TELLURIDE – The Telluride Town Council will consider the first reading of an ordinance at its Tuesday, Oct. 26 meeting that, supporters believe, could provide economic benefit to the town and its homeowners, particularly those at risk of foreclosure, and critics view as tantamount to changing the town’s zoning regulations, which could negatively impact properties in both residential and accommodations districts.
The item, scheduled for 2 p.m., asks council to consider relaxing the current restrictions limiting short-term rentals in residential districts based upon recommendations developed by the town’s Planning and Zoning Commission with public input.
The measure evolved from an attempt by council to address and capture lodging and sales tax and business license revenues being lost by the town through the proliferation of rentals direct from homeowners to renters through websites designed to promote them.
Additionally, it is hoped that the measure will help to level the playing field for landlords and property managers who, in paying the required taxes and fees, are under-priced by those who do not.
“The cyber rentals, as I refer to them, that network of renting has caused a significant impact on the lodging landscape in general in the community,” said Telluride Tourism Board CEO Scott McQuade.
“What started several years ago as a couple hundred rentals is now over 400 rentals in the region,” he continued.
One change would end a current exemption allowing owners to forgo obtaining a business license for renting out a residential property for not more than 15 days a year to require business licenses for all short-term residential rentals.
“Anyone who rents has to pay,” said McQuade. “That does level the playing field between property-management companies and the private renter.”
Another change proposes to increase the current limitation on short-term rentals in residential districts from 30 days per year, over a maximum of three separate rentals, to 45 days per year with no limitation on the number of individual rentals.
Additionally, the ordinance proposes to redefine a long-term rental to include any rental of 30 days or longer from its current definition of a rental lasting six months or longer. Under the current code, rentals between 31 days and 6 months are not permitted.
If ultimately approved on second reading as proposed, the most extreme example of an allowable rental scenario in a residential district would include 45 separate one-day stays and as many as 10 30-day stays at a single property over the course of a 12-month period.
While the changes could provide some economic relief to homeowners in those districts who might be teetering on the edge of foreclosure (although potentially at the expense of owners in the accommodations districts also facing foreclosure) because they allow for such a high volume of rental turnover, they are viewed by some as effectively unenforceable by the town, which relies largely on neighbor complaints to discover violations.
“There’s no way anyone can track it,” said hotelier and former P&Z member Michael Zivian.
“It’s bad zoning.”
“To implement a code that is not enforceable undermines our zoning,” which was established because the community recognized it had distinct needs that needed to be met, agreed Carrie Koenig.
Koenig has a vested interest in the outcome of the discussion for two reasons: She rents out a condo she owns in an accommodations district and she lives in a long-term rental unit in a residential district that under the current short-term rental limitations her landlord has been content to make available for that purpose.
By opening the door to the possibility of making more money in the lucrative short-term market, Koenig worried that long-term housing opportunities for town residents may be lost.
“That’s the potential unintended effect of what they’re proposing,” she said.
“Why are we even considering turning our residential neighborhoods into a business district?” she asked.
“It’s in the best interest of the community to think this through in a long-term, holistic manner.”