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HomeMy WebLinkAboutagenda.council.worksession.20250825AGENDA CITY COUNCIL WORK SESSION August 25, 2025 4:00 PM, City Council Chambers 427 Rio Grande Place, Aspen I.Work Session I.A Short-term Rentals in the Residential/Multi-family Zone District Work Session I.B Water Treatment Facility Improvements Project and Water Fund Rates II.Council discussion of the items published in the most recent information update, as needed Zoom Meeting Instructions Join from PC, Mac, iPad, or Android: https://us06web.zoom.us/j/87180419266?pwd=hZtvlM0NvC70FNABK0SYNjgY5bNPeT.1 Passcode:81611 Join via audio: +1 346 248 7799 US Webinar ID: 871 8041 9266 Passcode: 81611 International numbers available: https://us06web.zoom.us/u/keiQeOSXTm Memo_STRs in RMF Zone District.pdf Exhibit A_Ordinance 026 Series of 2021.pdf Exhibit B_Ordinance 09 Series of 2022.pdf Exhibit C_Resolution 106 Series of 2022.pdf Exhibit D_Resolution 137 Series of 2024.pdf Exhibit E_Staff Memo_February 24, 2025.pdf Exhibit F_Resolution 077 Series of 2025.pdf Exhibit G_Staff Memo_April 11, 2022.pdf Exhibit H_Maps of Waitlisted Properties in RMF Zone District.pdf Exhibit I_Map of RMF Zone District.pdf Council_Memo_Water_Fund_Work_Session.docx 1 1 1 MEMORANDUM TO: Mayor Rachael Richards and Aspen City Council FROM: Emmy Oliver, Lodging and Commercial Core Program Manager Haley Hart, Senior Long-Range Planner THROUGH: Ben Anderson, Community Development Director MEMO DATE: August 18, 2025 MEETING DATE: August 25, 2025 RE: City Council Work Session Short-term Rentals in the Residential/Multi-Family Zone District REQUEST OF COUNCIL: The aim of this work session is to review data and address Council's questions regarding short- term rentals (STR) in the Residential/Multi-Family (R/MF) zone district. Staff seeks Council direction on any policy changes or code amendments desired by the Council. SUMMARY AND BACKGROUND: STR Program milestones from 2021 to current include: • Ordinance #026, Series of 2021: Established moratorium that allowed for the development of comprehensive STR regulations (Exhibit A) • Ordinance #09, Series of 2022: Established STR permit types, caps, waitlists, permitting and operational requirements, and fee structure (Exhibit B) • Resolution #106, Series of 2022: Adopted ballot measure for establishing excise taxes on STRs; the measure was voter certified in November 2022 (Exhibit C) • Resolution #137, Series of 2024: Adopted administrative amendments to STR Program Guidelines (Exhibit D) At a work session on February 24, 2025, staff presented seven STR topics that were requested for discussion by Council and the community (Exhibit E). Council directed staff to proceed with code amendment proposals for six of the topics, and to return for further discussion and direction on the seventh topic, that of caps on STR-Classic (STR-C) permits in the R/MF zone district. On June 24, 2025, by a 5-0 vote, Council approved Resolution #077, Series of 2025, initiating the Land Use Code amendment process for the STR topics (Exhibit F). All seven topics discussed at the February 2025 work session were included in the Resolution, with the acknowledgement that staff still required Council’s input on the R/MF topic. The purpose of the August 25, 2025 work session is to discuss policy specifically related to STRs in the R/MF zone district, respond to Council’s previous questions on the topic, and receive direction on Council’s desire to move forward with any STR policy changes for the R/MF zone. 2 2 Why and How Caps were Developed To effectively frame this subject, it’s necessary to add context around the creation of the caps during the development of STR regulations. Throughout the moratorium effected by Ordinance #026, Councilors affirmed their desire to “cap,” or limit, the number of STR-C permits in residential zone districts, and to exempt properties in the Commercial and Lodging zone districts from those caps. Caps are a tool utilized by many municipalities throughout the mountain west to geographically limit STRs. Caps were favored by Council for the following policy outcomes: • Protect the character of residential neighborhoods by limiting the total number of STRs in certain zone districts. • Concentrate STRs in zone districts served by transit and with nearby commercial uses. • Support the lodging bed base by continuing to permit STRs in residential zones. • Reduce the impact of STRs in neighborhoods and the community. To arrive at the appropriate cap amounts, Council compared the total number of residential units to the number of existing STR permits within Aspen’s residential zones, and analyzed four potential cap scenarios: 25%, 50%, 75%, and 100% of current STR permits. After evaluating these options—and supported by extensive stakeholder and public engagement—Council set caps for all fourteen residential zone districts at 75% of the number of existing permits. This amount was thought to strike a balance between continuing to allow STRs to support Aspen’s bed base while reducing the overall number of permits over time in response to resident sentiment. At that time, there were 254 existing STR permits issued to properties in the R/MF zone. The cap for the R/MF zone district was accordingly set at 190 permits, or 75% of the 254 existing permits (Figure A). The caps were intended to achieve a 25% reduction in the existing number of permits. R/MF Zone Total Residential Units 1,413 residential units Existing STRs 254 (18% of res. units) 75% of existing STRs 190 (13% of res. units) 50% of existing STRs 127 (9% of res. units) 25% of existing STRs 63 (4% of res. units) Staff Recommendation 75%/190 STRs Figure A: Staff Analysis of Cap Options for R/MF Zone; May 2, 2022 Staff Memo Additional Considerations Were Made for R/MF As Council was considering how to create caps in residential zone districts, they were also considering whether to treat R/MF differently from the other residential zones, given some of the defining factors for R/MF: • R/MF is a higher-density residential neighborhood adjacent to commercial and residential zones. • Several condo properties (known informally as “The Chateaus”) are in R/MF, and many of them have had significant STR activity for decades. 3 3 • R/MF had the highest number of active STR permits (254) of any residential zone. Council learned that the zoning allowances for R/MF, in addition to the scale of some of the existing multi-family buildings, made R/MF stand out as an important location for the potential development of future infill affordable housing development. It was also noted that the unlimited ability to short-term in R/MF had the potential to make the promotion of affordable housing development in that zone more challenging (Exhibit G). Council was presented with two options for R/MF: 1) Establish caps in R/MF to limit further market effect of STRs on property values and support Council goals around affordable housing, lived in community, and limiting impacts from STR activity. 