Breckenridge adopts new regulatory short-term rental fee on first reading in split vote

Main Street Breckenridge is occupied by residents and visitors on September 5, Labor Day weekend. Breckenridge City Council passed a new accommodation unit charge on first reading to benefit housing programs that support the local workforce.
Liz Copan / For the Daily News Summit

On Tuesday, November 9, Breckenridge City Council voted 5-2 at first reading to approve an ordinance that would create new regulatory fees for all accommodation unit licensees, with some changes coming for second reading .

As written in the advice package, the ordinance adds a fee of $ 756 per studio or room that would be paid along with the annual license fee. The fee would replace the current administrative fee for short-term rentals and would include accommodation properties previously exempt from administrative fees, i.e. those that have a telephone, reception and service. 24 hour security. However, charges would not apply to lodges, eight of which are licensed at Breckenridge.

The city hopes to use the fee money to cover the direct and indirect costs of mitigating the negative impacts of short-term rentals on the community, including the relocation of labor force housing, pressure on housing. City infrastructure and resources and the guest experience at Breckenridge. City staff said the fee would benefit short-term rental licensees by supporting employees who provide customer service throughout the city.

“These are usually lower paying jobs, and the reality is you probably couldn’t pay people enough money to still afford a unit at market rate in this community,” the manager said. General Rick Holman on workers in the service sector.

The city worked with Economic & Planning Systems, a consultant specializing in housing policies and real estate economics, to draft the ordinance and set the fee, and representatives Brian Duffany and Andrew Knudtsen joined the meeting. virtually to talk to the board about dealing with it. The consultants carried out a study comparing short-term rental properties and housing in the city.

“Much of the city’s economy depends on guests and tourists, and… when they stay in a short-term rental, they spend money in the local economy,” Duffany said. “It supports jobs in sectors that tend to be low-paying: retail, food and drink, recreation and services. Local businesses support employment; jobs must be accommodated.

Duffany said based on a 2019 needs assessment survey, around 14% of Breckenridge employees had been affected by short-term rentals.

He said the fee calculation was based on a gap analysis, comparing what workers earn against the cost of housing. The charge is based on the difference between the impact of a short-term rental unit versus if the unit was occupied year round by a local resident.

The city hopes the new fees will be implemented by the start of the new year, but some council members were concerned about imposing the new fees on the accommodation community with such a quick deadline.

“I fully agree with this study and the charges,” said board member Dick Carleton. “… I think that’s what we need to do. … However, I want to work with the short term accommodation community, as I understand they have set rates for this winter. So here we are charging a significant increase in fees – even though we’ve talked about it at almost every meeting telling them that it happens, it’s still a big change – and they don’t have the option to reflect that in. their price. “

In an effort to gradually introduce fees, most board members agreed that it would be best to start with a lower fee this year, as most people in accommodation have already set their rates for the year to year. to come. The wording of the order will be changed for second reading to describe the fee as “up to $ 756”, and the board has agreed to start the fee at $ 400 per studio or room in 2022.

Council will then consider whether it wants to increase the fee to $ 756 for 2023 when the city begins its annual budgeting process next fall.

Council members Dennis Kuhn and Carol Saade voted ‘no’ on first reading because they both want to use the new short-term rental advisory working group that is looking at areas of tourist overlay or areas that could potentially be exempt from the license cap. . They stressed that the advisory board includes experts in all matters of accommodation and that they want to use the group as a resource before making a decision.

“I really believe that we have to listen to them first and then make our decision,” Kuhn said.

The rest of the board agreed they wanted the task force to review the ordinance, but wanted to vote at first reading to move the process forward in time for the start of 2022, as fee income is needed to alleviate the shortage. of housing in the city.

Board member Jeffrey Bergeron said he thought the fees made sense, but would like an exemption for locals who rent their homes a few nights a year at Christmas to defray the costs. The rest of the board were on the same page but also wanted feedback from the exemptions advisory working group. Council was generally comfortable with an exemption for people who rent less than three weeks per year and people who rent out their primary residence.

Bob Barto, general manager of Beaver Run Resort, said in public comments that his company has been doing the same for the 30 years he has worked with them and has not gained or lost units during that time. He said that before Beaver Run was built, the company was to build a 35-room apartment complex for its employees and that the owners association had purchased more units since then, housing around 90 of its own. employed on a seasonal basis.

“Beaver Run has been a strong supporter of the community for all of these years,” Barto said. “… We have been innovative, forward thinking, offering our own housing instead of relying on the city to build it. We’ve been doing the right thing for our people from day one. … We have paid our own way for 30 years. Why do we now have to pay for others? We encourage the board to offer incentives to companies that have done the right thing rather than penalties. “

Several board members said Barto’s points resonated with them.

“Bob is one of the few who has provided this level of employee housing, so if there is at least a way to honor that, I think it would be something worth considering,” said Mayor Eric Mamula. “And I would like the advisory committee to look at this.”

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