Vail area lawmakers outline housing policy priorities in new legislative session

On Tuesday, Jan. 9, state Sen. Dylan Roberts and Rep. Meghan Lukens stopped by a Vail Local Housing Authority meeting to discuss what the 2024 legislative session might bring in terms of solutions to the housing crisis across Colorado.

The five-member volunteer board works collaboratively with town staff and the Vail Town Council to create affordable housing opportunities.

“Housing is our number one priority,” said Vail Town Manager Russ Forrest at Tuesday’s meeting.

Similarly, across Colorado, housing has risen in priority and will be one of many topics state lawmakers tackle as the 2024 session gets rolling.

“There is a level of alignment and collaboration in this valley, and in several other mountain communities that I represent and have gotten to know very well, around being proactive on affordable housing,” Roberts said. “The affordable housing crisis hit our mountain communities first many decades ago, but now it’s reaching a crisis level across the state. And so it’s been exciting to see the state step up as a partner to some of the efforts that you’re doing.”

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Short-term rental bill

Both Roberts and Lukens said the bill proposal they’ve been hearing the most about from constituents is one proposing increasing taxes on short-term rentals.

In December, the legislators attended a Q&A in Vail hosted by the Vail Valley Partnership on the bill. Around 100 Vail area general managers, property managers, and owners of short-term rental properties, realtors, and local government officials attended the session. Roberts, Lukens, and the attendees expressed opposition to the bill in its initial form.

Forrest said that the bill would “create a significant disincentive and have a pretty significant impact on our lodging availability and probably a pretty measurable impact in terms of lodging and sales tax” due to the town’s inventory and history with short-term rentals. One challenge Forrest noted is that different communities — and even different neighborhoods within communities — could call for different regulations.

“It’s difficult to craft a statewide solution that would deal with those sorts of nuances that (any of our ski towns) would have,” Forrest said.

“I think we’re now taking a look at the next evolution of our short-term rentals,” Forrest said. “And it’s really getting to, there’s probably neighborhoods where we’ve historically had rentals and we want to continue to have rentals, but there’s also neighborhoods that are predominantly residential, local in nature where we may have a different response and solution.”

Roberts and Lukens both said that the bill sponsors are working on “significant changes” to the proposal. Roberts said amendments being discussed would “significantly reduce the property tax classification from commercial, where it’s currently proposed, down to a short-term rental rate essentially, which would be just a few points higher than the residential assessment rate.”

Splitting up Senate Bill 213

Late in the 2023 legislative session, Gov. Jared Polis and Democratic state lawmakers introduced a sweeping 106-page land use bill. The bill was an attempt to address the state’s housing crisis but was met with strong opposition, particularly in mountain resort communities including Vail. This year, the bill is expected to be “sliced up.”

Roberts mentioned three specific slices of the bill he anticipates will be introduced as separate measures, starting with a “strategic growth bill,” which Roberts called the “least controversial” part of the 2023 legislation.

“This will help give local governments the financial tools and resources to do housing needs assessments in every jurisdiction in Colorado,” he said, later adding that the bill includes water-planning requirements.

The assessments would then be submitted to the state Department of Local Affairs, which will create a statewide housing needs assessment with strategic growth goals.

Roberts said that he felt regional planning has “been missing in the affordable housing conversation” and is “why this bill is a good idea.”

This type of assessment aligns directly with a new local effort in which Vail and Avon are working alongside Eagle County to study regional housing under an “Eagle River Housing Action Plan.” The project, which is expected to be complete by this fall, has received a grant from DOLA.

“We hope that final project could be a model for the state in terms of, how do we truly do regional housing planning,” Forrest said.

The second piece of last year’s land use bill is around accessory dwelling units or ADUs. Roberts told the housing authority that this bill would make having an ADU a right for every homeowner while still allowing local governments with ADU programs to keep those programs or create affordability requirements around the units.

Allowing local control over affordability requirements solves one of the concerns ski towns expressed over the 2023 land use bill. As originally written, the bill could have precluded municipalities from placing deed restrictions on units, which has become a critical component of housing strategy in Vail and other resort communities.

Roberts confirmed on Tuesday that as the bill is being packaged and proposed, there is nothing that would prevent deed restrictions.

“I fully agree and empathize with the concern that I’ve heard from Vail and Breckenridge and a lot of other ski towns that if you let everybody build an ADU, you’re just building more Airbnbs and you’re not doing anything to solve the crisis,” Roberts said.

Another part of 213 that Roberts acknowledged is likely to be introduced is a bill to incentivize density around transit, which he noted would likely have little impact in the valley and other mountain communities.

Other housing bills

Roberts mentioned a few other potential bills surrounding housing including ongoing discussions about property taxes.

“I think we need to talk about property taxes as a key measure in affordability, in cost of living if we want to expand homeownership opportunities. The rising value of homes is putting a strain on folks with property taxes,” Roberts said. “So while we did have a special session in November, provided some temporary relief for this current tax year, there’s hopefully going to be a long-term solution to property taxes passed by the legislature this year.”

A commission created by this special session is supposed to make a formal recommendation to the legislature in March, he added.

Additionally, Roberts’ first bill of the year, which he planned to unveil Wednesday, is one introducing a property tax rebate.

“This is a bill that will allow counties and municipalities to create property tax rebate programs in their jurisdictions where they can incentivize the types of needs that they want to incentivize,” he said.

“I think primarily how it would be used here in the mountains is incentivizing homeowners and landlords to rent to a long-term local tenant rather than doing a short-term rental. But it could also be created to help incentivize somebody to do the lease to a child care provider or to a behavioral health provider and try to create more opportunities for some of the big needs that we have.”

This, he added would allow communities to create incentives without having to find the capital themselves.

Additionally, Roberts said that the Colorado Association of Ski Towns is working on a bill that would enable cities and counties to “impose a real estate transfer fee on the sale of real estate if that funding is dedicated solely to the development of affordable housing,” Roberts said.

As Vail is one of 11 communities in Colorado that already has a real estate transfer tax in place it wouldn’t be able to impose another.

“Hypothetically, if Eagle County wanted to impose a real estate transfer fee it would not pile on top of what already exists here in Vail. It would only apply to the places in Eagle County that don’t have a RETT,” Roberts said. “This bill actually wouldn’t necessarily impact the town of Vail. But obviously, a rising tide lifts all boats, and so it would help your neighboring communities significantly.”