2) Exempt R/MF from caps to allow unlimited STR use throughout, treating the zone more like the adjacent Lodging or Commercial Core zone districts. Despite its defining factors for location, multi-family developments, and active STR permits, Council determined that the R/MF zone district was first and foremost a residential area and chose to establish caps in the same manner as with Aspen’s other fourteen residential-serving zone districts. The current limitation on R/MF reflects that determination. Attrition as the Mechanism for Permit Reduction Council also had to determine how to allocate future STR permits if they were to approve caps in certain zone districts. Best practices in comparable communities showed that an effective method was to “grandperson” existing permits, which entailed both freezing the current number of permits in place, and adopting a cap for the future number of STRs in a zone district. The process of attrition would be used to reach the cap over time. Attrition of STR permits occurs in three ways: 1) When a property is sold, non-transferability regulations dictate that the permit is forfeited and subsequently eliminated. 2) A permit may be abandoned by a permittee, either by the choice to stop operating as an STR, or by the non-renewal of the permit during the annual permit renewal period. 3) A permit may be revoked by the City if a property has exceeded the number of allowable infractions. As attrition occurs in each zone district, the waitlist for that zone (if applicable) is used to allocate available permits to waitlisted applicants on a first come, first served basis. Attrition of STR permits allows for the following policy outcomes: • Supports cap regulations by reducing the number of permits over time. • Ensures a balance of land uses throughout zone districts. • Permits a fixed number of STRs to support the lodging bed base and tourist economy. • Reduces the influence of speculation in the residential real estate market. 4 4 CURRENT STR PROGRAM DATA: Active Permits and Permit Attrition in R/MF There are currently 191 active STR-C permits in R/MF. When one more permit is relinquished, the cap of 190 permits will be achieved. Once the number of active permits reaches 189, the application in the first position on the waitlist will be offered a permit. Figure B: Attrition of STR-C Permits in the R/MF Zone District, October 2022 - current Over the 34 months of program operation, a total of 62 STR-C permits have been eliminated in the R/MF zone district. Data from the three permit renewal cycles shows an average attrition rate of approximately 20 permits per year in R/MF. Attrition of permits in R/MF has occurred exclusively due to the following mechanisms: • Abandonment due to non-renewal of permits upon annual expiration, • Forfeiture upon sale of property, and • Forfeiture due to decision to cease renting on short-term basis. Approximately 70% of permit abandonments have resulted from expiration without renewal in R/MF. This annual decline is reflected in Figure B, where major dips in the trendline can be observed from November-February each year. Attrition also occurs throughout the calendar year as permittees notify the City of the need to forfeit their permit due to either property sale or the decision to stop renting. Waitlisted Applications in R/MF The City began accepting new STR permit applications in October 2022. Because there were 254 active permits in R/MF prior to the implementation of the cap, the total number of permits exceeded the newly established cap of 190 permits. All new applications for properties in the R/MF zone were placed on a waitlist. By December 2022, the waitlist in R/MF had swelled to 20 applications. Over the following 31 months, the R/MF waitlist increased to its current size of 54 applications. Figure C illustrates the growth of the R/MF waitlist from October 2022 to current. 185 195 205 215 225 235 245 255 # Active Permits (191)R/MF Permit Cap (190) 5 5 Figure C: R/MF Permit Waitlist from October 2022 through August 2025 The average R/MF waitlist time is 19.5 months and is influenced by the surge in applications in late 2022. Fourteen applicants have waited 34 months—the longest period—and another 14 joined the waitlist in 2025. A yearly breakdown of waitlist additions follows: • 20 applicants added in 2022 • 8 applicants added in 2023 • 12 applicants added in 2024 • 14 applicants added in 2025 Figure D: R/MF Waitlisted Applications according to Decade of Most Recent Ownership Change In Figure D, staff reviewed Pitkin County Assessor data for the last-recorded date of ownership transfer for 53 of the 54 properties on the R/MF waitlist (data was not available for one property). 58% of the properties reviewed are relatively new purchases, having documented ownership transfers in the last 5 years. Of this subset of properties, over half changed hands after October 2022, when the caps became effective. Thirty-six percent (36%) of the 53 properties reviewed have had the same owner(s) for 10 continuous years or more. 54 10 20 30 40 50 60 R/MF Waitlist Size (# Applications) 0 1 3 8 10 31 1979 or prior 1980-1989 1990-1999 2000-2009 2010-2019 2020-current Nu m b e r o f Ap p l i c a t i o n s Decade of Ownership Change 6 6 Figure E: Map of the R/MF Zone District with circled areas showing locations of waitlisted properties Figure E shows a map of Aspen, with the pockets of the R/MF zone district colored in teal. The three areas circled in red are where all properties on the R/MF waitlist are located. Most applications on the R/MF waitlist are for properties located to the east of Aspen’s core, within the largest circle at the right side of Figure E. The three maps in Exhibit H illustrate the locations of all 54 waitlisted properties: • 45 properties (83%) are located east of Aspen’s core • 6 properties (11%) are located just west of Aspen’s core • 3 properties (5%) are located near the “S curves” Aside from personal choice, nothing precludes owners of waitlisted properties from renting their properties on a long-term basis while on the waitlist for an STR-C permit. And if the property happens to be the primary residence of the owner, they could obtain a STR-Owner Occupied (STR-OO) permit. 22% of waitlisted applicants hold the following City rental licenses: • 6 properties hold active STR-OO permits which allow up to 120 nights/year of short-term rentals. • 6 properties hold long-term rental business licenses which allow unlimited long-term rentals. 7 7 Per Council’s request, staff also conducted a case study for the first 20 applications on the R/MF waitlist. This subset of property owners submitted STR-C permit applications in late 2022 and have been waiting for a permit for 33 months on average. Staff research revealed the following for the first 20 waitlisted applications: Location • 15 properties (75%) are located east of Spring St, • 3 properties (15%) are located to the west of the Commercial Core near Paepcke Park, • 2 properties (10%) are located in multi-family developments near the “S curves” Purchase History • 9 properties were purchased post-2020 • 5 properties were purchased in the 2010’s • 5 properties were purchased between 1990 and 2010 • 1 property did not have sale history STAFF DISCUSSION: During the February 2025 work session, Councilors posed a series of questions to staff about the STR program. Answers to those questions follow. Question 1: Removing or adjusting the cap may be appropriate in some, but not all, areas of the R/MF zone district. Are zones the best way to cap permits? Should we re-segment the R/MF zone? The R/MF zone district exists in multiple pockets across town, from the largest section east of the core along the Roaring Fork River, to smaller pockets outside the roundabout near Highlands, Truscott, and the AABC (EXHIBIT I). The intention of the different pockets of R/MF is to encase multi-family developments and essentially discourage future development of duplex and single- family homes in these areas. Staff’s research of Colorado