The town of Vail looks at revising, tightening its rent-by-owner regulations | VailDaily.com

The town of Vail looks at revising, tightening its rent-by-owner regulations

Vail's current short-term rules require unit owners to buy a business license from the town and to pay sales and lodging taxes for every night a unit is rented. Those rules now are among the most lax of resort communities.

VAIL — It can be hard to be neighborly when your neighbors come and go. That's especially true when your neighbors are short-term lodging visitors.

Longtime resident Mike Reid owns a half-duplex in East Vail. The adjacent unit is used for short-term rentals and is rented through an internet-based rent-by-owner service. He said it's getting tougher all the time to be neighborly toward that ever-changing cast of characters.

"It's like living in an airport terminal," Reid said. "People are coming and going seven days a week."

Reid said it's time for Vail's town government to take a harder line on those rentals.

Current rules require unit owners to buy a business license from the town and to pay sales and lodging taxes for every night a unit is rented. Lodging tax is a very big deal in Vail, as it's the largest source of sales-tax collections.

In more than a year since the town's rules took effect, about 930 units are registered and paying taxes. But there are more than 2,300 units in town that could be rented out. That means a number of units aren't paying their way, although available figures don't include those who own multiple units.

Recommended Stories For You

In response to both potential revenue loss and complaints from neighbors, town officials are looking at revamping, and perhaps tightening, Vail's rules.

Those rules now are among the most lax of resort communities. The current rules were enacted in 2015, after a group of lodging managers asked the council for a tight set of regulations that would have included health and safety inspections, as well as quality inspections.

The council rejected that request in favor of a lighter regulatory touch.

Old issue, modern technology

Short-term rentals in town are about as old as the town itself. Reid said he understands that renting out bedrooms, condos and homes has long been part of Vail's lodging picture, but said it's time to pay more attention to the issue, especially since the advent of internet-based rent-by-owner services.

"People have a right to do what they want with their homes," Reid said. "That said, other people have rights, too."

The Vail Town Council hasn't chosen a course of action on the possible new regulations, but it has put a lot of time and effort into trying to learn what's going on with the still-burgeoning internet rental business.

The town earlier this year commissioned a study from DestiMetrics and RRC, a pair of Front Range-based research and consulting firms.

At a late-April presentation, Ralf Garrison, of DestiMetrics, estimated that his firm had put 5,000 man hours or more into studying the issue.

Part of that study includes a look at the way 10 other mountain resort communities regulate the rent-by-owner industry.

Most in that group look at online rental applications through the lens of current town zoning. Half require town permits. Vail does neither.

Dale Bugby owns Vail Resort Rentals, a property-management company. Bugby was on the council in 2015 and supported the lodging managers' request for tight regulations. He said he's glad to see renewed focus on putting more regulations on the industry.

"If I owned a duplex and there was a different car, with different luggage and passengers every week, I'd be rightfully annoyed," Bugby said.

Seeking 'balance'

Both Bugby and Reid said the town needs to find "balance" in its regulations between allowing short-term rentals and protecting the quality of life for full-time residents.

In Bugby's mind, the town needs to ensure it's monitoring rent-by-owner properties, from rentals to maintenance. To that end, Bugby believes regulations should perhaps include requiring a local contact for both maintenance and any problems that arise, although he doubts the town will take its regulations that far.

Bugby said some property owners may have misconceptions about the "easy money" from online rentals.

"I don't think (owners) understand how much time and effort goes into" keeping a unit ready for rent, he said.

An owner who lives in a unit and rents out a room or two probably understands the work required to keep a condo or duplex in top condition, Reid said. Others, who buy a unit then put it on a rental site, might not.

Reid said the town should also look into enacting different regulations for duplexes.

In an email, Vail sales tax administrator Johannah Richards wrote that it would be possible to enact regulations for duplexes, or require letters of approval from adjacent property owners, but added the town's staff would need to do more research regarding what other communities do.

Whatever regulations the town council enacts, Reid said he hopes to see more balance between renters and residents.

"I don't want (short term rentals) stopped, but we need to move with some caution, some vision," he said.

Allowed to grow unchecked, Reid said Vail's character could be forever changed.

"The town has a lot of work to do," he said.

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com or @scottnmiller.

By the numbers

• 1,725 — Hotel rooms in Vail.

• 2,352 — Short-term rental units in Vail.

• 930 — Units licensed through the town of Vail.

• $162 — Required fees for a business and sales tax license.

Sources: Town of Vail, DestiMetrics