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Voters overwhelmingly approve Airbnb and Vrbo taxes in some Colorado ski towns

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Nov. 16, 2022 update:  Voters in Colorado's ski country voted to approve taxes on short-term lodging properties such as Airbnb, Vrbo and timeshares.

In Summit County, 72.8% of voters supported a 2% tax on short-term rentals. County commissioners anticipated the tax would raise about $5 million a year, which would fund workforce housing projects.

In Steamboat Springs, nearly 63% of voters supported a 9% tax on short-term rentals. The city's tax would also go to support attainable housing for workforce members.

You can read our original reporting on these measures below.

STEAMBOAT SPRINGS, Colo. — Beccy Brane clocked 10 years in her rented apartment. The 10 years of laughs, memories and gathered furniture that filled her floors lingered in her mind when she received the news that her landlord was selling the property in 2021 to an owner that was likely to rent the place on Airbnb and Vrbo.

“I was stunned that I suddenly needed to be out of the place I’d been in for 10 years,” Brane said.

Brane has lived in Steamboat Springs for 30 years. She managed a doctor’s office for most of her time in the northwest Colorado ski town, but when the physician retired, Brane sold her home and rented an apartment.

After a months-long search to find a new apartment to replace her home of 10 years, Brane finally found a place that met her budget and needs. But once her lease ended, Brane found herself on the housing search again, as her landlord wanted to raise her rent $1,000 to “compete with market value.” 

Her most recent search felt impossible. As a single, retail worker, Brane felt she could not keep up with prices landlords were seeking, which she said skyrocketed in the 30 years since she moved to Steamboat Springs.

After landing a lease, Brane got the news again: her landlord planned to rent the apartment on Airbnb, as the profit margins are much higher renting to nightly tourists than to long-term residents.

“It’s been a nightmare,” Brane said.

A ski town problem 

As COVID-19 gave thousands of workers flexibility in where to do their jobs, many fled cities for remote work in quieter, mountain communities. A survey conducted by the Colorado Association of Ski Towns and Northwest Colorado Council of Governments found Colorado’s mountain communities saw massive growth in their populations in 2020. Alongside community growth came a shortage of housing options and an increase in rent prices.

As swaths of workers have returned to in-person offices, Margaret Bowes, the executive director of the Colorado Association of Ski Towns, said many of those who formerly found home in a mountain town are now renting their property on Airbnb or Vrbo to nightly visitors rather than long-term tenants. 

Bowes said mountain communities have long-relied on short-term rentals to house visitors, which keep their tourism-based economies afloat. The delicate balance, Bowes added, is ensuring visitors keep coming to town while residents can still afford the place they call home.

“There have always been some form of short-term rentals in resort communities, and it’s certainly an important part of a resort economy,” Bowes said. “But what we’ve seen in recent years with the popularity of Airbnb and Vrbo is that short-term rentals have just grown considerably.” 

As short-term rentals continue to pop up across mountain towns, what was already a limited supply of attainable housing for locals continues to dwindle, particularly as more landlords realize they can make more renting on Airbnb than renting to a restaurant server, teacher or ski lift operator.

“Properties that had always been rented to members of the local workforce have now transitioned to short-term rentals, and the result of that has gotten pretty serious,” Bowes said. “It’s made even long-established businesses struggle to fill positions.” 

[Related: While vacation homes sit empty, workers in Ouray struggle to find affordable housing]

Living the problem

Even those who make what they see as an appropriate wage said they’ve found it nearly impossible to find housing for rent or purchase in Colorado’s ski communities.

“I don’t think there’s anything left for us,” said Stephanie Appel, a Steamboat Springs resident. “I’m an architect and my husband is an engineer, but that still isn’t enough.” 

Appel and her husband moved to Steamboat from Carbondale in 2019 and opted to rent property rather than buy a home, as they thought the move was temporary. Once the two realized the move was permanent, they could not find even a small condominium selling under $600,000, the two said. They rented a mold-infested house for several months, which was their only option in a desperate search. Their landlord later sold the home for $1.2 million. 

“I have a lot of friends who are just having to leave because it’s become unlivable,” Appel said. “How can we compete with Airbnb prices?”

Others renting in mountain towns said wages simply are not keeping up with housing costs.

