of
Glenwood Springs and the Town of Carbondale as well as throughout the unincorporated area. The
number of units listed for rent west of New Castle drops significantly to near zero around Parachute and
Battlement Mesa.
While some of the impacts from short-term rentals are easy to understand, the NAR commissioned White
Paper outlines some of the general impacts and ways in which communities across the country have tried
to deal with these impacts. According to the Paper, there are five major impact areas jurisdictions attempt
to address through regulation, as outlined below.
- Protection of Neighborhood Environment - noise, late night parties, trespassing, increased traffic,
and visitors generally not being neighborly.
- Protection of Physical Characteristics— absentee property owners can be less attentive to routine
maintenance such as painting, lawn maintenance, tree and shrub punning and trash removal.
- Revenue — if the property owner does not obtain a State sales tax license, this can mean lost
revenue for the County.
- Fairer Competition with Licensed Lodging — it has been argued that a lack of regulation for short-
term rentals results in unfair competition for hotels, motels and bed and breakfasts that must pay
higher taxes and abide by more stringent site development and building codes.
Protection of Renter Safety — while commercial establishments must be constructed to comply
with the building code regulations for a hotel, residential units for rent are unlikely to have been
built to such standards. As a result, health and safety concerns may be present in residential units
which are rented like a commercial establishment.
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Staff has reviewed the land use codes and zoning ordinances of 26 jurisdictions throughout Colorado
including all 6 municipalities within the County. A detailed summary of these findings is attached. Of the
municipalities in Garfield County, only Glenwood Springs and New Castle address short term rentals while
the use is generally undefined in Carbondale, Silt, Rifle and Parachute.
The range of regulatory permissiveness among the jurisdictions surveyed generally corresponded with the
major types of short-term rental restrictions outlined within the NAR White Paper. According to the Paper,
there are four main types of restrictions, as outlined below.
- Prohibition—of the 26 jurisdictions reviewed by Staff, only one, the City of Boulder, has an outright
prohibition on short-term rentals. And even in this case, the prohibition is only until the issue of
taxation of the units can be brought to the voters. Although an example may exist, Staff found no
cases in Colorado where a prohibition on short-term housing exists for any of the impacts outlined
previously.
Geographically -Based Restrictions — geographically -based restrictions were common among the
jurisdictions reviewed by Staff. The vast majority of these restrictions only allowed short-term
rentals in specific zone districts. The City of Glenwood Springs utilizes this form of restriction.
Other examples include the use of an overlay zone in the Town of Avon and the use of a minimum
lot size of one acre in Jefferson County. As a variation on geographically based restrictions,
Boulder County employs a tiered review system based on lot size and the number of nights per
year the unit is rented.
Quantitative and Operational Restrictions — While quantitative limits were only found in the City
of Durango, where short-term rentals are limited to one per street segment and a maximum
number within certain zone districts, operational limits were the most common form of
restriction. The NAR White Paper identifies 8 general areas of operational restriction found
nationwide, 7 of the 8 were found among the Colorado jurisdictions that were reviewed. The
observed operational restrictions are outlined below.
o Maximum Occupancy Limits — occupancy limits were found in 6 of the 26 surveyed
jurisdictions. These restrictions range from a simple numerical limit, such as Estes Park
which limits occupancy to 8, to relying on the limits imposed by the building code, which
is utilized by the City of Glenwood Springs. Other examples are San Miguel County which
limits to 2 people per bedroom unless a greater occupancy is permitted by the Onsite
Wastewater Treatment System (OWTS) or Boulder County which imposes a limit of 2
people per bedroom with a maximum of 8, unless approved by the director.
o Rental Period Restrictions — rental period restrictions was not a common operational
restriction. The Town of Telluride has the most notable rental period restrictions of the
surveyed jurisdictions. The Town allows short-term rentals as a use -by -right in residential
zone districts as long as the unit is rented no more than three times for a maximum of 30
days per year.
o Parking Requirements — parking requirements were found in 8 of the 26 surveyed
jurisdictions. The type of parking restrictions ranged from the location where tenants may
park, such as the City of Glenwood Springs which prohibits parking on grass or sidewalks,
3
to a minimum number of parking spaces required. In the case of Estes Park, a restriction
is employed that limits the number of cars that can be parked at a short-term rental unit
to three and prohibits on -street parking.
