TELLURIDE – Rental restrictions in the town’s residential districts will get more clarity, but not the wholesale relaxation recommended by the Planning and Zoning Commission, following a meeting of the Telluride Town Council Tuesday.
During that meeting council considered, amended and ultimately passed in a 7-0 vote the first reading of an ordinance that departed significantly from recommendations provided to council by the lower board.
Supporters of the original P&Z recommendations said the relaxed regulations could provide economic benefit to the town and its homeowners, particularly those at risk of foreclosure, while critics viewed them as tantamount to rezoning the town, perhaps negatively impacting properties in both residential and accommodations districts.
“I was very pleased that we were able to get a resolution on this and move ahead,” said Mayor Stu Fraser.
“This clarifies a lot of the code language that was unclear, makes the playing field even, provides a reporting system, allows us to control [private rentals] better, and allows us to have a better monitoring policy and a better enforcement policy that will be in place,” he said.
The ordinance 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.
Council approved it on first reading with unusual swiftness in order to enable the new rules to apply to license renewals being sent out by the Town Clerk’s office next month, if they are approved on second reading in three weeks as expected.
The ordinance requires anyone who rents out a property in either a residential or accommodations district for any period of time to procure a town business license. Previously, owners who rented for less than 15 days per year were granted an exception.
“This would mean a business license from day one,” said Fraser.
Although the P&Z recommended loosening the existing short-term (between one and 29 days) rental restrictions from a maximum of 30 total days of over three separate rentals during a 12-month period to a maximum of 45 days over an unlimited number of rentals, council disagreed.
“I’m very uncomfortable with the fact that we’re allowing 45 days,” said Councilmember Thom Carnevale. “I think we should limit this to 30 days and three times a year as presently exists. We have a responsibility to people in the residential neighborhoods to protect what they thought was a guaranteed right when they purchased their properties.”
Ultimately, council decreased the allowable number of short-term rentals to a maximum of 29 days over a total of three separate occasions during a 12-month period.
The ordinance as approved by council also redefined a long-term rental from its previous description as six months or longer to anything over 30 days. Under the existing code, rentals between 31 days and 6 months are not permitted.
The change has the effect of bringing the town’s definition of a long-term rental in line with that used by the state for sales tax purposes. While short-term rentals are subject to state sales tax, long-term rentals are not.
Although the P&Z recommended an unlimited number of 30-day or longer rentals be allowed in residential districts, council capped it at a maximum of three separate rentals per 12-month period.
Under the P&Z recommendations the most extreme example of an allowable rental scenario in a residential district would have included 45 separate one-day stays and as many as ten 30-day stays at a single property over the course of a 12-month period, totaling 345 days per year through as many as 55 separate leases.
“It could go all year long with just enough time to clean up between rentals,” said Councilmember David Oyster. “I would find that highly objectionable in my residential neighborhood.”
As revised by council, residential properties may be rented out year round, but through a maximum of six separate leases, three short-term and three long-term. The additional restrictions are expected to impact residential neighborhoods less dramatically than would a constant stream of new visitors.
Critics viewed the P&Z version of the ordinance as essentially unenforceable. Municipal Prosecutor Lois Major saw the three short-term rental maximum as a better option.
“I think the three was really good for the short term,” she said. “Regardless of who’s enforcing this, if the number is unlimited it will never get enforced.”
In terms of enforceability, Major also said she liked the idea of owners being required to sign an affidavit attesting to their rental activities modeled on one in Breckenridge, and suggested by Fraser, that also made its way into the ordinance.
“It’s going to be attached to the business license and will state that a [rental] report has to be done on an annual basis, and it allows us to track what is actually occurring,” Fraser explained.
“It ends up leveling the playing field out,” he continued. “Those in accommodations districts are going to have to fill it out as well.”
A final provision of the new ordinance that was recommended by the P&Z and accepted by council requires that a local, on-call owner’s representative be identified to the town and accessible 24 hours a day, seven days a week for matters concerning short-term rentals. Additionally, owners or their agents must make short-term rental tenants aware of town ordinances concerning pets, trash, recycling, bears, noise, parking and other relevant laws.
“I was pleased with the public turnout and variety of viewpoints expressed,” said Carrie Koenig. Koenig rents out an accommodations-district condo she owns, lives in a long-term rental unit in a residential district, and offered council written and spoken comments outlining her concerns about the impacts of the original P&Z recommendations.
“It was a thorough and thoughtful conversation which repeatedly echoed the importance of implementing enforceable rules and upholding our zoning,” she said.