Vacation Rental Policy Considerations Richard Cimino Commissioner, Grand County, District 1

Definitions Short Term rentals VS Vacation Rentals (VR Best, except w/Gallagher) Time: 30 days or less, 45, 60, 90? Minimum stay requirements (might reduce competition with hotel, but not really, cleaning fee and other per visit fees already reduce competion with hotel Owner occupied vs absentee owner Local POC requirement? Time to respond? Fine Structure?

Assumptions: VR Problems Municipality allows a person to operate a STR business in a residentially zoned neighborhood Citizens of municipality have to deal with a business operation near their home (traffic, parking, noise, garbage, sewer and water, bandwidth reduction, giving directions to new weekly tenants, etc.) Governments have to patrol and respond to business issues (violations of parking, garbage, noise, sewer, water, increased wear and tear on roads and infrastructure, EMS, Fire, etc.) Economic conditions of entire communities are skewed Regular Hotels faced increased competition Tourism Board (TB) provides marketing services that benefit STR business owners even though the STR business owners are not contributing to the TB Supply of Long Term Rentals is greatly reduced Quantity of workers is greatly increased (STR occupants increase Tourism businesses)

Assumptions: VR Benefits Increases the number of tourists (extremely large numbers, great econ benefit) Vacation Rental Allowed = increased real estate values Allows our citizens to make extra money and attain housing Example 1: Homeowners struggle to make ends meet in high cost County, if they STR some of their beds, they can afford to stay rather than leave Example 2: Homeowners who take vacations could make money from their empty house and bring in more tourists while they are away Example 3: The tourism industry worker that can only afford to buy housing 1 hour away from work could buy housing closer to work if they STR beds (Long term rent is also an option) Potential area for beneficial government loan assistance – must be careful Hotels can’t meet the need (STRs in tourism peaks, STRs not used in swing seasons) Any new or revised STR Policy should not negatively impact these positives aspects of the STR Market to a large degree

What About taxes? Vacation rentals are taxed at residential tax rate This is well defended, Colorado supreme court case, maybe 2 Hotels and Bread and breakfasts are taxed at commercial rates Is use most important, or is original intent most important? Original use vs original construction?? Interim committee on Gallagher solutions is very interested in possibly reclassifying Vacation rentals as commercial, as well as second homes with a unique new category, maybe 21%

To Fee or Not to fee? Maybe Zero Fee, Zero permit requirements, Wild West! Are sales taxes and lodging taxes being collected? Maybe flat fee? $20, $150, $600, other amounts seen Maybe variable fee? Pillow count (based on listed occupancy) Maybe Both? For example, $300 flat fee, $100 per occupant fee, annual Maybe $300 is only in first year Should the fees go towards a specific purpose? Affordable housing Law enforcement Ems

Operations/complaints Local Poc, time requirement to respond, 1 hour, 3 hours? Upload photos/videos (actually protects STR operators) Permit on a calendar year vs 365 day term? To fine or not to fine? How much? Per day/Week/Month

Policy based on Geography Limited STr PER CITY BLOCK? Zones with no STR Help HOA decide/enforce Unincorporated County territory vs only in towns? Limits based on zoning classification (forestry and open, residential, commercial, etc)

Policy based on time Limit # days per year house can be rented Require min amount of days for stay Serious vacation communities: weekly rentals only, Saturday switch out, no joke

Unions? Should Vacation rental industry self organize? Could help with resident vs STR company fighting Should help local government put in place rules that are good, smart, not knee jerk reaction to multitude of residents who are opposed Would help complexes increase allowed STR spaces

Interim committee to fix gallagher Ain’t gonna happen, requires constitutional change Make STR commercial?? Legislative fix, don’t have to go to the voter Problem: initial esitmates will be based on “best case” of 100% of unoccupied housing units are operating as STRs. This assumption is probably over 90 in error!!