Grand County still considering nightly rental policy
The ability to rent out a residential home on a nightly basis may become a use-by-right in Grand County, if commissioners adopt new zoning regulations.
It may come as a surprise to many that renting one’s home for the short-term (less than 30 days) in the estate, residential and mobile home zoning districts of the county has long been a violation of county zoning codes. But for just as long, the county has turned a blind eye to this common practice for what county officials have said is a lack of specific regulations to enforce the provisions.
Meanwhile, some homeowners who live near “problem” rentals have complained about commercial disturbances in what are supposed to be quiet residential neighborhoods.
But homeowners hoping to subsidize their mortgages, rental managers and real-estate brokers had feared the county would try to outlaw the practice, or adopt a cumbersome permitting process to address the nightly rental problem.
It’s estimated the practice is widespread, with about 20,000 beds available countywide, with 500 or fewer classified as commercial lodging rooms.
In exploring ways to address the issue, the county planning commission rejected requiring homeowners to obtain permits, which is how the Town of Grand Lake solved the issue. Because nightly rentals have a significant property-tax advantage over commercial operations, to level the playing field, Grand Lake requires homeowners to pay for a $400 license in order to rent out their homes short-term.
But county officials were discouraged by the potentially high cost of administering this option and the amount the county would need to charge homeowners to “level the playing field.”
The current proposal simply adds new regulations – or “teeth” – to the county’s zoning regulations.
A second violation at a property could cost a homeowner $500. A third could put a homeowner through the court system.
“Some regulation is better than no regulation,” said Grand County motel owner Kim Mullinex. But for her Highway 34 motel business, short-term rentals at private homes pose little competition, she said.
Her Blue Bird Motel has roadside presence and caters to walk-in overnight guests and long-term renters, a different market than the person renting out his or her home short-term, she said.
But what Mullinex does worry about is how the short-term rental market squeezes out the availability of homes for long-term renters, many of whom are among Grand Lake’s workforce. In the Grand Lake area, she said, “people are always looking for a year’s lease. It’s hard to find housing.”
In talking with other motel owners on the Highway 34 corridor, few were truly against the short-term rentals.
‘A little more equal’
But in the bed and breakfast industry, short-term rentals are competition in Grand County, according to Barbara Parker, owner of the Outpost Bed and Breakfast on CR 517 near Fraser.
Unlike some lodging owners, Parker is not on a main highway and works hard to market her establishment similar to Vacation Rental By Owner landlords. But such VRBO homeowners pay the 7.96 percent residential property-tax rate in Colorado, where owners like Parker are subject to the 29 percent commercial property tax rate.
Parker, who has operated her bed and breakfast for 17 years but presently faces foreclosure and bankruptcy, said she realizes stopping short-term rentals would “kill the real-estate market,” but she advocates “making things a little more equal.”
She can’t compete with “prices they charge for 15 people in a three-bedroom place,” she said. “Every piece of competition that works against me contributes to putting me out of business.”
To Gary Glenn, broker-owner of Metro Brokers Colorado Resort Sales, Winter Park, the county regulations being proposed are ill-timed when homeowners are struggling to keep their vacation homes.
And the regulations are really unnecessary since the Sheriff’s Office has always been in place to handle neighbor complaints of loud parties, blocked driveways and improper trash disposal.
Instead, he said, the regulations being proposed “turn your neighbors into police. It doesn’t create a very good environment.”
And why are regulations singling out short-term rentals when long-term rental properties can have the same problems? Glenn asked.
At least short-term properties generally charge a high nightly fee and are kept in good condition to attract repeat renters, he said.
According to information that has come out during public meetings on the issue, there have been roughly four to five homeowners who have consistently complained about their nightly rental neighbors, which indicates there have been few problematic rental properties overall in the county.
Glenn would rather see a “positive spin” rather than a “punitive spin” when it comes to addressing overnight rentals in residential zones. Simply educating homeowners and the public about sales taxes and good-neighbor conduct would go a longer way than “singling out” short-term rental homeowners with new regulations and steep fines.
“I think education would fix the problem,” Glenn said.
Tonya Bina can be reached at 970-887-3334 ext. 19603
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