“I make decent money, but my husband works for a company here in town that does not pay accordingly,” said Robin Pazera.

After finding out their rental of five years would be doubling in rent, Pazera said she and her husband thought for sure they’d need to move out of town. When the two gave up five years in their rental, they knew finding another option that fit their budget would be next-to impossible.

“I didn’t even know what to say when I found out,” Pazera said. 

Addressing the problem

Mountain municipalities across the United States have found themselves in a similar predicament: how to ensure housing remains attainable for locals while also making sure visitors have lodging options.

Bowes said many municipalities also want what have traditionally been “locals’ neighborhoods” to remain that way, as many residents want to know their neighbors, rather than seeing a different neighbor each week. Rotating, nightly guests have often led to noise complaints, parking issues and problems with leaving trash out, which can attract bears in the high country. 

Some Colorado communities have attempted to mitigate the issue before it got out of hand. Salida, for example, has restrictions on the number and location of short-term rentals in town.

“The concern at the time was if we didn’t do something, the possibility was everything would convert, so we wanted to be pre-emptive,” said Salida Mayor Dan Shore. “Every survey we’ve done, we’ve gotten feedback from the community that they feel like there are challenges and issues with short-term rentals and they would like to see them reigned in a little bit.”

Shore said the city tried to get ahead of the issue in 2021, while Salida is still slightly more affordable than other Colorado communities. The goal of the cap was to ensure housing there stays attainable.

“The biggest concern has been that we have a workforce that can’t find housing,” Shore said. “This is just part of an approach to figure out ways to lessen that pressure.”

Until last year, Colorado only allowed municipalities to tax lodging properties if the money from the tax went towards marketing the municipality. A bill in the 2021 legislative session changed that, and mountain cities and counties are now taking advantage by putting lodging taxes on their 2022 ballots. 

In Summit County, for example, voters are being asked to approve a 2% lodging tax on nightly rentals in unincorporated parts of the county. The 2% is expected to raise $5 million a year, which would then be put towards workforce housing, childcare and managing impacts of increased tourism.

Elisabeth Lawrence, a Summit County commissioner, said the proposed tax is there to help put a dent on the county’s housing crisis. 

Summit County has more short-term rentals than any other municipality in the country, with one-third of the properties in the county classified as a short-term rental, according to the county’s website. 

“We understand, in Summit County, that short-term rentals are a very important part of our economy,” Lawrence said. 

Over time, however, Lawrence said short-term rentals have moved out of areas backing up to the county’s four ski resorts where visitors have always stayed and are now flooding what have typically been “locals’ neighborhoods,” where those who keep the county running can rest their heads at night.

As a growth in short-term rentals has squeezed workers out of their homes, Lawrence said the county is now trying to catch up and solve the issue. They’ve placed two moratoriums on applying for a short-term rental permit and are proposing a 2% tax on the 2022 ballot.

“The real fabric of a community can’t survive when there’s not enough housing for the folks that really built that community,” said Tamara Progue, another Summit County commissioner. “The conversation is about finding balance.”

Steamboat Springs voters will also decide whether or not they’d like to levy an additional 9% tax on short-term rentals, such as properties found on AirbnB and Vrbo. City officials plan to use money from the tax to cover the costs of a major affordable housing project, which will bring 2,300 units to Steamboat. Officials suspect revenue from the tax could cover about half the cost of the project.

For many, the tax is a necessary tool to put a dent in what they see as a massive housing crisis.

“I can’t even count how many friends and people I know that have left over the past few years, mainly due to the housing issue,” said Dakotah McGinlay, a Steamboat Springs City Council member. “The availability of housing has been impacted by short-term rentals.”

In her first year on council, McGinlay has helped push the tax, saying it is necessary to ensure workers can continue to afford the city their job resides in.

While many believe short-term rental taxes are needed, others see them as an unnecessary burden on businesses.

“At the end of the day, that ends up having a big impacts on our business, and anything that impacts our business impacts our local economy,” said Robin Craigen, founder and CEO of Moving Mountains, a luxury vacation home rental company with branches in Steamboat, Beaver Creek and Vail. “It’s trying to help one group at the expense of the other. And the other is the economic engine that keeps this community afloat.”

Alison Berg is a multimedia journalist who can be reached at Her Twitter is @alison__berg.

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