Vail late to regulate Internet rentals
By the number
85 percent: Towns and counties that have some regulation of “rent by owner” units.
69 percent: Number of governments that pursue delinquent sales and lodging taxes.
54 percent: Monitor activity via Internet searches.
38 percent: Have shut down rent by owner operations for non-payment and other violations.
Source: A Destimetrics survey of 13 resort areas.
VAIL — It’s never been easier to offer, or rent, a home to someone on vacation. But people who use rent-by-owner websites aren’t exempt from town taxes.
It looks as if town of Vail officials will soon discuss possible regulations for those who use the Internet to rent their units to vacation travelers. But ideas for those regulations swing between two poles on the seven-member Vail Town Council.
At one end is council member Dale Bugby, who owns Vail Resort Rentals, a long-time property management company in town. With Bugby’s participation and support, a group of lodging managers in August asked the council to regulate units rent through websites including Vacation Rentals By Owner (VRBO) and AirBnB. Those sites allow owners to put their units directly on the Internet without using local management companies or a condo complex’s front desk.
The regulations the lodging managers asked for included safety and cleanliness inspections, among other items. The proposal was soundly rejected by most of the rest of the council.
To learn more about what other communities do, the council recently asked Destimetrics, a Denver area-based consulting and research company, to examine how 13 other resort communities regulate Internet rentals.
The results, presented at an October meeting, showed that from the beaches to the mountains, showed Vail is virtually alone among local governments that don’t regulate rent by owner units.
The study showed that nearly half of the towns with regulations want to keep an eye on occupancy and lodging tax collection. In Vail, where the lodging tax is nearly 10 percent, under-the-radar rentals could mean a lot of lost revenue.
Resorts including Winter Park, Mammoth and Hilton Head require rent-by-owner operations to have business licenses, and, of course, require sales and lodging tax payments.
Bugby said he hopes the council will eventually impose similar requirements.
That’s where questions start to arise.
Council member Margaret Rogers has a different opinion of the need for regulations. While acknowledging the need for owners to submit taxes that are due the town, she wonders just who should be asked to pay for a business or lodging license. Federal tax law requires owners to declare they’re in the lodging business if they rent their units more than 14 days a year. Rogers said while more work is needed on the topic, the federal threshold could be appropriate.
Mostly, though, Rogers said she doesn’t want to interfere unnecessarily with a growing market.
Aside from government regulation, Rogers said many condo complexes could impose their own rules about rentals-by-owner.
Rogers said she uses rent-by- owner sites often when she travels, and enjoys the experience. Scott Gubrud agreed. Gubrud, the sales and marketing director for the Four Seasons Resort Vail, said condo owners at that property who choose to rent their units use the hotel’s program. But, he added, the experiences he’s had with rent-by- owner units in his own travels have all provided good experiences.
That market is only going to grow, as more users decide to book without intermediaries.
Bugby said that’s why Vail needs to act. From his perspective, the town stands to lose revenue. And, if people are booking substandard units, they may not come back.
Rogers has said she believes the market will soon sort out units that aren’t up to the town’s high standards.
At the moment, Vail Town Attorney Matt Mire is working on a draft ordinance. Bugby said he believes that draft, and further discussion with fellow council members, “can get us probably three-quarters of where we need to be.”
That, he said, would be requiring everyone in the rent-by-owner business to get business licenses before their list their units.
While Rogers and Bugby agree that owners should be paying appropriate taxes, Rogers said she hopes any future regulations aren’t too onerous.
“I don’t think government should be in the business of deciding who’s going to win or lose,” she said. “But we do want to make as even a playing field as possible.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org or @scottnmiller.