Association of Ski Towns (CAST) communities using caps as a tool for limiting numbers of STRs indicates that zone districts are overwhelmingly the best practice for delineating different areas of towns intended for different cap numbers. To that end, in 2022 City Council approved zone districts as a very clear demarcated and codified set of pre-existing boundaries to differentiate where the boundaries for different caps would lie within the STR program. Aspen’s zone districts serve many purposes aside from delineating areas for STR caps. Zone districts give definition to the character of Aspen’s neighborhoods by informing property uses, of which short-term rentals are but one of many. They dictate density and intensity of use in an area, as well as property characteristics such as setbacks, height, and mass. Zone districts also ensure that uses throughout Aspen’s neighborhoods are compatible with the surrounding areas. Staff believes that re-segmenting any zone district to accommodate STR program cap preferences would undermine the basic intent of the land use code, which is used to regulate the entirety of the built environment, not just short-term rentals. The complexity of the re-zoning process, as well as the staff time and effort that would be required to complete an analysis to re- zone or “segment” some but not all of R/MF fairly and thoughtfully, are both massive, and would create potentially undesired consequences beyond the short-term rental realm. 8 8 Other ways that CAST communities are geographically limiting the number of STR permits include allowing one (1) permit per block face (Durango) and limiting each STR permit to within 250’ of other existing permits (Glenwood Springs). These methods for limiting STRs, while not nearly as common as zone districts, would likely be difficult to implement in Aspen due to the lack of uniformity in block sizes and the unique mixture of densities throughout the R/MF zone district. Question 2: What tax revenue are we missing by keeping the properties on a waitlist and not issuing permits or collecting taxes on those properties? To answer this question, staff used the STR excise tax data accumulated throughout 2024, the only full year the taxes have been effective. Staff multiplied the average monthly excise tax payment by the sum of the number of months that the 54 properties have been listed on the R/MF waiting list. Staff estimates that the City could potentially collect approximately $738,000 in STR excise tax revenue from the 54 applicants on the R/MF waitlist. Note that this figure could differ significantly based on nightly price, seasonal rental availability, current market trends in travel, and many other determining factors. It goes without saying that the more STR permits that become available, the more STR tax revenue Aspen would be able to collect as a municipality. It’s up to the Council to weigh the two interests and decide whether it’s more important to the community to collect additional revenue or to preserve the outcomes intended by current STR policies. Question 3: If the waitlist was removed, and we gave everyone permits, would it make a difference? Issuance of permits to the 54 applicants on the R/MF waitlist could lead to the following outcomes: 1. Creation of equity issues for applicants on waitlists in other zone districts (R-6, R-15, and R-30). 2. A 28% increase in the total number of existing permits, from 192 to 246. 3. Creation of additional wait time for future waitlist applicants in R/MF. 4. A 4% loss in the percentage of residential units potentially available for long-term rental use. 5. Increased occupancy of, and associated impacts from, STRs in a residential zone district. If Council desires to eliminate the current R/MF waitlist by issuing permits to all waitlisted applicants, staff recommends that the R/MF cap be adjusted to account for the additional issued permits. STAFF ANALYSIS: Council’s use of caps as a tool to limit the location and concentration of STR permits throughout Aspen is best practice in comparable communities that are regulating STRs in a meaningful way. Caps were created based heavily on community input, with over 700 total participants across surveys, interviews, advisory groups, and open houses providing suggestions for limiting STRs. Should Council consider making changes to caps for any zone district, staff recommends a significant public outreach effort in advance of those decisions. Zone districts are the most effective means at determining the boundaries of caps and at creating alignment between the intensity of uses in a neighborhood and the limits on the number of STR permits allowed. Changing zoning for STR purposes, whether through re-segmenting R/MF, or spot zoning to allow for increased allowances at certain locations, is not the best solution for the community and is process intensive and time consuming for staff. 9 9 It was well known at the time when Council approved the caps that attrition of permits in R/MF would take some time due to the large number of permits that pre-dated the caps. And though the long waitlist in R/MF has generated many inquiries from interested parties, it is important to note that it is serving its intended function: to be a waiting list for the next available permit. All property owners on STR waiting lists continue to have viable options for generating rental income, as they may offer their properties on a long-term basis while awaiting the issuance of STR permits. Aspen is among other CAST communities with waitlists for STR permits. The town of Breckenridge has waitlists in two of the town’s four zone districts, with a waitlist for one such zone consisting of 180 applicants as of June 2025. Durango also has waitlists in two zone districts, with more modest lengths of 26 and 11 applicants. Data shows that attrition of permits in R/MF is occurring, and that it’s happening steadily year over year. Over 60 permits have been abandoned in R/MF since 2023. Trends withstanding, the release of two more existing permits is likely to happen during the 2025-2026 permit renewal period. What is occurring in the R/MF zone district remains consistent with what was sought by Aspen’s residents and Council in 2022. The attrition and waitlist mechanisms were intentionally designed to achieve the outcomes being currently observed. In staff’s view, if we stay the course without altering waitlists, caps, or zone districts, it can be reasonably expected that permits are likely to become available in R/MF within the next year. While it’s difficult to predict the speed at which the entire waitlist would be eliminated, certainly once the existing permit number falls below the cap, one permit will be offered to a waitlist applicant for each permit that is abandoned. STAFF RECOMMENDATION: Staff recommends that Council make no changes to current STR policy for the R/MF zone district. Staff strongly recommends against any changes to the boundaries of the R/MF zone district or any other zone districts, or the application of zoning overlays on specific properties. If Council desires to respond to the waitlist circumstance by issuing permits to any number of the waitlisted applicants, staff would recommend adjusting the cap to mirror the increase in issued permits. In that instance, staff would also recommend soliciting robust public input regarding changes to caps as this policy is at the heart of the larger STR program. OPTIONS FOR COUNCIL: 1) Keep the R/MF permit cap at 190 and make no changes to the R/MF waitlist. Allow attrition of permits to continue occurring naturally. Continue to review data in 2026. Recommended. 