Short-term rentals loom large over local affordable housing issue: How many are there are how are they regulated?
August 18, 2017
Housing issues in Grand County are neither new nor unique with large segments of the Front Range and Colorado high country struggling to address similar problems, but there are dynamics that are largely exclusive to the resort and recreation-focused communities of the Rockies, namely short-term rentals.
While it would be inaccurate to ascribe housing problems in Grand County exclusively to short-term rentals, their prevalence is a significant factor affecting housing availability overall. The crux of the issue with such rentals being that they could be transformed into long-term, affordable rentals for people other than vacationers.
Short-term rentals are unique accommodations, not technically hotels or motels. They are, generally speaking, second homes or vacation homes owned by private citizens who in-turn rent them out on a short-term basis, typically lasting a few days.
The effects that short-term rentals have on local housing issues are hard to define, but as the cost of housing stock in Grand County continues to rise, many investors are shying away from long-term rentals and looking for ways to maximize returns on investment. Short-term rentals are an attractive option for many, and can potentially cover, or at least greatly mitigate, mortgage payments, housing association dues and other costs associated with owning housing in the area.
Where the market for short-term rentals goes in the future is impossible to know, but as rental costs continue to climb in Grand County, the spectre of short-term rentals looms large over the conversation.
By the numbers: How many STRs are in the county?
Tracking down the exact number of short-term rentals in the county is no easy task as rental properties are regulated by each municipality and by the county separately, with essentially no uniformity to their regulatory structure.
Winter Park, Fraser and Grand Lake all require short-term rental properties to obtain business licenses from the respective towns. Officials from Winter Park, however, told Sky-Hi News that they had no solid data on the number of units within town, noting that many of the rentals are administered by property management companies that may oversee multiple units, but have only a single business license.
The short-term rentals in the Winter Park area pay a 7 percent tax, including a 4 percent sales and lodging tax, a 1 percent accommodations tax, and a 2 percent transit and trails tax that is assessed on all lodging accommodations.
Further north in Granby, however, short-term rentals are not required to obtain business licenses, but must obtain a sales tax license.
As in Winter Park, many short-term rentals in the Granby area are administered by property management companies that may oversee multiple units, all under one sales tax license. Though even under that dynamic, Granby town officials confirmed there are 88 separate entities remitting taxes within the town limits that manage either single or multiple short-term rental units.
The tax requirement for Granby is higher than Winter Park, topping out at 10 percent, which includes a 1.8 percent lodging tax that goes to the county, a 4 percent tax that goes to the town, a 2.9 percent tax that is remitted to the state, and an additional 1.3 percent tax that also goes to the county.
Granby also assess a $25 annual fee for those entities.
Grand Lake is the only municipality in Grand County that formally requires short-term rentals to individually register with the local government.
The total number of such rentals in Grand Lake typically fluctuates between 85 and 90, according to town officials.
The regulations in Grand Lake are among the stiffest in the county with the highest fee costs associated with short-term rentals. In Grand Lake, prospective short-term rentals must pay a $150 one-time-only application fee and an additional $600 annual license fee. The short-term rentals in Grand Lake must, as with the previously listed communities, comply with all town codes and regulations. Additionally in Grand Lake, the rentals are subject to a review process before their license can be renewed if the town has received any complaints about the property over the previous year.
The big numbers really emerge when looking at short-term rentals within unincorporated Grand County.
As of last week, Grand County tallied 345 short-term rentals, a figure that includes only those rentals located in unincorporated areas of the county and does not include any short-term rentals located within the boundaries of the municipalities within the county.
Increasing rates and regulation on STRs
The county's registration process for short-term rentals has been in place for at least five years.
Earlier this summer, however, the Grand County Board of Commissioners approved changes to the regulation of short-term rentals, including making increases in the fees required to obtain licensing and raising the annual permitting fee from $20 to $150.
At the same, the commissioners increased regulations on the properties and funded additional enforcement.
County officials said the number of short-term rentals registered with the county has increased since the policy changes were approved.
Kremmling's Town Manager Mark Campbell confirmed Kremmling has no short-term rentals within the boundaries of the town and no statutes regulating such rentals. Campbell suggested the distinction between people visiting communities on the eastern side of Grand County versus the Kremmling area and explained that short-term rentals are not currently a significant area of concern in Kremmling.
The total number of short-term rental entities overall that could be calculated for all of Grand County reached 522. Though that figure represents the number of short-term rental entities, not units. Because some entities manage more than one short-term rental unit, the total number of short-term rental properties in Grand County is undoubtedly higher than 522, potentially significantly higher.