The Town of Breckenridge Town Council met this morning to discuss changes to the Short-Term Rental License Ordinance that passed on first reading Tuesday, Sept. 14th. They approved staff recommendations to include a few exemptions for second reading including transfers as a result of the death of the owner, transfer to a family member(s), divorce, or similar circumstances, an exemption for properties with an active building permit and homes under contract at the time the ordinance passes second reading and exempting 1031 exchanges. Similarly, they discussed ideas pertaining to overlay districts, license tiers, fractional property ownerships, and others that will require a work session deeper discussion.
Short Term Rental License Ordinance Discussion
Mayor Mamula calls the meeting to order, noting that they are in public to discuss some of the things we heard from first reading, we will not welcome public comment today. The Town Manager speaks to council on some of the points bought up on Tuesday that were thoughtful pieces to consider. Do we want to change some things before 2nd reading and some later – there are some that are easy fixes and there are some that would require more discussion and separate legislation.
He begins with the exemptions portion of the memo. This includes the transfer of an STR license with the death of the owner, transfer to family members, divorce, and fractional properties, and active permitting, as well as 1031.
The council discusses and is okay with immediate family transfers. What if there is a scenario where someone doesn’t have kids but wants to leave it to someone. If it is being transferred while the person is still alive you can say family and next of kin as well as inclusion of the will. Staff doesn’t want to be in the business of confirming familial relationships. In instances of name changes that would be fine too.
Fractional properties where a number of people own a single property and one of the members wants to sell. Councilor Owens shares her concern that this one seems part of a bigger issue, this could play into the larger llc problem or time shares etc. They decide not to include now and talk more about it at a future time.
Active building permits – Councilor Gigliello asks how you know if its intention is to STR or not? Councilor Carlton notes that we should just include the number of homes with active building permits and then raise the cap by that number too. He would also like to include the number of homes under contract too. For building permits I’d give them 18 months but real estate contract 6 months to buy the license, I’d say anyone that pulled a building permit prior to 1st reading give them 18 months to complete and get the license. Anything that was under contract until 14th. The Town Manager notes that they were proposing that everything takes effect when the cap goes into place, so the deadline wouldn’t be the 14th they would all be moved to Nov. 2nd when this would go into effect. There is agreement from councilors and Councilor Owens pushes back asking about unintended consequences. Councilor Bergeron comments that other than panic buying, I think there are legitimate examples here where folks should be able to purchase this property when they went forward with it. There is confirmation of agreement with the building permit inclusion. Councilor Kuhn is fine with building permit inclusion and under contract for Nov. 2nd. The Mayor is as well.
Councilor Carlton talks about adding the number of the permits and caps to the 2,200 caps. We’re talking about adding 150 max – worst case would be increasing the cap to 2,350. I don’t think it will have a significant impact on the cap – we will know what the number be on Nov. 2nd. I think this is a good compromise. Councilor Gigliello doesn’t want to incentivize people panic applying for licenses. Carlton notes that we are going to increase fees and that will discourage people. Councilor Owens notes that everyone renews automatically in January and then they will make a financial decision based on the new fees.
Todd in the audience says there were 88 home sales in the last 30 days. Mayor Mamula asks if we want to increase to 2,350 is the real question. A lot of these properties that are under contract may have a license already and therefore won’t increase the number. The mayor asks if we want to include current listings too. Councilor Owens is okay with the building permits and sales but keep the cap where it is. A number of councilors agree. They confirm that they are going with “under contract” by September 28th.
The staff notes that they can exempt 1031s if they don’t comply with current law. Its really only maybe 5 a year. They move forward with that exemption.
They move on to discuss the exemption core. The Mayor talks through the 47 land use districts for the planning code to see what goes where. There is a historic overlay. The land use district map is what we use for all planning code decisions. The mayor comments that through the land use district guideline map, we already have zones that have been set aside for certain uses. For instance, district 23 which sits right in the middle, allotted intensity due to proximity to ski base. 20, 21, 22, 23, 39 and 40 all have language on high intensity residential use due to proximity to ski base. My thought was, if we want to think about a tourism core, which we can’t even do before second reading, we could leverage this as an overlay district because this is our town map without people asking why their building wasn’t included. We can then get away from the exempt property’s districts and because all the exempt properties are in these districts. This would remove the exempt property push back. The overlay district would have to have an increased number and you’d have to have the 2,200 be smaller because the overlay zones would change. Land use district 10 is to allow development of diverse housing types for the permanent resident; therefore, it would not be included. Councilor Bergeron notes that he is in support of this – he wants 4 o’clock and columbine circle, timber trail, land use district 49 with ski hill would be included. He agrees with this land use map overlay strategy. Councilor Gigliello asks if we can get an overlay of STR and LTR the answer is no.