2) Allocate permits to some or all applicants on the R/MF waitlist. Adjust the R/MF permit cap to account for the addition of new permits to the total. Not recommended. 3) Treat R/MF as a commercial/lodging zone and exempt the R/MF zone district from caps altogether. Not recommended. CONCLUSION AND NEXT STEPS: The first reading for the ordinance pursuing STR code amendments is scheduled for September 30, 2025. Staff is aiming to incorporate any potential changes desired by Council into the ordinance to accomplish all STR code amendments at once. Should the Council desire to make robust policy changes regarding the R/MF zone district or caps, these would likely require an ordinance and timeline distinct from what staff will present on September 30, 2025. 10 10 CITY MANAGER COMMENTS: EXHIBITS: Exhibit A - Ordinance #26, Series of 2021 Exhibit B - Ordinance #09, Series of 2022 Exhibit C - Resolution #106, Series of 2022 Exhibit D - Resolution #137, Series of 2024 Exhibit E - Staff Memo, February 24, 2025 Exhibit F - Resolution #077, Series of 2025 Exhibit G - Staff Memo, April 11, 2022 Exhibit H - Maps of Waitlisted Properties in R/MF Zone District Exhibit I - Map of R/MF Zone District 11 12 13 14 15 ORDINANCE NO.09 Series of 2022) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING THE VACATION RENTAL REGULATIONS IN THE CITY OF ASPEN LAND USE CODE. WHEREAS, the City of Aspen (the "City") is a legally and regularly created, established, organized and existing municipal corporation under the provisions of Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the "Charter"); and, WHEREAS, the City of Aspen currently regulates land uses within the City limits in accordance with Chapter 26.104 et seq. of the Aspen Municipal Code pursuant to its Home Rule Constitutional authority and the Local Government Land Use Control Enabling Act of 1974, as amended, §§29-20-101, et seq. C.R.S; and, WHEREAS, Aspen is a tourists destination, attracting tens of thousands of visitors a year in all seasons, visitors which require transient tourist accommodations and participate in and support Aspen's tourist economy; and, WHEREAS, a variety of tourist accommodations at varied sizes, quality, and price points is essential to supporting the City's tourist economy; and, WHEREAS, a tourist -based economy such as the City's requires a sufficient number of employees to provide the services required to serve such an economy. Without adequate workforce housing, a tourist -based economy cannot thrive; and, WHEREAS, to allow for a sufficient number of employees to be hired to provide the services necessary to sustain a tourist -based economy there must be an adequate supply of workforce housing; and, WHEREAS, historically, the long-term rental of residential property, or at least the long-term rental of space within a residential property, has been an important means for providing workforce housing within the City; and, WHEREAS, in addition to the required workforce housing, it is also essential to the continued vitality of the City's economy that adequate short-term housing be made available to the many tourists who visit the City each year; and, WHEREAS, short-term rentals are extremely valuable to the City's economy and exist in various locations throughout the City; and, WHEREAS, the operation of a short-term rental in the City is the operation of a business; and, Ordinance #09, Series of 2022 Short-term Rentals Page 1 of 14 16 WHEREAS, without regulations and limitations on their operation and extent, short- term rentals also have adverse impacts on the character of residential neighborhoods and the availability of long-term housing options; and, WHEREAS, tourists visitation, the operation of tourist accommodations, the goods and services demanded by tourists, and the transportation systems required to move tourist to and throughout the community have environmental impacts, measured as Greenhouse Gas Emissions; and, WHEREAS, in keeping with the goal of the City's Comprehensive Plan to preserve small town character while maintaining livability, the City desires to minimize the negative impacts of short-term rentals on Aspen's neighborhoods, housing supply, economy, and environment; and, WHEREAS, during the moratorium, adopted Ordinance No. 26, Series of 2021, City staff engaged in a robust public engagement process which included two online surveys regarding community perception of short-term rentals and feelings toward specific regulations; an open house at City Hall which included story boards and an opportunity for feedback; a public work session to discuss the online survey results and expand further into certain topic areas; and research into how other municipalities in Colorado regulate short-term rentals; and, WHEREAS, the Planning and Zoning Commission received and considered the information gathered through the public engagement process, as well as comments from the public, during a Meeting held on May 170', 2022, and voted 4 to 0 to recommend approval of Ordinance #09, Series of 2022 to City Council; and, WHEREAS, on December 12, 2021, City Council adopted Ordinance No. 26, Series of 2021 enacting a temporary moratorium in the issuance of new short-term rental permits until September 30, 2022; and, WHEREAS, at a regular meeting on May 24, 2022, City Council by a 5 to 0 vote, approved Ordinance #09, Series of 2022, approving at First Reading a Code Amendment to Vacation Rental Regulations; and, WHEREAS, at a regular meeting and properly noticed public hearing on June 28th, City Council by a 5 to 0 vote, approved Ordinance #09, Series of 2022 on Second Reading; and, WHEREAS, the Aspen City Council finds that this Ordinance furthers and is necessary for the promotion of public health, safety, and welfare; and, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, THAT: Section 1. Section 26.104.100 "Definitions shall" be amended as follows: Ordinance #09, Series of 2022 Short-term Rentals Page 2 of 14 17 Condo -hotel. A condo -hotel is a lodging property which meets the definition of Lodge in 26.104.110, Use Categories and in which ownership of individual lodge units has been condominiumized in accordance with The Colorado Condominium Ownership Act, C.R.S. § 38-33- 101, et. seq. Hotel. See definition of Lodge, 26.104.110 Use Categories. Motel. See definition of Lodge, 26.104.110 Use Categories. Natural Person. A living, individual human being, as distinct from a "legal person" for the purpose of assigning certain legal rights. Owner Occupied. A residential property that serves as the primary residence of the title owner of the property. Owner Occupant. For the purposes of permitting specific types of short-term rentals, owner - occupant is a natural person whose principal residence is the City of Aspen residential property or unit for which a short-term rental permit is sought. Pillow. A unit of measure for assessing affordable housing generation and occupancy of lodge rooms/units per bedroom in a short-term rental. Each lodge and short-term rental unit shall be considered to have two pillows for each bedroom. For calculating occupancy in short-term rentals, sleeper sofas, murphy beds, and similar sleeping accommodations shall be considered as two pillows. Studio units shall be considered to have two pillows. Primary residence. The permanent residential address, as demonstrated by acceptable legal documentation described in this title, of an Owner- Occupied Short-term Rental Permit holder. Qualified Owner's Representative. A natural person who is legally designated on the permit application by the permittee to apply for and maintain compliance with a City of Aspen Short-term Rental Permit. For each short-term rental property, there may be only one qualified owner's representative. All qualified owner's representatives must have a business license through the City of Aspen. Short-term Rental (STR). The use or occupancy of a residential property or dwelling unit, in whole or in part, by the general public for a fee, primarily for tourist accommodations, and for a period of less than 30 days. Timeshare, hotel, motel, and bed and breakfast uses are not short-term rental uses. Vacation Rental. See short-term rental. Section 2. Valid 2021-2022 Permits. 