Dec 30, 2022
After the findings of two mammoth studies on housing supply in Summit County and the surrounding region spurred county leaders to declare a “workforce housing crisis” last year, a domino effect of local legislation began. The target of some of those policies: short-term rentals.
In 2022, licenses for those properties became a dominant part of Summit’s housing conversation as town councils and county commissioners conducted community surveys, listened to hours of public comment and debated between themselves about how to manage housing units frequently owned by non-county residents.
The county now begins 2023 with two short-term rental license caps in effect in the towns of Breckenridge and Frisco and a moratorium on licenses in unincorporated areas of the county — which are outside of any town limits. County commissioners and Silverthorne’s town council also seem poised to pass their own caps, possibly within the next few weeks.
Taken together, the policies could provide another tool for local governments seeking solutions to the county’s housing needs. But as legislation ramped up this past year, so did community contention.
“Any conversation about regulating an industry, that’s going to be difficult,” said Summit County Commissioner Tamara Pogue. “There are a lot of folks who make their living off the short-term rental industry … there are also a lot of folks who’ve been priced out of the market or have seen the fabric of their community change.”
The impacts of short-term rentals on the county’s housing supply were among a slew of factors identified in a March 2019 to March 2020 study commissioned by the Summit Combined Housing Authority and conducted by consulting firm Economic & Planning Systems.
Presented to county officials in April 2021, the study included data from 2019 that showed about one-third of the county’s overall housing inventory was listed as a short-term rental. It also found about 70% of the county’s housing supply was vacant homes while 30% was occupied housing.
A study published in 2021 by Mountain Migration Report — which focused on Summit and five other counties — further illuminated the region’s housing problems. It found that from 2019 to 2020, rent increased 20% to 40% and that newcomers to the area with significantly higher incomes than year-round residents were the ones who usually secured what little housing units were available.
“The biggest thing is that if there’s no regulation in place, there’s a very good chance that there would be more properties purchased (for short-term rentals),” said Bela Del Valle, accommodations compliance administrator for the Town of Breckenridge. “And that, little by little, could push permanent residents out.”
Along with concerns about its effects on housing availability, officials and community members also discussed the impacts short-term rentals can have on quality of life. Noise and trash complaints were among some of the problems identified with certain properties, according to past reporting on town and county meetings.
Here’s where each town, and the county, stands on its short-term rental policy and how it got there.
On May 24, Summit County commissioners passed their second moratorium on short-term rental licenses in less than a year. The first, which lasted for 90 days, went into effect Sept. 17, 2021 and served as a precursor to what would eventually become a proposal for longterm caps on the county’s various unincorporated areas.
The moratorium allowed for some exemptions, such as anyone already under contract with a home who had planned to apply for a license. But a crowded county chamber on May 24 — which included property owners and realtors — spoke out against the measure, which they said would infringe on property rights and impact homeowners’ ability to make an income from renting.
A county report presented during the meeting found that 60% of short-term rentals approved so far that year had been in neighborhood zones. It also found that 68% of all short-term rentals were owned by someone who lived outside of Summit County, prompting commissioners to take action amid concern that local residents were continuing to be priced out.
According to Pogue, who sits on a subpanel that advocates for rural mountain communities and makes housing and health recommendations to the state legislature, the large amount of short-term rentals eating into the county’s already low housing supply is unsustainable.
“We need to preserve as much housing as we can in Summit County for locals while we’re trying to build more,” she said. “There is a link between the lack of workforce housing and the short-term rentals in the county.”
The moratorium, Pogue said, was done because commissioners “didn’t want to make rash or snap decisions” as they weighed caps for short-term rental licenses. Despite overwhelming vocal opposition during county meetings to the measure, a county-led survey with more than 1,700 responses showed a majority wanted some form of legislation on short-term rentals.
As the year continued, commissioners began honing in on a cap on licenses. First came an October legislative recommendation from the county’s planning commission. Then, during a Nov. 15 meeting, commissioners agreed on caps for the county’s unincorporated areas.
Those caps — which determine what percent of the area’s housing units can be short-term rentals — call for 18% for the Upper Blue basin, 15% for the Lower Blue, 6% for the Ten Mile and 5% for the Snake River.
A moratorium on new licenses is still in effect for the beginning of 2023 and Pogue said she expects the caps may be voted on in January and could be implemented the following month. Even if the legislation passes, Pogue said the county government is “certainly not done in this process.”
Breckenridge Town Council was the first to pass a license cap in Summit County — with a limit of 2,200 licenses that went into effect Nov. 2, 2021 after it was approved by council members earlier that year.
Council members also approved a fee for short-term rental license holders of $400 per year for each bedroom or studio apartment which went into effect in 2022. That fee will climb to $756 in 2023.
Breckenridge has the highest concentration of short-term rentals in the county, with 56% of its entire housing supply having a license, according to Del Valle, the Breckenridge compliance administrator. Unlike other towns and the county, Breckenridge’s council did not create caps based on a percentage of housing units, opting instead for a number.
But it had not yet determined where those rentals could be. That changed last August when council members approved a map that would divide up that 2,200 cap across the town.
