Avon considers its options for managing short-term rentals | VailDaily.com

Avon considers its options for managing short-term rentals

The town is following other mountain communities by attempting to manage short-term rentals as a way to address the housing crisis

Avon is considering revisiting its current Short-Term Rental Zoning Overlay District (as shown here from the April 12 meeting packet) as a way to better manage short-term rental properties in the town.
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Last week, the town of Avon started the process of addressing short-term rental properties in the town. During a work session at its regular Town Council meeting on Tuesday, April 12, council members discussed various options for better managing short-term rentals, which most council members are concerned are challenging long-term — and specifically, workforce housing.

“The policy issue I care more about — what most of us do, though maybe Lindsay (Hardy) has only articulated it — is that the inventory of long-term, for rent, workforce housing is falling into short-term rental and taking it away from the long-term workforce rental market,” said Council member Tamra Underwood.

Currently, in order for a short-term rental to be operated in the town, the property must first fall within its short-term rental overlay zone district, which was implemented in 2009 and most recently amended in 2017. Within that district, the town requires property owners short-term renting to acquire an annual business license that has a flat fee of $75.

While the town still needs to do more historic research on the issuance of these licenses, the number of licenses issued has certainly increased in recent years. In 2020, 50 new business licenses were issued specific to short-term rentals — an 18% increase.

In the meeting report, it was identified that the town of Avon has somewhere around 318 licenses. However, Town Manager Eric Heil was quick to identify that this number is likely not accurate. This is because there are a number of properties in town — for example, Falcon Point and Beaver Creek condos — that have one front desk business license that encompasses all the units in the building.

As presented at the April 12 Avon Town Council meeting, there are currently 318 short-term licenses. However, the actual number is likely higher due to nuances in the town’s licensing.
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Avon would not be the first mountain community in Colorado to implement changes to short-term rental licensing and regulation in an effort to address the housing crisis. With that, the town has some examples for how it can move forward.

Specifically, Aspen recently put a moratorium on short-term rentals; Breckenridge capped the number of licenses it would permit; Ouray also instituted a cap recently; and Glenwood Springs in 2019 capped its licenses based on a percentage of rooms available as well as established rules and restrictions based on geographic location.

From imposing a moratorium on rentals until the town figures out its path forward to restructuring its licensing and short-term rental overlay, council members discussed a number of possible options for regulation and management of these properties.

For Council member Lindsay Hardy — who started her comments by personally identifying with how the housing crisis has impacted her as the “only non-homeowner on this Town Council” — implementing a moratorium would allow for the council to get a handle on how to proceed without losing more long-term housing to short-term rentals.

“I worry about the future of this community if people are just extracting the wealth with these investment companies. And I think there can be a balance, but I think a moratorium needs to happen until we figure it out, until town of Avon can finish construction,” Hardy said, referring to a new employee housing project at Swift Gulch and other county employee housing initiatives. “I think a moratorium to stop any new short-term rentals is necessary so we can get a grip on what’s happening. Otherwise, again, we will only be a resort community.”

Town Attorney Karl Hanlon identified that implementing a moratorium was within the council’s purview and authority via an ordinance that would have to pass on first and second reading. However, he highlighted that this could have an unintended consequence, as it takes at least 30 days to implement an ordinance.

“Occasionally, a moratorium has the wrong effect,” Hanlon said. “Because you can’t snap your fingers and make it happen legislatively, you’re gonna have the potential of a lot of licenses coming in because they want to make sure they get their place in line, if you will. That’s just a policy risk.”

While Underwood was uncertain on the effectiveness of a moratorium, she agreed something needed to be in place “so we don’t lose those bedrooms over the next year while we try to whittle away at it, because we’re just not going to be able to figure it out very quickly.”

Several other council members spoke to the possibility that changing the fees and fee structure could help to dissuade individuals from having a short-term rental.

“I’m not sure about a moratorium, I have to think about that; I think that the better approach is to immediately start a registration program that raises the licensing fees and makes them very expensive when you get up into the equivalent of a tier 4, 5 water use,” said Mayor Sarah Smith Hymes, later adding that she felt “raising fees has an impact on whether or not people are going to short-term rent their property.”

This fee structure would, as tentatively discussed last Tuesday, have the smallest fees for owner (or renter)-occupied units that are renting out bedrooms, and would increase based potentially on ownership — be it a second home or a investor-owned property — or on square footage and/or number of beds.

Smith Hymes also expressed a desire to see more inspections of these units for more health and safety oversight.

Whatever the options and alternative creative solutions presented, council was in agreement that something needed to be done sooner rather than later.

“I think these are all great recommendations, but we gotta put one foot in front of the other, and this could take a year to figure it out — and in six months we’re going to have a potential new council and that might take another six months to decide one of these recommendations,” Hardy said. “I’d like to see something sooner than later to help our community out.”

Moving forward to next week’s Town Council meeting on Tuesday, April 26, Underwood requested that staff present two ordinances at the meeting. All council members in attendance supported this request with a round of head nods.

The first ordinance proposed would create a more nuanced and updated tiered overlay map for short-term rentals. As roughly outlined, the new map could take the current overlay zone district and break it into at least two tiers, one of which would only allow owner-occupied short-term rentals. This proposal also would grandfather in existing short-term rental licenses.

The second ordinance requested would address licensing, potentially including those front-desk properties where only one license is issued for multiple units. This ordinance may also present some options on different fee tiers and pricing options.

Details of these specific ordinances will be more specifically outlined and defined by the next Town Council meeting and will include various options for council to consider.

“I think we need a series of steps, I want to do something tonight, I am proposing this is the place we start,” Underwood said.

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