2021 Vacation Rental Permits (2021 VRP) issued pursuant to Section 26.575.020 "Vacation Rentals" on or prior to December 8th, 2021, shall be deemed to be valid 2022 STR Permits and shall be valid until December 31, 2022. Valid 2022 permits may be renewed annually thereafter, subject to the terms and conditions set forth in this chapter until they are abandoned or revoked in accordance with this chapter. Valid 2022 permits which are Ordinance #09, Series of 2022 Short-term Rentals Page 3 of 14 18 renewed after December 31, 2022, may not be transferred to owners or properties other than that listed on the 2022 STR permit. Upon renewal, 2022 STR permits issued to a corporation, partnership, association, or company must update the permit application information to comply with the requirements of Chapter 26.530. The number of Short-term Rental -Classic (STR-C) permits as of January 1, 2023, may exceed the cap for zone districts, as defined in Chapter 26.530, until such time as they are revoked, abandoned, or otherwise eliminated. Owner - occupied Short-term Rental Permits and Lodging Exempt Short-term Rental Permits may be issued with the requirements of Chapter 26.530 beginning October 1, 2022. Section 3. Section 26.575.220 "Vacation Rentals" shall be deleted in its entirety. Section 4. Chapter 26.530 "Reserved" shall be deleted in its entirety and replaced with the following: Chapter 26.530 Short-term Rental Regulations Sec.26.530.010 Purpose Sec.26.530.020 Applicability Sec. 26.530.030 Permitting Requirements Sec. 26.530.040 Permitting Procedures and Standards Sec. 26.530.050 Occupancy and Operational Standards Sec.26.530.060 Enforcement Sec.26.530.070 Fees Sec.26.530.080 Appeals 26.530.010 Purpose The purpose of this Chapter is to regulate short-term rentals (STRs) as a land use within the City of Aspen. STRs are an important component of the City's lodging bed base, support a vibrant tourist economy, and provide real property owners with STR permits significant financial benefit. STRs influence property value and occupancy patterns of residential dwelling units. STRs influence neighborhood character by introducing commercial lodging uses in residential neighborhoods. STRs require services and infrastructure to operate. STRs further reduce the potential availability of long-term rental housing to support the local economy and community. STRs require regulation as a distinct land use to ensure the health, safety, peace, and welfare of the community through the application of zoning police powers. The following regulations support the operation of STRs balanced with community policies related to housing, development, growth management, and a sustainable economy as described in the Aspen Area Community Plan. 26.530.020 Applicability A. This chapter applies to all STRs in the City of Aspen. STRs are required to obtain a permit in accordance with their type and operation as defined in this section. STRs operating without a permit are subject to enforcement as defined in Section 26.530.060 Enforcement. Ordinance #09, Series of 2022 Short-term Rentals Page 4 of 14 19 B. It shall be unlawful for any person, whether a principal or agent, clerk, or employee, either for him or herself, or for any other person for anybody, corporation or otherwise, to lease or operate an STR without first obtaining an STR permit in accordance with the provisions and procedures of this section. 26.530.030 Permitting Requirements A. Permits. Any property rented as an STR shall require a permit to operate. Permits shall be approved, approved with conditions, or denied by the Community Development Director based on the following criteria: 1) Permittee. Permits shall only be issued in the name of one natural person who has an ownership interest in the property for which the permit is issued ("Permittee"). 2) Permit Number. STR permits are issued a unique permit number. That permit number shall be clearly displayed in all advertising and listings of the STR, including but not limited to all digital and print advertising. The permit number must be listed in the STR, along with permittee and/or qualified owner's representative and emergency contact information as part of the in -unit Community Messaging Program described in the STR Program Guidelines. 3) Permit Application Contents. The following information is required for STR permit applications: the owner(s) of the property, the name and contact information of the proposed permittee; if title to the subject property is held by a corporation, partnership, association, or company, the name and contact information of any officer, director or stockholder holding ten percent (10%) or more of the interests in the corporation, partnership, association, or company; the property address, Pitkin County parcel identification number; Pitkin County owner name; number of bedrooms and pillows in the unit in its largest configuration; size of heated area of the STR residence, and all previous notices of code violations or complaints filed against the property. 4) Licensing. STRs are required to maintain a City of Aspen Business License and are required to remit lodging and sales tax in accordance with Municipal Code regulations and Finance department policies. The STR- Program Guidelines include details about licensing and tax compliance standards and procedures. 5) Non -Transferability. Commencing October 1, 2022, STR permits shall be granted only for the property for which it is issued and solely to the permittee to whom it is issued. The permit shall not be transferable to any other person, legal entity, or residential address. If the property is owned by a partnership, corporation, association or company, a transfer shall be deemed to occur if the permittee transfers his or her interest in the property to a third -party individual or entity or if more than ten percent (10%) of the partnership, corporation, association, or company is transferred to a third -party individual or entity, even if the permittee retains an ownership interest in the property. Upon such transfer of ownership, the permit shall be deemed terminated and revoked and the new Ordinance #09, Series of 2022 Short-term Rentals Page 5 of 14 20 owner of the property shall be required to apply for a new STR permit if it wishes to continue the use of the property as a vacation rental. The STR permit shall include a non - transferability clause and notice that the permit shall be deemed terminated and revoked automatically upon the sale or change of ownership of the property for which a permit has been issued, as described herein. B. Permit Types. STRs shall be eligible for one of three permit types: Short-term Rental Classic, Owner -Occupied Short-term Rental, or Lodging Exempt Short-term Rental. The ability to obtain an STR permit is conditioned upon the permittees consent of the eligibility, requirements, and standards for each permit type as follows: 1) Short-term Rental Classic (STR-C) — this permit is issued only to residential units located in eligible zones and the approved use of which is not a Lodge use. (Condo -hotel properties must apply for a Lodging -Exempt STR permit.) a. STR-C permits shall be renewed annually and are assessed an annual permit fee in accordance with Section 26.530.070 Fees. b. STR-C permits are subject to the life -safety standards and the operational standards described in this chapter and the STR Program Guidelines. c. There is no annual limit on the number of nights an STR-C permittee may operate the STR unit. Bedrooms, lock -offs, or portions of the residential unit, in addition to the whole residential unit, may be rented. Occupancy for the unit is limited by the standards described in Section 26.530.050. 