o Noise Level Limits—the most common method for jurisdictions to apply noise restrictions
is to require the short-term rental units to abide by all State and local noise statutes and
ordinances. The Town of Basalt has the most nuanced regulations prohibiting all amplified
music or other outdoor devices after 10 PM. Other jurisdictions that have specific
language related to noise are Colorado Springs, Grand County, the Town of Telluride and
Lake County.
o Required Posting — required posting was found in 5 of the 26 surveyed jurisdictions. While
these postings are to be located within the residence to provide the visitor with
information about the local laws and regulations, occupancy limits, trash collection,
parking, etc., the City of Aspen also recommends an outdoor posting of the property
which provides contact information for the local manager of the property.
o Mandatory Designated Representative —the requirement for a designated representative
located within the local area and available 24 -hours per day is common among the
surveyed jurisdictions, including the City of Glenwood Springs.
o Trash and Recycling FacilityStorage —trash and recycling storage can be an issue for short-
term rental units. This is because the timeframe for guests at the unit may not correspond
with trash and recycling pick up days. As a result, trash and recycling can end up being
stored outdoors for several days before it is picked up. In response, the Town of Ridgway,
Town of Telluride, Lake County, and San Miguel County all require that garbage be stored
in bear proof containers or a bear proof structure.
- Registration/Licensing Requirements — the primary theme among the regulations reviewed by
Staff is the requirement for short-term rentals to obtain local and State sales tax licenses. For
towns such as New Castle, Avon and Vail where no land use or zoning permits are issued for short-
term rentals, the only requirement is that a sales -tax license be obtained with the State and town.
Counties tended to be less concerned with sales tax collection than municipalities, which often
have local lodging taxes. Boulder County, for instance, has one of the most extensive and nuanced
land use review processes yet does not mention the collection of sales tax. Meanwhile, the City
of Boulder has determined short-term rentals to be illegal until the issue a taxation can go on the
ballot for popular vote.
Beyond the application of the LUDC to short-term rentals, the building code possess an additional
regulatory challenge. While the building code can adapt to short term rentals, certain items need to be
addressed with each of the short term rental units. Specifically, the occupancy rate should not exceed the
capacity rating for the unit as defined by the International Building Code (IBC) or the capacity of Onsite
Wastewater Treatment System (OWTS). In addition, smoke and Carbon Monoxide detectors need to be
in place and operational and emergency egress doors, windows, stairs and routes need to meet the IBC
requirements. Many communities have dealt with these issues by requiring posting of the occupancy
limit, providing a checklist of the items that need to be maintained in the home (e.g. alarms), and some
go as far as requiring an inspection of the home to ensure these building code issues are addressed.
4
Code enforcement related to these units are also a challenge due to variable use by different people over
time. In addition, the units can be very quickly made available for rent or removed from the marketplace.
Historically, the County has only pursued code enforcement in regard to these units if there is a complaint
filed. For example, Staff has over the past two years received complaints and issued Notices of Violation
(NOV) for four short term rentals of which one was located in Cheyln Acres and three where located in Elk
Springs; a subdivision that prohibits short-term rentals in the covenants. Even as the popularity of these
rental units have increased over the past 15 years, very few complaints have been filed with the County.
REQUESTED DIRECTION TO STAFF
Short-term rentals have existed for some time (15+ years) within Garfield County with few complaints
received over this timeframe relative to the number of units available. However, as noted previously, since
short-term rentals are not identified within the Land Use and Development Code and specifically Table 3-
403, Use Table, the use of residential structures for nightly rentals is currently not a legal or allowed use
throughout unincorporated Garfield County.
With the proliferation of short-term rental units, Staff would recommend clarifying the Code to clearly
identify whether these units should remain prohibited, be considered By -Right, or otherwise require
special review. Further, if special review is deemed necessary, the code amendments should identify the
level of review, review standards, and whether there is any procedural variation between zone districts.
Generally, Staff sees a few options for clarifying short-term rentals within the Code, which could include
the following:
Prohibiting short-term rentals
- Allowing short-term rentals as a By -Right use without Standards
- Allowing short-term rentals as a By -Right use with Standards (structured similarly to Home
Occupation/Business but with standards specific to short-term rentals)
- Requiring a Land Use Change Permit for short-term rentals with an Administrative Review
Should the Board wish to pursue clarifying and legitimizing short-term rentals in the County, Staff would
like direction in regard to initiating a land use and development code text amendment and any standards
that should be contained therein.
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