Colorado’s Seething Short-Term Rental Hosts

Consider this a precursor for a larger story later, but as someone who tracks short-term rentals, I find the events unfolding in Colorado nail-biting. 

On one hand, you have Summit County set to extend its Lease to Locals program, aimed at converting short-term rentals into long-term housing, with hopes of keeping current tenants in place, subject to funding availability. That’s one of the multiple ways in which local governments have tried to stymie rent hikes and protect the interests of local residents. 

And on the other, its multiple vacation rental associations, which include property managers and host-homeowners, and they are preparing for a lengthy litigation battle against the county’s short-term rental ordinances. 

Let’s unpack this. 

Summit County in Colorado is among the mountainous regions of the state that witnessed the influx of highly-paid remote workers. They transformed these mountain suburbs into Zoomtowns, gradually pricing out the locals. According to the 2020 census data, apartment vacancies in Summit County was in the neighborhood of 58%. Three years hence, the median rent in Frisco, a ski town in the Breckenridge area, is $4,000 per month, 90% higher than the national average. 

The county has, for its part, tried many strategies to help the situation: Programs like Lease to Locals, and buy-down programs are some examples. For what it’s worth, Colorado Governor Jared Polis reportedly called these programs a “Band-Aid solution.” 

Restricting short-term rentals hasn’t seemed to help the housing crisis much either. The Colorado Property Owners for Property Rights( COPR), which is currently raising funds to litigate against the short-term rental ordinances in Breckenridge, claims that the town’s ordinances restrict 48%, or 7,713 residential properties, from being used as short-term rentals — that’s a lot of tax dollars left on the table.

And the way the current zoning ordinance is set up, in some zones, where short-term rentals are capped at 10% of the units, it might take up to 30 years to get a license. But COPR’s larger point is that the restriction protects large, corporate-owned lodging near the resort areas, where licenses are unrestricted.

Now, if you take all of this in the context of the real estate market, most homes in Breckenridge are netting negative returns for buyers/investors — some as much as -20%. Annual revenue, occupancy and average daily rates are all down in the single digits.

Can increased taxation help alleviate the housing crunch? Can developers build new homes fast enough to accommodate priced-out locals? Is there enough land with permits for new construction? Even if new buildings come, can buyers afford them?

I’ll be watching how this all unravels, especially how regulations impact and interact with the post-pandemic, normalizing market. 

Booking Partners With Fintech Company Affirm

Booking.com has partnered with Silicon Valley fintech firm Affirm Holdings to provide flexible payment options to consumers for travel bookings, to boost its transaction volumes.

The deal comes at an opportune time for the companies as demand for flexible payment options in travel booking is rapidly increasing. Affirm’s travel and ticketing purchase volume surged almost 50% year over year in the June quarter. The latest move expands Affirm’s payment options at checkout across multiple travel brands at Booking Holdings. The deal expands on existing alliances with Agoda, Kayak and Priceline.

Arizona Cities Unite to Gain Legislative Control

In more Arizona news…around 100 cities in the state, including several in northern Arizona, have joined a new initiative to enhance the regulation of short-term rentals. This proposal empowers local authorities to impose limits on the number of rentals allowed within city boundaries, Arizona Public Radio reported. The initiative is supported by the League of Arizona Cities and Towns, which comprises elected officials from 91 communities statewide.

City leaders see this as a way to prevent Airbnb-style businesses from occupying more homes in areas already grappling with housing shortages, like Sedona. These municipalities have committed to collaborate in advocating for the implementation of these regulations during the upcoming legislative session.

Kansas City Property Owners Miffed with Zoning Ordinance

The legal battle over short-term rentals in Kansas City, Missouri, unfolded before the city’s Board of Zoning Adjustment on Tuesday. Property owners and hosts expressed concerns about the fairness of the city’s approval process for short-term rental permits, KSHB reported.

Megan Duma, their attorney, questioned the rational basis for the city’s decisions, arguing that they appeared arbitrary, capricious and exclusionary. The group is urging the city to reverse permit denials, but the board postponed its decision until October. This delay poses a challenge for property owners who face a September 15 deadline where Airbnb would delist properties without permits.

Recommended Reading

Here’s some respite from the Airbnb-NYC news cycle. I was relieved and enjoyed reading this story on how these small rural town Airbnbs are less for tourists and more for seasonal workers. Airbnb will file this under “wins.”