2) Owner -occupied Short-term Rental (STR-00) — this permit is issued only to owner - occupied residential units, where the property is the primary residence of the permittee. Part 700 of this Title describes the zone districts where STRs are a permitted use. a. STR-00 rental permits shall be renewed annually and are assessed an annual permit fee in accordance with Section 26.530.070 Fees. b. STR-00 are subject to the life -safety standards for STRs described in this chapter and the Program Guidelines, and who must have two (2) of the following valid documents indicating that the STR is the applicant's primary residence: i. valid Colorado driver's license; ii. valid motor vehicle registration; iii. voter registration; iv. Federal or state tax return; or, V. other legal documentation deemed sufficient by the Community Development Director which is pertinent toward establishing principal residence. 3) Lodging Exempt Short-term Rental (STR-LE) — Lodges and condo -hotels which meet the definition of Lodge are eligible for STR-LE permits. a. For eligible properties, only one permit is required for all units under management. b. In addition to the limitations of the definition of Lodge and/or Condo - hotel, Lodging Exempt eligible properties must offer STR units under a Ordinance #09, Series of 2022 Short-term Rentals Page 6 of 14 21 unified brand and marketing model where individual ownership of units is secondary to the central brand of the property. c. Lodging Exempt permittees must submit an affidavit attesting to their eligibility. d. STR-LE permits must be renewed annually and are assessed an annual permit fee in accordance with Section 26.530.070 Fees. To ensure ongoing eligibility for the STR-LE permit, permittees are subject to the Lodging Occupancy Auditing regulations in Section 26.575.210. C. Zoning Limitations. STR-C permits are limited by number in residential zone districts. Refer to Part 700 of this title for permitted uses by zone to assess where STR-Cs are permitted. In zones where STR is not a permitted use, it is a prohibited use. 1) STR-C permits are limited by number in specific zone districts as follows: a. RR: 2 permits; b. R-3: 1 permit; c. R-6: 81 permits; d. R-15: 47 permits; e. R-15A: 8 permits; f. R-1513: 12 permits; g. R-30: 1 permit; h. R/MF: 190 permits; i. R/MFA: 12 permits; j. AH: 9 permits; k. MU: 39 permits; 1. NC: 1 permit; m. SCI: 2 permits; n. SKI: 2 permits. 2) There is no limit to the number of STR-C permits in the following zone districts: Commercial (C-1), Commercial Core (CC), Lodge (L), Commercial Lodge (CL), Lodge Overlay (LP), Lodge Preservation Overlay (LO). 3) STR-00 are not limited by number in any allowable zone district. Refer to Part 700 of this title for zone districts where STR is a permitted use. 4) STR-LE are not limited by number in any allowable zone district. Refer to Part 700 of this title for zone districts where STR is a permitted or prohibited use. 26.530.040 Permit Procedures and Standards. Prior to the issuance of an STR permit, the permit application will be reviewed for compliance with the following standards. A. Zoning Compliance. All STR permits must comply with zoning regulations for the zone district in which they are located. STR permit applications shall include the Parcel Identification Number and residential Ordinance #09, Series of 2022 Short-term Rentals Page 7 of 14 22 address including unit number for the property to ensure compliance with underlying zoning. Zone district STR regulations, including permitted uses and cap limitations, may change over time per City Council action. Possession of an STR permit does not supersede compliance with zone district STR regulations. B. Life -safety Compliance and Inspection. 1) Required Noticing. All new STR applicants shall comply with neighborhood noticing requirements per Section 26.304.060.E.3.b-c, Manner of Notice. 2) Inspections. By signing and submitting an STR permit application, and subsequently being granted a permit, the owner(s) of the property shall consent to inspections of the property by City of Aspen personnel and their agents for the purpose of determining compliance with City Codes, Regulations and Laws. No inspection will be made without first giving the permittee and, if applicable, the qualified owner's representative, 48 hours' notice of the inspection. 3) Life -Safety. STRs are required to comply with all applicable life -safety standards in Municipal Code Title 8 and the STR Program Guidelines, as amended from time to time. Life -safety standards including: fire suppression, occupancy limitations, mechanical codes, emergency contacts and procedures, and inspections. C. Qualified Owner's Representative. Permittees who cannot meet requirement for regulatory compliance, in -person service, emergency response and other regulations in this title may designate a qualified owner's representative. A qualified owner's representative shall be a natural person residing in the Roaring Fork River Drainage area situated in Eagle, Pitkin, Garfield or Gunnison Counties, or within the Colorado River Drainage area from and including the unincorporated No Name area to and including Rifle. The qualified owner's representative is designated by the permittee who is the property owner as the point of contact for the permitted STR. For permittees that designate a qualified owner's representative, the qualified owner's representative shall be responsible for responding to tenant and City inquiries, complaints, enforcement actions, and other on -site needs. 1) If a qualified owner's representative is designated for an STR, the qualified owner's representative must have a City of Aspen business license. The qualified owner's representative shall be listed on the STR permit for the property including the qualified owner's representative's name, entity or company name, telephone number, email address, and physical address. 2) STR permittees who designate a qualified owner's representative are liable for compliance with applicable Land Use Code and Municipal Code regulations. The qualified owner's representative is not legally liable for violations of this section or compliance with applicable Municipal Code regulations but is responsible for notifying the permittee when a violation has occurred. 