In past council meetings, some public comments became heated as concerns grew over whether rental caps would impact tourism in a town known to be the economic powerhouse for the county.
Del Valle said the council “recognized that our town relies on short-term rentals as a bed base” for the local economy.
“On one side, they had to find a way to regulate this,” De Valle said. “But we also know how important short-term rentals are.”
To address such concerns, council members voted Aug. 23 to divide the license cap throughout the town in a bid to keep more short-term rentals in tourist areas rather than residential neighborhoods.
Four zones were created for this: the first includes parts of the downtown and ski areas which will be capped at 1,680 short-term rental units; the second is mostly made up of Main Street and will be capped at 130; the third, which is mostly residential neighborhoods, will be capped at 390 and the fourth, designated for resort properties such as hotels, will have no cap.
But those numbers don’t currently reflect the number of short-term rentals currently in Breckenridge.
According to Del Valle, the caps don’t include licenses already in effect. This means most zones have short-term rentals already exceeding the cap, such as in the third zone which is capped at 390 but has over 1,200 rentals, Del Valle said.
Del Valle said “the loss of licenses will happen through natural appreciation” such as if a property is sold or a license is not renewed. For an area with 1,200 short-term rentals, that could potentially take decades, according to Del Valle.
Less than two months after Breckenridge passed its caps, Frisco followed suit with a blanket license cap set at 25% of all residential housing units. The measure passed during a council meeting Oct. 11.
When passed, the cap translated to a maximum of 900 licenses, though that will fluctuate depending on the town’s housing stock.
The cap also included exemptions for residential properties that are under construction or under contract as of Oct. 11 and gave those property owners 20 days to apply for a license from their closing date or from the date that they receive a certificate of occupation.
Though some lawmakers in the county were spurred to act on short-term rentals partly as a response to the lack of affordable housing, several Frisco council members said that was not the direct intention of their caps. Instead, the focus was on maintaining a sense of neighborhood character.
Frisco voters did, however, approve a 5% increase to the tax rate on short-term rentals during a municipal election April 5, which passed with 64% of the vote. With the town projected to generate $1.5 million in revenue within the first fiscal year from the increase, officials said the money will go towards affordable housing projects which could include developing new housing or creating deed-restricted housing for existing properties.
The most recent governing body to move towards short-term rental regulation, Silverthorne’s town council approved an ordinance on first reading on caps during a meeting Dec. 14.
“It might be one of the top 10 hot topics in local government, wherever you are,” said Silverthorne Town Manager Ryan Hyland. “Obviously, there’s a lot of emotion around the topic.”
As neighboring communities pushed for more regulation, Hyland said the likelihood of a similar policy in Silverthorne grew greater in recent months.
“I think if there are no licenses available in one community but they are still in another, I’d imagine the economic flow from a buyer or an investor might push that,” he said.
The plan will still need a second review before it receives a final vote expected on Jan. 11. But after being endorsed by a majority of council members Dec. 14, the policy appears on track to pass. Under Silverthorne’s proposal, the town would be divided into three areas with different license caps.
The first and largest area would encompass much of the town’s main corridors and neighborhoods and would be capped at 10% of the town’s housing units. The second, which includes much of the southern downtown area along the Blue River as well as Summit Sky Ranch to the north, would be capped at 50%. And the third, which encompasses what staff called much of the town’s workforce housing just south of the Willowbrook neighborhood, would not allow any short-term rentals.
Currently, the town has about 280 short-term rental licenses. According to Mark Leidal, assistant town manager and community development director, if the proposed caps were implemented it would allow for a total of 740 licenses, which would represent about 20% of the town’s entire housing stock.
Conversations around regulating short-term rentals in Silverthorne began last June when the Town Council directed staff to draft an ordinance that would limit licenses.
Outreach soon followed, with a town survey in September that garnered more than 1,400 responses and found a majority of residents in favor of some form of license cap— though a majority of residents were also opposed to a cap as high as 50%.
Still, a majority of council members voted in favor of moving forward with a cap range of 10% to 50%.
Hyland said if the policy does pass, it will still be open to regular council review and possible changes — meaning caps could be raised or lowered.
“It’s an evolving area,” he said, “and I would imagine in a growing community like Silverthorne, the landscape’s going to change.”
Silverthorne voters also agreed to triple the town’s lodging tax, an increase from 2% to 6%, that will fund community projects and services that address visitor impacts on housing, recreation and public safety.
Dillon Town Council is the only group of lawmakers in the county yet to propose a cap on licenses for short-term rentals. But the community appeared divided on the issue last summer.
During a July 27 open house at Dillon’s town hall hosted by the county government, some attended to protest regulating short-term rentals in the county’s unincorporated areas while others voiced their support for efforts to make more workforce housing available, according to past Summit Daily News reporting.
The town did, however, approve two lodging taxes in the November 2022 election — a 4% excise tax on lodging and a 5% short-term rental tax.
Taken together, the revenue raised from both taxes — which would be paid partly by those staying in short-term rentals — is planned to go towards improvements to public safety, street improvements, parking improvements and town center redevelopment.
Voters also approved using money from the town’s sales and use tax — as well as raising the town’s debt to $20 million with a maximum repayment cost of $35 million — to pay for workforce housing projects.