Councilor Saade says she really likes this idea. It makes a ton of sense, the 4 oclock folks were very compelling on Tuesday.
Carlton asks for this to be a full ordinance on its own. Town manager notes that this is so significant that we would have to repeal the original cap and repass the new one in the future. Mayor Mamula notes that no, other neighboring towns don’t have ski base proximity language and staff shares that this is where they would have to rely on their own planning districts in Breck – see above.
Councilor Gigliello shares that this zoning makes her nervous. This brings up a lot of equity questions, this could end up in a place that isn’t equitable. Councilor Owens notes that she supports this, she thinks that this overlay zones will encourage STRs to go into the appropriate zones. Erin says that makes her nervous that then people will all move out of those and into the long-term neighborhoods.
There are a number of councilors who thank Mayor Mamula for doing this work and bringing this forward. He encourages everyone to look at the land use map. As we discuss this in a second conversation then we will get a lot of feedback from the community. We will do this as a work session and then 1st and 2nd reading. They will ask planning commission to take a look at this and then come back to council rather than a joint meeting. They decide to have the work on this topic on the 26th
They discuss the limit of llc’s having a limit on licenses. How do you actually limit that, anyone can have an llc? Councilor Carlton asks if we can put this on the agenda for our next meeting. I think it’s a good idea.
Tiered license system – this would include a different license for locals who want to have a short term rental license for the holidays for example. Bergeron asks if we could include an ADU STR license or a lock off, staff pushes back that we are trying to incentivize the ADUs to be deed restricted. Owens comments that we have a long way to go on enforcement with ADUs and noise compliance etc. I think keeping the simple structure will benefit people who are impacted by STRs. Bergeron comments that the one simple thing we could do is allow people to rent out their owner occupied, primary residence then you can rent a room in their home. They would pay the fees for licenses. Councilor Saade wants more time to work with staff. Councilor Owens comments that this is a direct conflict with workforce housing – that’s how our people live here. Bergeron and Saade push back and they request to have this item on a work session. The mayor comments that the first thing we noticed with AirBnb and VRBO was the loss of units just like this. We really need to vet this idea before pulling the trigger. Councilor Kuhn says these places would need a “green sheet” from the building department to get sign off on the town – sanitation, fire, and planning.
Mayor Mamula asks about the idea for trading LTR time for STR time. This would be an incentive program for 6 month LTR and then they get an allotted time for STR. Owens is in support. Gigliello asks what happens when you get rid of the workforce housing? Owens comments that they would support seasonal rentals.
The final idea on the list is talking about allowing every two or three licenses that vanish, we allow 1 person to get a new one. Bergeron pushes back that we are doing this to reach the cap – we can use incentives like the one we just discussed rather than allowing more. A number say not now but maybe in the future. They discuss whether new sale or build get a period of time to apply and there wasn’t a lot of interest. They discuss the idea of notifying people next up on the list in 5-14 days.
Fees will be worked out through ordinance, nothing will go into place prior to the 1st of the year. Within the next 30 days you’ll have a better understanding of the direction, since we lose the second meeting in December we’d maybe not meet the Jan. 1 deadline. Therefore, we’d push the renewal to Feb. asking that everyone pay the new fee structure and keep them renewed through then.
They discuss the PR push out, staff comments that the will have a press release out on Monday and include the housing efforts too.
Someone asks about landing locals. Staff is working in conjunction with the county to have something going out in mid-October for the landing locals grant program for incentivizing LTR – $5-6,000 for one bedroom and more for additional bedrooms. We’re working out the details on the clearing house now, we know that there are properties ripe for this – goal is for launch in October.
Councilor Owens asks about line Q in the specific ordinance on STR immanent threat. Staff comments that they will change to STR immanent threat in certain areas. She continues with questions on employee housing comments, and staff notes that they don’t want to include workforce housing in this specific ordinance. She asks about F, and notes that it seems misleading because most of the STRs are on the ski area side. Can we just take out the historic district entirely, everyone agrees.
The town manager asks if council wants to start the meeting early next meeting. They decide to start the meeting on the 28th at 6 pm.
The meeting is concluded.
