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Home My WebLink AboutInformation Only 102224AGENDA INFORMATION UPDATE October 22, 2024 5:00 PM, I.Information Update I.A Information Only Memorandum Response to Public Comment on STR Regulations 2024_10.9 STR Info-Only Memo.pdf 1 1 INFORMATION ONLY MEMORANDUM TO: Aspen City Council FROM: Emmy Oliver, Lodging & Commercial Core Program Manager THROUGH: Ben Anderson, Community Development Director MEMO DATE: October 22, 2024 RE: Short-Term Rental (STR) Program Response to Public Comment PURPOSE: This memorandum is for informational purposes only and is in response to public comments made by Ben Wolff of Frias Properties of Aspen and Snowmass during the September 10, 2024, City Council regular meeting. Should Council desire additional information, please discuss further with the City Manager. No action is requested of Council. SUMMARY: During the City Council regular meeting on September 10, 2024, Ben Wolff made public comment about the City’s STR regulations. Mr. Wolff’s comments focused on the caps on numbers of STR-Classic (STR-C) permits available for issue in certain zone districts. Mr. Wolff suggested that the caps and waitlists for permits are functioning as intended in the R-6 and R-15 zone districts. He then expressed concern about the caps and the number of permit requests on the waitlist for the R/MF zone district. He suggested that if the cap on permits were removed in the R/MF zone, there would be “no noticeable or negative impact” to members of the community. Mr. Wolff requested that Council consider whether caps on STR-C permits in the R/MF zone are “helping or hurting” the community. BACKGROUND: How and Why Caps Were Developed In December 2021, as a response to heightened community concerns over Aspen’s STR market and existing regulations, City Council adopted Ordinance #26, Series of 2021, which instituted a moratorium on the issuance of new STR permits. The moratorium 2 provided space for Council and staff to align the City’s policies with the development of updated regulations for STRs. Updated regulations were needed to support the operation of STRs in balance with community policies related to housing, development, growth management, and a sustainable economy as described in the Aspen Area Community Plan (AACP). During the moratorium, Council unanimously directed staff to propose caps on the number of STR-Classic (STR-C) permits in certain zone districts. Caps are a zoning- based method commonly used by municipalities to limit the number and distribution of STRs – in acknowledging existing conditions and desired future conditions. After researching best practices in comparable Mountain West communities, Council directed staff to proceed with a 75% cap on the number of existing STR-C permits in residential-serving zones. The 75% reduction in existing STR-C permits would, over time and through natural attrition, decrease the number of residential units with STR-C permits from 11% to 8%. This percentage decrease was aligned with the values and goals in the AACP, and with the direction of the Council. In June 2022, Council unanimously adopted Ordinance #09, Series of 2022. Among the new life safety, operational, and financial requirements for STRs, Ordinance #09 codified caps on the number of available STR-C permits in 14 residential-serving zone districts. Ordinance #09 also included language for “grandfathering” the pre-existing STR permits into the program, stating that “The number of Short-term Rental-Classic (STR-C) permits as of January 1, 2023, may exceed the cap for zone districts… until such time as they are revoked, abandoned, or otherwise eliminated.” Current STR-C Waitlist Information As Mr. Wolff stated, the caps in R-15 and R-6 zone districts are currently achieving the Council’s goal of reducing the overall number of STRs in those zones. Attrition of permits is occurring, and waitlisted applicants have been offered permits as they have become available. More broadly, the number of STR-C permits is at or below the caps in 11 of the 14 capped zone districts. In the R/MF, R-30, and SCI zones, the numbers of existing permits still exceed the caps for those zones codified in Ordinance #09, and the caps have yet to be achieved through the natural attrition of permits. In R-30, six (6) permits must be abandoned before the first of the two (2) current waitlist applicants could be offered a permit. In SCI, five (5) permits must be abandoned before the cap is reached, and there are no applicants on a waitlist for this zone. In R/MF, due to the large number of active permits grandfathered in by Ordinance #09, twenty-one (21) permits must be abandoned before the applicant in the top position on the forty-applicant waitlist could receive a permit. 3 Attrition of permits is occurring in the R/MF, R-30 and SCI zones, albeit more slowly than in others. Since May 2023, nineteen (19) permits have been abandoned in R/MF (1.1/month), and one (1) permit has been abandoned in both R-30 and SCI. Existing permits may be abandoned by customers if a renewal application is not submitted in a timely fashion and the permit expires, or in the event of the transfer of ownership of a permitted property, or if a customer chooses to voluntarily relinquish their permit. While the council’s policy objectives for limiting STR-C permits have not yet been fully realized due to the number of permits that pre-dated the 2022 regulations in certain zones, it should be noted that in nearly 80% of capped zones, the regulations are currently achieving the Council’s desired effect. If the trend of permit attrition in the R/MF zone continues as our limited historical data indicates, the first applicant on the waitlist in the R/MF zone may receive a permit offer as early as May 2026. Waitlist times are difficult to predict, however, due to the variety of participant behaviors that result in permit abandonment. If Council’s policy on caps for STR-C permits has changed, and the Council desires to revisit the caps on STR-C permits in R/MF or any other zone district, an amendment to the land use code and the necessary process would be required. Complaint Data Twenty-one (21) formal STR complaints have been submitted through Aspen 311 Connect since the STR Program inception in 2022. Of those complaints, two (2) were made for properties in the R/MF zone district. One complaint was alleged use of a property for STR purposes without a permit, and the other complaint was alleged falsification of STR-OO permit application information to obtain a permit. No reports of renter misconduct have been filed for properties in the R/MF zone. Spot Zoning Information Mr. Wolff also mentioned that some multi-family properties within the R/MF zone district may be interested in requesting a re-zoning of their buildings. A likely reason for this request would be because properties within zoning overlays, such as Lodge Overlay (LP) and Lodge Preservation Overlay (LO), are not subject to caps on STR-C permits. There are several historic lodge properties within the R/MF zone district that have LP and LO zoning overlays. Overlays were extended to those properties in the past to set them up for long term viability as historic lodge properties in a zone that otherwise would not allow them. The overlays also prevented the properties from becoming permanent nonconformities. LP and LO zone overlays are not intended for properties that were not historically used as lodges. 4 CONCLUSION While it is certainly at the discretion of the Council to answer the question of whether caps on STR-C permits are “hurting or helping” the community, staff would encourage Council to consider that caps were designed to limit the overall numbers of STRs in the community, and were borne out of a belief that this particular land use was under regulated and producing effects inconsistent with the City’s policy goals. UPCOMING DISCUSSION ON STRs Update to STR Program Guidelines As the program has progressed, the need for additions and updates to the STR Program Guidelines has become evident. The STR Program Guidelines is the companion document to the regulations codified in the Land Use Code. The Guidelines are written for STR owners and operators and informs customer participation in the program. No policy changes have been made in the proposed updates, but instead, the updates improve clarity and better respond to regular questions about how the program functions. This Council should expect to see a Resolution to amend the Guidelines in November 2024. Program Data Analysis and Discussion Additionally, as soon as is possible in Q1 of 2025, with the conclusion of the permit renewal process and another year of permit data to present, staff will return to Council for a work session discussion about our experience with the STR program to date. NEXT STEPS: No action is requested of Council. ATTACHMENTS: None. CITY MANAGER NOTES: Please contact the City Manager if there are questions or follow-up needed regarding the information provided. 5