Telluride Council to Consider Residential Rental Changes
by Watch Staff
Oct 21, 2010 | 1718 views | 8 8 comments | 12 12 recommendations | email to a friend | print
Critics Worry About Unintended Consequences

TELLURIDE – The Telluride Town Council will consider the first reading of an ordinance at its Tuesday, Oct. 26 meeting that, supporters believe, could provide economic benefit to the town and its homeowners, particularly those at risk of foreclosure, and critics view as tantamount to changing the town’s zoning regulations, which could negatively impact properties in both residential and accommodations districts.

The item, scheduled for 2 p.m., asks council to consider relaxing the current restrictions limiting short-term rentals in residential districts based upon recommendations developed by the town’s Planning and Zoning Commission with public input.

The measure evolved from an attempt by council to address and capture lodging and sales tax and business license revenues being lost by the town through the proliferation of rentals direct from homeowners to renters through websites designed to promote them.

Additionally, it is hoped that the measure will help to level the playing field for landlords and property managers who, in paying the required taxes and fees, are under-priced by those who do not.

“The cyber rentals, as I refer to them, that network of renting has caused a significant impact on the lodging landscape in general in the community,” said Telluride Tourism Board CEO Scott McQuade.

“What started several years ago as a couple hundred rentals is now over 400 rentals in the region,” he continued.

One change would end a current exemption allowing owners to forgo obtaining a business license for renting out a residential property for not more than 15 days a year to require business licenses for all short-term residential rentals.

“Anyone who rents has to pay,” said McQuade. “That does level the playing field between property-management companies and the private renter.”

Another change proposes to increase the current limitation on short-term rentals in residential districts from 30 days per year, over a maximum of three separate rentals, to 45 days per year with no limitation on the number of individual rentals.

Additionally, the ordinance proposes to redefine a long-term rental to include any rental of 30 days or longer from its current definition of a rental lasting six months or longer. Under the current code, rentals between 31 days and 6 months are not permitted.

If ultimately approved on second reading as proposed, the most extreme example of an allowable rental scenario in a residential district would include 45 separate one-day stays and as many as 10 30-day stays at a single property over the course of a 12-month period.

While the changes could provide some economic relief to homeowners in those districts who might be teetering on the edge of foreclosure (although potentially at the expense of owners in the accommodations districts also facing foreclosure) because they allow for such a high volume of rental turnover, they are viewed by some as effectively unenforceable by the town, which relies largely on neighbor complaints to discover violations.

“There’s no way anyone can track it,” said hotelier and former P&Z member Michael Zivian.

“It’s bad zoning.”

“To implement a code that is not enforceable undermines our zoning,” which was established because the community recognized it had distinct needs that needed to be met, agreed Carrie Koenig.

Koenig has a vested interest in the outcome of the discussion for two reasons: She rents out a condo she owns in an accommodations district and she lives in a long-term rental unit in a residential district that under the current short-term rental limitations her landlord has been content to make available for that purpose.

By opening the door to the possibility of making more money in the lucrative short-term market, Koenig worried that long-term housing opportunities for town residents may be lost.

“That’s the potential unintended effect of what they’re proposing,” she said.

“Why are we even considering turning our residential neighborhoods into a business district?” she asked.

“It’s in the best interest of the community to think this through in a long-term, holistic manner.”
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October 28, 2010
I dont know what happened at the meeting -but if they open the zoning up,I would hope that the "residences" that are used as hotels would have to pay the higher commercial tax rate-rather than the lower residential tax rate .
October 26, 2010
Dear Matt4-If you are really contributing that much to our tax base-for g#ds sake please get a job running one of our large hotels they need your expertise.

I would not tell on my neighbor-even tho I know they dont have a business license and do not pay lodging tax, and probably no income tax.There are five or six in the neighborhood. Who knows where they all are ?

I am not responsible for enforcement,I pay taxes to the town to make and enforce zoning codes . Residential neighborhoods dont have hotel capacity,problems such as,no parking,ancient plumbing ,transients in and out,noise problems,handicap access ,lighting,fire suppression,proper insurance,and many others are abated by zoning rules.

And now we are supposed to allow a bunch of banks to rent out foreclosed homes in our town like hotels ? Turn the whole town into a hotel parking lot ?

The least we could do is enforce the rules we already have and somehow invigorate the accommodations districts we already have.

I think you are the one to help the hotels as your success shows in tax contributions. Maybe the hotel tax should be lowered-I dont know if you are taxed at the same rate as a regular hotel-but your success rate shows there is a way to accommodate our visitors, and make a profit.
October 26, 2010
Hi Pretty (nice handle by the way), yes, of course, and I understand your frustration.

If you could be so kind, the way I see it, is that the fault is with your neighbors, the homeowners, who rent to nit-wits; yes, you are correct, teenagers will be a nuisuance, I never rent to them as they trash the place and bug the neighbors.

I realized you are frustrated, still, if the homeowners are responsible, you can talk to them and get them to be more selective as to who they rent to; sometimes this is possible, and sometimes not.

I collect, and pay about $35,000 a year in hotel tax, over ten years that is $350,000 the city gets, and if there were 100 people like me doing it, over 10 years that would be $35,000,0000 going into the city treasury. This will buy a lot of parking spaces, and police cars.

Thank you for your thoughts, still, if managed properly vacation rentals hugely increase the value of real estate in the neighborhood, and hugely prevent forclosures; it is going to get worse before it gets better and the value of your house will certainly go down.

