A recent unbiased study commissioned by the Western Mountain Resort Alliance (WMRA), with financial support from the National Association of REALTORS®, and conducted by RRC Associates and Inntopia, has shed light on the positive economic and social impacts of short-term rentals (STRs) in Pitkin County, Colorado. The study underscores the important role STRs play in supporting local economies, creating jobs, and providing diversified accommodation options for visitors to the region.

Key Findings:

• Economic Engine: STRs contribute significantly to local economies, generating millions in tax revenue and supporting thousands of jobs. The study estimates that STRs in Pitkin County generated over $553 million in economic output in 2022, directly supporting 2,480 jobs.
• Diverse Traveler Preferences: Accounting for 50% of Pitkin County’s rental lodging revenues in 2022, STRs provide flexible and varied accommodation options, catering to a wider range of traveler preferences and budgets than traditional hotels. This diversity benefits both visitors and local businesses, ensuring a strong and sustainable tourism industry.
• Housing Market: The study found that STRs were unlikely to be a major cause of increased housing prices in 2018-2022. Additionally, STRs generate considerable amounts of funding to affordable housing efforts in Pitkin County.
• Community Preservation: With responsible property management practices, STRs can positively impact neighborhoods and communities.

The study highlights the importance of crafting regulations that strike a balance between the interests of property owners, residents, and visitors to promote a sustainable tourism model that benefits all parties.

WMRA President Scott Blackwood stated, “This study demonstrates the undeniable benefits short-term rentals bring to Pitkin County. We believe that well-crafted regulations can foster a thriving STR market while addressing community concerns."

Data Shows Short Term Rentals (STRs) on the Decline in Aspen

As first reported in the Aspen Daily News, recently enacted caps on certain short-term rentals in residential areas have created a backlog of applicants seeking to open new STRs on their properties. The number of waitlisted applicants unable to immediately acquire permits is roughly equal to the decline in Aspen’s STR units between 2023 and 2024.

According to city data produced in a memo this week, the number of Aspen’s short-term rentals — housing units rented for periods of under 30 days, often through services like AirBnB or Vrbo — dropped by 53 units between 2023 and 2024. The number represents active business licenses granted for individual units operating as STRs within city limits. Meanwhile, the number of applicants waiting to receive capped STR permits is 48. Each capped STR permit, like each business license, corresponds to one unit. By keeping those 48 applicants on the waitlist, the city has kept new STRs from replacing old ones as they drop off.

This dynamic reflects the stated goals of the city’s cap policy, which explicitly aims to reduce non-owner-occupied STRs in residential areas by 25% over the coming years. The April 2022 ordinance that created the cap states that STRs limit housing availability for full-time residents and erode neighborhood character. At the time the ordinance was passed, the city was experiencing a spike in STR activity corresponding with the COVID-19 pandemic, with the city stating in a presentation that 16% of Aspen’s existing housing stock was functioning as STRs.

The cap policy specifically limits STRs whose owners live outside their units for most, or all, of the year. The so-called “classic” permits for this kind of unit are capped at different levels throughout 14 residential zones. Other STRs, such as those operated by hotels or lodges and those in units where the owners are full-time residents, are also not capped.

Before this policy, STR operators acquired “Vacation Rental Permits,” which were grandfathered into the new STR permit program. As the number of grandfathered and new permits exceeds the caps in some zones, the city cannot begin issuing new permits in those zones until the number of existing permits drops down below the cap (this occurs as owners abandon the permits for various reasons). In the meantime, applicants for new permits build up on waitlists.

A city memo distributed to council states that at their current rate of abandonment, it could be two years before the first applicant on the longest waitlist, which currently sits at 37 people, gets a shot at acquiring a new permit. Applicants now entering the end of the list have heard from city staff that their wait might last 10 years.

Staff also recognized in the information memo that another new city policy — an STR excise tax imposed in 2023 — could be stifling demand for STRs. The tax runs as high as 10% on nightly stays at STRs with classic permits (5% for owner-occupied and lodge-operated STRs).

CAR Opposes 1300 Home Sale Wildfire Mitigation Requirements

HB 1300 would require wildfire mitigation inspection and compliance at the point of sale for existing residences in 12 specific counties. The mitigation standards are to be based on the Colorado State Forest Service’s best mitigation practices. A certification of compliance form would need to be completed by an authorized inspector, copied to the homeowner, and filed with the county to be documented as part of the real estate closing.

CAR is opposing the bill because it is an unfunded mandate that complicates the home buying process at a time of record low inventory, high interest rates, and volatile property insurance markets while at the same time increasing the cost of housing. Notably, achieving adopted wildfire mitigation standards does not guarantee property insurance coverage or eliminate the possibility of being uninsured. If one property achieves full compliance, but surrounding properties cannot do the same, then property insurance can still be denied due to wildfire risk.

The bill received a committee hearing in the House Transportation, Housing, and Local Government Committee on Tuesday, March 5^th, but has been held over (neither passed or failed in committee). CAR Government Affairs testified in opposition to the bill to inform state legislators of the unintended consequences the bill will have on Colorado’s home supply. Further amendments have been offered to the bill, but they still do not change the CAR position. Watch CAR’s Capitol Connection that comes to members on Mondays for additional updates on this bill.

NAR’s Recent Meeting With Dept Of Labor; Final Rule Is Effective

The U.S. Department of Labor's (DOL) final rule regarding how workers are classified under the Fair Labor Standards Act (FLSA) becomes effective today, March 11, 2024. This final rule was issued in January 2024, and now will go into effect. Last week, NAR met with officials at the U.S. Department of Labor’s Wage and Hour Division to discuss the recent rule and its impact on the real estate industry. The meeting focused on the rule’s adoption of the economic realities test, and how the test could impact how real estate professionals are classified. NAR also expressed concerns regarding the preemptive effect of the federal rule and how it may impact state worker classification laws.

NAR will continue to advocate on worker classification matters and to ensure that real estate professionals retain the ability to be classified as real estate professionals. NAR will continue to provide key updates regarding this matter.

NAR Submits Comments to Veterans Affairs on Allowable Fees

NAR submitted a letter to the Department of Veterans Affairs (VA), urging the agency to revise its policies pertaining to fees veterans cannot pay when using their VA home loan benefit. Under VA policies, veterans using the home loan benefit are prohibited from compensating their professional representative directly. This puts VA buyers at a disadvantage in situations where offers of compensation are not offered from a seller, potentially forcing them to forego professional representation, choose a different loan product, or exit the market entirely.

NAR wants to ensure veterans maintain their access to the VA home loan program, which has been a significant tool in helping service members achieve the American dream of homeownership. NAR remains committed to working with the department to create solutions for those who served our country.

NAR Meets with DOL on Fair Labor Standards Act, Final Rule is Effective

The U.S. Department of Labor's (DOL) final rule regarding how workers are classified under the Fair Labor Standards Act (FLSA) took effect on March 11, 2024. This final rule was issued in January 2024, and now will go into effect. Last week In March, NAR met with officials at the U.S. Department of Labor’s Wage and Hour Division to discuss the recent rule and its impact on the real estate industry.  The meeting focused on the rule’s adoption of the economic realities test, and how the test could impact how real estate professionals are classified. NAR also expressed concerns regarding the preemptive effect of the federal rule and how it may impact state worker classification laws.