[bouldercouncilhotline] Hotline: Forwarding letters on Short Term Rentals

[cmosupport at bouldercolorado.gov]

Sender: Weaver, Sam


Fellow Council members,
 
This Hotline post is to forward two emails and two attachments that we received in July from Dan Bowers, who is working with the short term rental owners to gather short term rental data and suggest rental policies.  Since these both arrived over a month ago, I wanted the data this group provided to be fresh in our minds for tonight’s discussion.
 
Begin forwarded email #1:
Hello Council,
Thanks again for your detailed and thoughtful approach to Short Term Rentals. At the June 2 meeting we (those who spoke for STR) heard your concerns regarding the impact of investor rentals to both the housing stock and the prices of the houses that may be licensed for STR.  Since then, we’ve taken a number of steps to determine approaches that would mitigate these negative impacts and still allow a revenue stream for affordable housing.  To create this proposal, we’ve taken several steps:   1) discussions with
 owners and council members; 2) detailed analysis of P&L data from 17 actual STR’s; 3) driving support for an alternate proposal in the STR community (the proposal below).

We believe that investor owned STR’s can contribute significant tax revenue to affordable housing and have appropriate regulation in place to mitigate the negative impacts.  To achieve this, we propose:

·         Equalize the profit of investor owned Short Term Rentals to that of Long Term Rentals (detailed analysis attached).  This would be achieved if alimit of 179 days per year were in place.  This eliminates the profit motivation for converting LTR to STR.  Setup costs further reduce the conversion rate.

·         If the 308 current Boulder listings on VRBO.com were to rent 179 days/year, pay a 10% tax on such rentals at the mean rate per night found in our data, the tax revenue for the year would be $1,112,000.

·         Require owners to have their license number listed on their online posting – aids in enforcement.

·         Institute appropriate data collection in the first year to validate the compliance, tax revenue and owner profit – adjust the ordinance as needed. In this scenario, the average STR operator would make no more profit than an LTR operator. This would eliminate the profit motivator for converting a long term residence to a short term rental.  An annual license fee that supports the costs of enforcement would make the program budget neutral.  This fee would be outside of the accommodation tax.  If 300 STR owners paid a $200 license fee/year, that would be $60k for enforcement, $500/license would be $150k.  All of these suggestions would be in addition to the other provisions previously recommended in the alternate ordinance.

In summary, the above ideas represent a fair, self funded approach that stands to help create affordable housing and increase the options for property owners who reside in Boulder. 

I  believe that if one owned a property in a town where the STR regulation discussion is taking place, considered the views of all sides, one can agree this approach would be a fair one that protects/benefits the community.  >From a personal perspective, I'd like to have the option to use STR the next time I find an extended vacancy in my current LTR.  
I look forward to further discussion on this topic and hope to have additional time with you individually to review the details of this analysis and challenge the assumptions therein.  I will also make available the detailed worksheet including the calculations, assumptions and other items
 that went into it.  Thanks again for your time and service to our city.

End forwarded email #1 and begin forwarded email #2:
Hello Council,
 
Based on a conversation I had with Mary, I wanted to provide you with a quick plot of the seasonal effects on the STR sample population that I sent to you previously.  A quick review shows:
 
1.  STR's vary over the year from a low of 5.6 nights/month to a high of 16.5 with a mean of 11.1 nights/month.  One other observation is that some owners don't rent at all during the winter.  At least one property in the sample set rented 30+ days in the winter, thus those data points were excluded.
 
2.  STR rates vary with the season as well.  We saw a low rate of $114/night in Jan and a high of $235/night in May(makes sense with CU graduation).  $165/night was the annual average.  
 
This was based on the 17 samples of STR profit and loss statements analyzed to find where they were equivalent to LTR.  
 
Please let me know if there are questions, or if you'd like to see additional details.
 
Sam Weaver
Member of Boulder City Council
weavers at bouldercolorado.gov
Phone: 303-416-6130
 
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