As Airbnb and other vacation home rentals continue to grow in Colorado and across the nation, Jefferson County is shaping up as the state’s next flashpoint for communities intent on getting ahead of an industry often perceived as flying under the radar.
Golden this week passed a set of short-term rental rules that calls for licensing homeowners who rent out a room or house in the city for 30 days or less. One of the biggest and the most controversial among them is a stipulation that the property for rent must be the owner’s primary residence.
The Lakewood City Council held a study session on the topic Monday and plans to work up regulations of its own later this year, noting that it currently has upward of 300 homes involved in unregulated short-term rentals. Wheat Ridge has similar plans.
“It’s a priority for council discussion this year,” Wheat Ridge city manager Patrick Goff said.
The regulatory forays on the metro area’s western flank come in response to the explosive growth — both recent and projected — in a segment of the burgeoning sharing economy in which homeowners rent space to visitors and tourists using online property brokering services such as Airbnb and VRBO.
According to Airbnb, the industry’s dominant player, Colorado homeowners who rented their properties in 2017 through the company’s website earned a total $183 million from 1.2 million guests — a 68 percent jump in the number of guests from 2016. Cities that have passed short-term rental regulations in recent years include Boulder, Denver, Fort Collins and Breckenridge.
Nationally, the “private accommodations market” is expected to hit $36.6 billion by the end of this year, according to travel industry research firm Phocuswright. That’s up from just over $20 billion in short-term rental activity six years ago.
Tourist-heavy Golden, viewed by many as the gateway to the Rocky Mountains, began receiving inquiries — and some complaints — last year about neighbors renting out their homes on a short-term basis, said Amber Wesner, city planner for Golden.
“There was concern that it might be getting out of control,” she said.
City leaders imposed a half-year moratorium on the activity in January to give themselves time to craft rules for the rentals.
The city found that 114 properties were listed as short-term rentals even though only about a dozen specially designated “tourist homes” in Golden were actually licensed to rent space to visitors for a month or less.
Councilwoman Laura Weinberg posed the question “What makes Golden Golden?” during Thursday’s City Council meeting as a guidepost for limits on an enterprise that risks eroding the city’s small-town and local-neighborhood flavor.
“What changes the character of Golden is not knowing our neighbors anymore,” she said.
That drove the city to include a primary residence rule for property owners, which requires that they “occupy or reside in” the licensed premises for at least 10 months of the year in a residential zoned area of the city (the primary residence requirement would not apply in commercial areas).
Patty Evans, chair of Golden’s planning commission and a decade-long city resident, said the primary-residence stipulation should prevent absentee landlords and real estate investors from buying up a block of homes and putting them up for short-term rent. Denver put in place a similar restriction when it passed its short-term rental rules two years ago.
“Having an owner-occupied restriction will maintain a residential feel in the neighborhood,” she said. “Having a whole neighborhood turned over for commercial use when it’s supposed to be residential is not the intent of the city code.”
But real estate broker and Golden resident John Hermanussen believes the city’s new rules are an overreach. He owns a short-term rental property that is not his primary residence and will have to decide what to do with it once Golden’s ordinance goes into effect next month.
“As long as it’s not bothering the neighbors, I don’t see why I shouldn’t be allowed to do short-term rentals in a house,” Hermanussen said. “I live here, too.”
Not only will landlords in his situation lose thousands of dollars in revenue from investment properties they can no longer rent out, he said, but Golden will be forgoing tax revenues it could collect on the rentals. Owners of short-term rental properties will have to remit a 3 percent sales tax to the city, according to the new rules.
“It seems like this requirement is taking away private-property rights, like the ability to earn income from your property, and therefore the value of private property, while legislating that we ‘know our neighbors,’ ” Hermanussen said.
But Wesner said the city is actually opening up a use in neighborhoods — at least officially — that was previously barred under the city’s zoning rules. Golden, she said, wanted to make sure that people could use their homes or portions of their homes to earn rental income to help offset the skyrocketing cost of housing in the city.
But not at the expense of community cohesiveness.
“We’re giving more flexibility to all residential zoned districts for short-term rentals but protecting neighborhoods by requiring primary residency,” Wesner said.
Golden’s rules also require that every short-term rental unit be equipped with an operational smoke detector, carbon monoxide detector and fire extinguisher. Licensees must provide and maintain fire, hazard and liability insurance on their properties.
First-time violators of the city’s ordinance will be assessed a $150 fine. Second violations will cost $300, and third-time offenders will have to pony up $1,000. After that, the city will revoke the license.
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