Avon council debates changes to short-term rental licenses | VailDaily.com

Avon council debates changes to short-term rental licenses

The town delayed the first reading of two short-term rental ordinances to give more time for public input, research

Avon continues conversations on how to better control, understand and manage short-term rentals in town.
Chris Dillmann/Vail Daily archive

For some months, the town of Avon has been mulling its options to address a rising number of short-term rentals in the town. At its Tuesday meeting, the Town Council took its first step in evaluating two potential new ordinances aimed at better controlling, understanding and managing short-term rentals in town.

As identified by members of council, the town’s priority in re-evaluating short-term rental procedures and regulations is to stop potential long-term rental properties from transitioning into short-term rentals — therefore, protecting vital and waning workforce housing inventory in the town.

Following the suit and example of many other mountain communities, Avon has discussed a number of different mechanisms for regulating the short-term rental properties.

The Town Council discussed just some of these mechanisms at its April 12 meeting, and after shooting down the idea of a moratorium, directed staff to create two ordinances. The first ordinance would address short-term rental licensing and management in the town, and the second would re-evaluate its current zoning overlay district for the rental properties. Both were presented at council’s April 26 meeting.

New licensing, management requirements

Currently, in order for a short-term rental to be operated in the town, property owners must only acquire an annual business license that has a flat fee of $75. The town, as of April 26, has issued 326 licenses; a number which has increased by over 50 in the last year.

However, there are a number of properties in the town — such as Beaver Creek West, The Ascent, the Riverfront Lodge and more — that are front-desk managed and are only required to have one business license per property. This means that a number of short-term rental units are not counted in the 326 licenses. According to the meeting packet and initial research, there are nine of these front-desk managed properties that have approximately 128 units for listed as short-term rentals.

However, the newly drafted ordinance proposes a new fee structure that will not only make it easier to track the number of short-term rental units, but will apply different fees based on the type and size of the unit.

Max Morgan, a planner for the town, said that with this, the goal is to “update our policy from a one-sized fits all short-term rental management strategy to one that’s really a little bit more nimble with respect to what type of variety we actually have in our short-term rentals.”

As proposed on Tuesday, a short-term rental license fee would be paid in lieu of the business license fee, with the new fee structure as follows:

  • $500 for a front desk property, with an additional $25 per bedroom
  • $500 for a resident-occupied short-term rental
  • $750 for a studio/one-bedroom rental
  • $1,000 for a two bedroom rental
  • $1,250 for a three bedroom rental
  • $1,500 for a four-bedroom (or larger) rental

These fees are significantly higher than the existing flat fee for the licenses, which staff reported would help pay for additional staffing that would be needed to administrate and manage the new structure. It was proposed on Tuesday that 35% of revenue generated from the fees would go to administration and the remainder to the community housing fund. This fee structure is not set in stone as staff intends to continue evaluating the numbers.

Jeff O’Brien, an Eagle resident and director of operations for East West Hospitality in Avon, spoke at Tuesday’s meeting to the proposed fees. In his role at East West, O’Brien manages a number of properties in Avon including The Seasons at Avon, The Ascent, Riverfront Townhomes and Lodge and more. While O’Brien said that it was “completely fair” to have individual business licenses for the front-desk properties, he questioned the fee structure as proposed.

“The fee structure is prohibitive, it’s quite high. But again, to Eric (Heil)’s point, if you gotta hire folks to oversee the process, then you gotta charge appropriately to pay for it,” O’Brien said. “But I can tell you, that as it is now, it feels prohibitive.”

Part of the reason additional administration and management would be required by the town is that the ordinance also contemplates adding a number of required management practices for short-term rentals. This includes things like requiring a minimum number of parking spots, a 24-hour management contact, smoke alarms and more. A complete list of these practices has yet to be determined.

The goal of these, Morgan said, is “to make our short-term rental experience a really positive one, a really safe one for visitors.”

In requiring these management practices, the town would also have to implement some type of oversight. The proposal currently considers an affidavit and complaint-based approach. This would require owners sign an affidavit ensuring they’re following the required practices, with failure to meet the requirements being overseen by complaints filed by visitors with the town.

There was some debate on Tuesday as to whether this was the best approach for the town, and staff is expected to come back to address council with a more in-depth evaluation of what’s being proposed.

New overlay district

Avon is considering making changes to its Short-Term Rental Zoning Overlay District with a new Resident-Occupied zone, as presented in the April 26 Avon Town Council Packet.
Courtesy Photo

The second ordinance presented addressed the town’s current short-term rental overlay zone district, which was implemented in 2009 and most recently amended in 2017.

The ordinance presented Tuesday contemplates creating a more layered approach to the current overlay districts by adding a new resident occupied short-term rental overlay district.

As proposed, properties falling within the new overlay district — currently proposed based on proximity to Avon Elementary Schools — would be allowed to continue short-term rentals if:

  • They had an existing short-term rental license,
  • The property has a primary resident renting a portion of the property for short-term use, or
  • The owner or renter utilizes the unit for at least eight months out of the year as primary residence.

This new zone, as presented by Senior Planner Jena Skinner, is contemplated as the properties in this area were “identified as being more suitable for long-term, full-time housing” and have seen a “disproportional increase in short-term rental licenses that outpaces other areas in the short-term rental overlay

Overall, council members expressed a desire for more work on this map. Issues were expressed with the zoning being based on proximity to the school, with the eight-month threshold and with the amount of data provided. Council members also wanted further public input from property owners that would be impacted by any zoning changes.

Next steps

While the Town Council was presented with two drafted ordinances on Tuesday, staff requested more time to answer council questions, solicit community feedback and further refine the ordinances.

“As staff, we don’t think there’s a benefit to rushing. We think we want to get the ideas out, there’s a lot of proverbial devil in the details and we do want a lot of input from our short-term rental community on the licensing as well as those minimum manager requirements,” said Town Manager Eric Heil. “There’s a lot of internal discussion we have to have with staff…”

Some of the direction given by council to staff was to:

  • Determine the number of long-term rental properties that have transitioned to short-term rentals, including evaluating this property by property;
  • Determine how town staff would administrate new management policies;
  • Determine how town staff would define and enforce whether units were owner-occupied or not;
  • Further research and evaluate the dollar amounts in the new license fee structure;
  • Further define resident occupied short-term rental and determine whether licenses can be held by property owners, renters or both; and
  • Determine how and when new fee structures, overlay changes would be rolled out.

Council also identified a few other potential mechanisms — outside of licensing and the overlay district — to address the issue at hand. Council member RJ Andrade suggested somehow capping licenses, something that Glenwood Springs has had in place since 2019.

“I’m against the resident-occupied short-term zone in general. I’d rather see a certain number of licenses for each. I don’t think singling out one neighborhood is really fair to those homeowners,” Andrade said. “I think if you had a capped number of short-term rental licenses and a percentage of them are resident-occupied short-term licenses — and that’s all you have available — would be a more equitable concept.”

Council member Chico Thuon suggested possibly creating monetary incentives for property owners to convert short-term rentals into long-term ones — something that Summit County is currently trialing.

While these new ideas were welcomed in the work session, both were met with trepidation and curiosity by various council members and staff. However, as the town continues to evaluate its options, these could be further contemplated as well.

Both ordinances on the table are expected to come back in front of council at its May 24 meeting. Prior to the meeting, town staff will seek to answer these questions as well as seek and encourage public input from the town’s short-term rental license holders and property owners.

Support Local Journalism