According to county Planning Director Mike Rozycki, staff has received a number of calls recently from residents concerned that homeowners in the unincorporated areas of the county are offering homes for short-term rental, yet are not subject to paying a 2 percent lodging tax that homeowners offering short-term rentals within the town limits of Mountain Village and Telluride must pay.
The concern has led to a further discussion on the county’s policy and interpretation of the LUC was to whether or not short-term rentals in single-family homes are a specified use.
“Our response is that it has been staff policy and staff interpretation that short-term rentals of main residences or single-family residences or caretaker units is not allowed in any county zone districts,” Rozycki said.
The logic behind the county response is, according to a staff memo, that short-term rental of single-family dwelling units is akin to operating a hotel or bed-and-breakfast, as defined in the LUC, and is not listed or considered to be a use allowed by right in any of the county zone districts. The “obvious” gap in this logic, according to the memo, is that not all single-family dwellings that are can be rented on a short-term basis meet all of definitional components of what constitutes a hotel or a bed and breakfast in the LUC.
“The Land Use Code is silent on single-family dwellings, and doesn’t specify a time or term of renting,” Rozycki said. “At the staff level we looked at our policy and decided that it’s not clear enough to initiate enforcement actions. So we decided to go to the Board and explain the situation and see what they want to do.”
After a discussion at its March 7 meeting, the commissioners directed staff to begin drafting an amendment to the ordinance to clarify the language. As of Monday, Rozycki said staff was continuing to work on a proposal, but so far nothing has been drafted. Broadly speaking, Rozycki said an amendment could go in several directions. One, the amendment could add language clearly defining short-term rentals of single-family dwellings (30 days or less) as a prohibited use. Another option would be to clarify that short-term rental is an allowed use, but subject to sales and lodging taxes.
“As part of that, we have been doing some research with the Colorado Department of Revenue and it does appear that short-term rental of residences is subject to the collection of lodging tax, but we haven’t figured out the mechanism to do that yet,” Rozycki said. “We are still talking with the State. Staff hasn’t drafted anything yet, and we are doing more research.”
While no proposed amendments have yet been drafted yet for approval, concerns have been raised about whether prohibiting short-term rentals constitutes rent control, as it relates to the Colorado Supreme Court decision in Lot Thirty-Four Venture, L.L.C. v. Town of Telluride, also known as “The Telluride Case” of 2000. Some would argue that prohibiting short-term rentals is a form of rent control, while others would argue that prohibiting the use does not control the price of the rental, but rather defines short-term rental as an unallowed use.
Rozycki said whether or not “The Telluride Case” bears discussion regarding a possible amendment remains to be seen, and that it will most likely be discussed in a public hearing process.
If and when a proposed LUC amendment is drafted, it must go through a two-step approval process with public hearings at both the San Miguel Planning Commission level and the Board of County Commissioner level. While no public hearings have been scheduled, county Planning Director Mike Rozycki said the public approval process could begin in mid-June.
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