3) The name, address, and telephone number(s) of the qualified owner's representative, as shown on the STR permit, shall be made available to the Community Development Ordinance #09, Series of 2022 Short-term Rentals Page 8 of 14 23 Department, the Aspen Police Department, and the Aspen Fire Protection District. Any change to the qualified owner's representative or permittees' contact information shall be promptly furnished to the City of Aspen via a revised STR permit application within ten 10) days. Failure of the permittee to provide or update the qualified owner's representative contact information to the City shall constitute an enforcement violation subject to actions and penalties as described in Section 26.530.070 Enforcement. 4) The permittee, or if designated, the qualified owner's representative, shall be available 24 hours a day, year-round to ensure that the property is maintained and operated as required by Land Use Code standards and the STR Program Guidelines. The permittee, or if designated, the qualified owner's representative, shall respond to service or compliance inquiries from occupants and City officials, and shall be available to be at the property within two (2) hours in an emergency. Failure of the permittee, or if designated, the qualified owner's representative, to respond to a call from a tenant or the Community Development Director within 24 hours shall result in an enforcement violation subject to actions and penalties as described in Section 26.530.070 Enforcement against the permittee. D. Permit Application, Fees, Issuance, Renewal, Revocation, and Abandonment. 1) Application. Permit applications shall be received and processed on a first come, first served basis. The Community Development Director shall deem applications complete based on the requirements of this Chapter and the standards in the STR Program Guidelines. Only complete STR permit applications shall be accepted and reviewed. 2) Fee Payment. Permit fees shall be remitted at the time of permit application and cover the cost of processing the application. Application fees are nonrefundable. 3) Neighborhood Noticing. Upon application for a new STR-C or STR-00 permit, the applicant shall provide neighborhood noticing in accordance with Section 26.304.060.E.3.b- c. Manner of Notice. Permit renewals do not require neighborhood noticing. Permits shall be approved, approved with conditions, or denied following the notice period. STR-LE are exempt from this provision. 4) HOA Compliance. Permit applications for residential properties which are in a Homeowners Association (HOA) must include HOA approval for the applicant to operate an STR in the form of a signed letter, including telephone and email contact information for the HOA, with the permit application. 5) Issuance. Permits shall be approved, approved with conditions, or denied within 21 working days of the closure of the notice period described above. The Community Development Director may issue permits with conditions based on review of the permit application and public comment. The review and issuance period for individual permit applications may be extended at the direction of the Community Development Director. 6) Waitlist. Once the permit limit is reached for each zone district, applicants will be placed on a waitlist for the next available permit in the order in which the application was received. Ordinance #09, Series of 2022 Short-term Rentals Page 9 of 14 24 A waitlist applicant shall be a natural person. The residential address included in the waitlist application must match the residential address for which the subsequent permit is issued. Applicants who sell the property for which the permit is sought shall be removed from the waitlist. As permits become available, waitlist applications shall be reviewed and approved, approved with conditions, or denied. If the property has been found in violation of this Chapter during the waitlist period, the application shall be denied. 7) Renewal. STR permits shall be renewed annually in accordance with the procedures in the STR Program Guidelines. Failure to renew a permit within fourteen days (14) of the permit expiration date shall result in the abandonment of the permit. 8) Tax Filing. STRs must be occupied by a short-term renter a minimum of once per year, as shown in tax filings to be eligible for renewal. Permits with one year of zero tax filings from the date of permit issuance or renewal will be considered abandoned and be processed in accordance with the standards in this chapter. 9) Abandonment. STR-C and STR-00 permits shall be valid for one year from the date of issuance and shall be renewed annually. Failure to renew a permit in accordance with the STR Program Guidelines will result in the abandonment of the permit. STR permits may be abandoned by perrnittees at any time by notifying the Community Development Director of the intent to abandon the permit. Abandoned permits will be made available to the next applicant on a first -come, first -served basis or the next applicant on the waitlist for that zone district in accordance with the STR Program Guidelines. STR-LE are exempt from this provision. 10) Revocation. STR permits may be revoked by the Community Development Director for any of the following reasons: three violations of the requirements of this chapter and applicable Municipal Code standards as described in the STR Program Guidelines, failure to rent the property during the term of the permit, failure to pay STR taxes and fees, or violations of the requirements of this section. 26.530.050 Occupancy and Operational Standards. Prior to the issuance of an STR permit, the permit application will be reviewed for compliance with the following standards. A. Occupancy Limits and Unit Size. STRs are limited to a total occupancy of two occupants per bedroom plus two additional occupants, studios are limited to a total occupancy of two occupants plus one additional occupant. Permit applications are required to list the number of bedrooms in the unit at its largest configuration. STRs may be inspected for accuracy of bedroom count on the permit application and for compliance with these occupancy requirements. For the purpose of establishing unit occupancy, a studio shall have an occupancy of two occupants plus one additional occupant. Occupancy for each STR shall be included in all STR advertising, the in - unit messaging, and permit on display in each permitted STR. Bedrooms, lock -offs, or portions of the residential unit, in addition to the whole residential unit, may be rented. Ordinance #09, Series of 2022 Short-term Rentals Page 10 of 14 25 B. Annual Rental Night Limits. STR-00 are limited to 120 short-term rental nights per year from the date of permit issuance. There is no annual limit on the number of nights per year an STR-C can be rented. There is no annual limit on the number of nights per year an STR-LE can be rented. C. Good Neighbor Guide. STRs are required to operate in accordance with all applicable Municipal Code regulations protecting the health, safety, and peace of the community and supporting the maintenance of community character and values. STR owners and permittees are required to assist STR occupants in being `good neighbors' by recognizing their obligation to following the rules and customs of the community. To support these community goals, the Community Development Department maintains the Short-term Rental Program Guidelines, Good Neighbor Guide, and collaborates with non -governmental organizations to promote good neighbor behavior by visitors. 