Short Term Rental Regulations
BUYERS;
New short term rental regulations have had a huge impact on our real estate market. If you are looking to get a property in the mountains that you can short term rent it’s CRUNCH TIME. Licenses in areas where they are currently available but subject to a cap will soon be running out. Needless to say where there are waitlists they are already lengthy. Places that have unlimited access to STR licenses are seeing strong price increases. Now is way better than later.
At a recent forum of local Towns & County Managers sponsored by our Realtor Board the obvious theme from the panel was that they are very proud of the new regulations. This is not a local theme but a national issue.
In an NBC news article; The throngs of remote workers who flocked to rural communities throughout the pandemic have begun to thin as employers push a return to offices. But for many of the towns remote workers descended on, the housing crisis they fueled has remained. “The people can’t find housing, and I’m not talking about affordable housing. I’m saying they can’t find housing at all,” said Barbara Bruno, the mayor of Springdale, Utah. “Even if they can afford to buy something, there’s nothing to buy. It’s really that dire.” That rise has been driven by out-of-staters buying second homes, investors and the conversion of long-term rentals to Airbnbs and other types of short-term rentals, said Bruno.
Goldman Sachs reported recently;
“Instead of U.S. home prices falling 6.1% in 2023, which was their Jan. 10 prediction, researchers at the investment bank now expect national home prices to end 2023 down just 2.6%. By the time U.S. home prices bottom out this summer, Goldman Sachs says national home prices will be down around 6% from its June 2022 peak then rising toward the end of the year.” It seems the housing crash was a mirage.
Needless to say the regulations will not be going anywhere soon so we need to work with them. Here’s a break down:
Breckenridge; The town has established zones with caps on percentages of properties allowed to have licenses in each zone. The resort zone is 100% unrestricted so properties purchased here can immediately receive a short term license. The resort zone is very limited. Zone 1 has about 400 licenses available. Other zones have waitlists stretching from many months to many years and getting longer not shorter. Breck STR
Blue River; The town has not put any limits on STR’s yet but when the percentage of homes with licenses reaches 28% they will take another look and probably discuss implementing caps. I anticipate this happening by fall. Blue River STR
Frisco; Has an established cap. At this point there are only a few remaining licenses before they hit the cap. Frisco STR
Dillon; The one place that is proud of not putting caps on STR’s and is encouraging more STR’s and more visitors. Dillon STR
Silverthorne; Has established a cap on licenses with three zones. Zone 1 is running low but still available. Zone 2 anticipates several years of supply left. Silverthorne STR
Summit County; Finalized;
- The Resort Zone will allow for unlimited STR licenses. The Resort Zone includes Keystone, Copper Mountain, Tiger Run, and Ski watch and 4 O'Clock subs in Breck.
- The Neighborhood Zone includes all other areas in unincorporated Summit County. Caps are determined what Basin the County is in. It will likely be 5-10 years before new licenses are available, depending on the Basin. Once a property owner is able to obtain a license, they will be limited to 30 bookings per year. The length of the bookings will be up to the property owner to determine the usage.
- Local Exemptions. There will be exemptions for local property owners. Please review the ordinance for details.
- Summit County STR
Keystone and Copper Mountain; These are in the unincorporated county but exceptions to the above rules. These areas are completely unrestricted STR zones. Licenses are available now as well. One caveat, Keystone locals are trying to incorporate their area into a new town. Guaranteed since only locals can vote if they do incorporate they will institute limits on STR’s.
The Workaround; Rentals of 30 days or more are considered to be long term leases and are not limited by STR regulations. Many property managers are making this a specialty of their operations. Month or more rentals are increasingly popular since the COVID remote work became commonplace. You can possibly use this as your cash flow solution.