Hopefully you can get your neighbors, the homeowners to be more selective as to who they rent to; talk to them, be a friend, let then know of your concerns. Good luck, and best wishes.
October 26, 2010
Changing policy to help foreclosures is irresponsible-people have to pay for their own actions. Turning our neighborhoods into hotels is not proper zoning. If Matt4 is/was paying lodging tax maybe the cash cow wouldn't look so fat.

Short termers ruin neighborhoods-I have had may problems with fake hotels in on our street.

One, no parking-they show up with 2 or 3 cars and store theirs in front of my house for a week-no parking for tax payers.

Two-car alarm goes off on car -the cops are called and say they wont do anything-three days later after listening to the alarm finally drain the battery-I get to help the visitor jump their car.

Three-the power goes out and visitors knock on the door for candles and flash lights.

Four-12 teenagers for Phish- police called twice by neighbors and the party raged on.

Five-Bluegrass all cars on our block ticketed and towed-except ours with parking pass.The visitors enjoyed the 150 plus towing charge.

Six-No dogs ? No problem-just lock em in the car for a week.Barking yelping and heat up to 200 degrees.The cops actually will respond -they broke into the car and took the dog away. they wont respond for a three day alarm-just tell them there is a baby or dog in the car.

Seven-Paint the house ? Not until the painters cover the visitors car in plastic -45-dollars of plastic and 50 dollars a half hour spent an extra 500 dollars covering cars because their owners were nowhere to be found. Neighbors can be contacted but who knows which house secret hotel visitors are staying in.

Eight-Our street is not a hotel parking lot-drunks getting in and out of cars at 2am.Late check ins chatting, loading, and unloading at all hours of the night.

Nine-Car left running with doors locked -we have a no idleing policy-but the cops said they cant do any thing.A car let running in front of our house for more than 24 hours-nothing done about it.

Ten-there are ten times ten reasons not to allow a hotel free for all.

As they say when- on vacation -Americans leave their brain at home.Visitors need to be corralled into hotel/commercial zones so the accommodations districts can serve the visitors. Expecting the residential tax payers to serve and accommodate the visitors is wrong.If you cant pay your mortgage dont expect me to service your property-Im already paying your taxes !

PS MAtt-Excusing peoples bad behavior because they are rich ? Come on!
October 24, 2010
Mr Don't Say..but Please Do Say..

cuz you are absolutely correct in your analysis.

Now how are we going to get people to come here ski on the hill? Raise prices? More hill? Or lower prices so that people can say, "honey, look I got a discount voucher from Ski God Dave Riley and we should take him up on it, check out his place" or "honey, Dave Riley all by himself opened up Delta Bowl, do we have enough left on the visa check card to ski the hill for the day or should we go to Alta and stay at the 6 for $50.night and $50 per day?-we can stay the week in Alta".

What would Sam Walton do? Add more and different brands of eggs in the egg aisle or lower the prices on the eggs he already represents?

Demand is elastic and inelastic demand can be affected by new pricing mechanisms. Look at every route Southwest the Southwest case, you have an entity exploiting a government grant (authorized flight route by the FAA) and a new entry, a price leader...

Demand made elastic by new thinking.

Ok, all this is moot, the purpose of opening Delta Bowl is to prep the area for sale...lets debate that idea I just heard at the Buck...

What is the name of that place in Idaho or Montana that just went under? It was a high end exclusive ski hill with gates on the community...

Just sayinn..
October 24, 2010
The economy has declined even though the ski area has improved because the community lived high on unsustainable real estate development and sales for the last decade instead of investing in tourism infrastructure. Now we don't have it. So we don't have tourists. So businesses can't thrive.
October 24, 2010
I one 6 vacation properties that I rent out by the night. The notion that short term rentals will destroy a neighborhood is ludicrous. Short term renters do not bring barking dogs, they do not spend much time in the unit. They do not trash the front lawn or blast the stereo speakers the way long term renters do. Also, if you get a bad short term renter, they are gone in a week or so, and life goes back to normal.

What makes neighborhoods unliveable is barking dogs and leaf blowers.

Short term rentals are very profitable and many who are on the verge of losing their property could successfully rent to the tourists, which, ulitmately increases property values and the tax base. Also, short term renters have to pay the hotel tax which is a windfall to the town.

Short term vacation renters are also, usually rich people who have good manners and can behave.

Residents worry about short term renters having loud parties; the opposite is true, they usually go to bed early so they can get up and go skiing, etc.

Also, long term renters trash the property; instead, short term renters show up with a few suitcases and not much more.

Do the math, if you own a home in T-ride, you could probably rent out your house for $400/night during the hieght of ski season, 60 days equals $24,000 in income.

The laws prohitibiting vacation rentals should be summarily removed from the zoning algorythm, asap. The economy is going to get worse before it gets better, eg. more forclosures and declining property values, declining neighborhoods; now is the time to make the change.
October 22, 2010
You have got to love the logic here...

The "Tourism Board" which on its face would seem to be charged with increasing net tourism here in Telluride is arguing for increasing the tax load on private rentals, ie increasing the cost to come to Telluride.

You would expect that the argument would be to lower taxes on the taxed units to compete in the free market - so Mr. Mom, Dad and 4 kids could actually afford to come to ski here versus the outstanding package deals avail in Utah and the front range..but because taxation and corporate welfare is a way of life in San Miguel county this guy is arguing to increase the tax load on the "cyber rentals".

Figure out how to lower prices, become more competitive in the free market, increase efficiencies, eliminate heinous tax scenarios and you will actually be working in the long term interest of the local economy.

Who dreams this stuff up?