1) STR-C and STR-00 permittees, and if designated, their qualified owner's representatives must comply with the policies described in the City of Aspen Good Neighbor Guide and provide that information at all times to occupants of the unit. 2) In -unit messaging is essential to assisting STR occupants in supporting the City's good neighbor policies, ensuring STRs in neighborhoods support community character, and assisting in the promotion of Aspen's community character. The following notices shall be posted in a conspicuous location inside the rental unit: i. A copy of the STR-C or STR-00 permit, ii. STR license and business number, iii. The name, address, and telephone number(s) of the permittee or qualified owner's representative, iv. A statement which reads: Occupants shall comply with the City's Noise Ordinance, V. The location of the required parking spaces, vi. Wildlife protection policy, vii. The location of the fire extinguisher, viii. Information on the trash, recycling, and composting programs including: a. Solid waste pickup schedules; b. Guidelines on living with wildlife and instructions for operating wildlife containers; and c. A notice that trash and recycling containers must be stored indoors except between 6:00 AM and 6:00 PM on the day of scheduled trash or recycling pickup, where they may be placed at the curbside or in alleys. ix. City of Aspen emergency services information and contact information, X. The City of Aspen's Good Neighbor Guide D. Adoption of and Compliance with STR Program Guidelines. The City Council hereby adopts the Short-term Rental Program Guidelines. The Community Development Department shall keep on file and make available to STR permittees, and if applicable, qualified owner's representatives. These guidelines set forth the standards, procedures, and supplemental information necessary for the operation of an STR within the City of Aspen. The Ordinance #09, Series of 2022 Short-term Rentals Page 11 of 14 26 Community Development Director may use the guidelines as a basis for enforcement actions in accordance with the requirements of this Chapter. The Guidelines may be updated, amended, and expanded from time to time by City Council Resolution. 26.530.060 Enforcement. The City of Aspen actively enforces its STR regulations through inspections, citizen complaints, audits, and permitting. These measures ensure that STRs reinforce, not undermine, community policies and character. Active enforcement ensures that visitors who choose to stay in STRs are informed of the unique qualities of mountain living and enhance our community culture by being good visitors and acting as neighbors and community members during their stay. STR permittee, and if applicable, qualified owner's representative, play an essential role in supporting and advancing these policies and supporting the City's enforcement activities. A. Complaints. Any valid complaint received regarding the STR property will first be referred to the permittee, and if applicable, qualified owner's representative for response and correction. The Community Development Director will follow up with any complaining party, the permittee, and if applicable, qualified owner's representative, for compliance or resolution. The permittee or qualified owner's representative must respond to all complaints or inquiries from City officials within 24 hours and occupant complaints within two (2) hours. The City of Aspen is not responsible for complaints against a HOA, hotel, or condo-hotel's own guidelines outside of the City's code, rules and regulations. Failure to respond within 24 hours shall result in a notice of violation and demand to cure. All valid complaints will be recorded and kept on -file including the address, permittee, permit number, business license number associated with the complaint, and the complainer's name and contact information. B. Enforcement and Penalties. Upon receipt of a compliant, the Community Development Department shall investigate and if it is determined there are grounds to believe a violation of this Chapter or any STR rules and regulations may have occurred, the Community Development Director may issue an Administrative Notice of Violation to the permittee. The Director shall revoke the STR permit of any permittee who receives three (3) Administrative Notices of Violation within the one (1) year permit cycle, effective upon mailing notice to the permittee's address on file. The permittee may appeal the decision to revoke the STR permit by providing notice of appeal to the Community Development Director within fourteen (14) days of the date of the decision to revoke the permit. The Administrative Hearing Officer shall hear appeals brought pursuant to this section (B). Appeals shall be governed by the procedures set forth in Section 26.316.030. 1) Penalty. Any permittee that violates or allows another to violate any section of this Title shall be subject to prosecution in Municipal Court and upon conviction subject to the fines and penalties set forth in Section 1.04.080. A first offense shall be punishable by a fine of no less than five -hundred dollars ($500). Each day of any violation of this section shall constitute a separate offense. 2) Civil Remedies. Ordinance #09, Series of 2022 Short-term Rentals Page 12 of 14 27 a. The City Attorney may institute injunctive, abatement, or other appropriate action to prevent, enjoin, abate or remove a violation of this Title when it occurs. The same right of action shall accrue to any property owner who may be especially damaged by violation of this Title. b. In addition to the penalties and remedies set forth herein, an STR permit shall be automatically revoked by the Community Development Director upon the third conviction of a violation of this Title by the permittee of the property subject to the permit within the one (1) year. C. Until paid, any delinquent charges, assessments, or taxes made or levied by the City pursuant to this Title shall, as of recording, be a lien against the property on which the violation has been found to exist. If not paid within thirty (30) days from the date of assessment, the City Clerk may certify any unpaid charges, assessments, or taxes to the Pitkin County Treasurer to be collected and paid over by the Pitkin County Treasurer in the same manner as taxes are authorized to be by statute together with a ten percent penalty for costs of collection. Any lien placed against the property pursuant to this Chapter shall be recorded with the Pitkin County clerk and recorder. 26.530.070 Fees. STR permits are assessed an annual fee per unit, remitted at the time of permit application, in accordance with the following table. Annual Administrative Fee STR-Classic: $394 STR-Owner-occupied: $394 STR-Lodaing Exempt: $148/unit Table 1: Fee Schedule 26.530.080 Appeals. Permittees may appeal decisions made by the Community Development Director in the enforcement of this chapter. Appeals will be heard by the Administrative Hearing Officer in accordance with Section 26.316.020.D. Appeals shall be processed in accordance with Section 26.316.030. INTRODUCED AND READ, as provided by law, by the City Council of the City of Aspen on the 20 day of May 2022. ATTEST: Nicole Henning, City Cler 794ee= Torre, Mayor Ordinance #09, Series of 2022 Short-term Rentals Page 13 of 14 28 FINALLY, adopted, passed and approved this 28th day of June 2022. ATTEST: Nicole Henning, City Clerk APPROVED AS TO FORM: J es R. True, City Attorney Torre, Mayor Ordinance #09, Series of 2022 Short-term Rentals Page 14 of 14 29 RESOLUTION NO. 106 Series of 2022) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, SUBMITTING TO THE ELECTORATE OF THE CITY OF ASPEN AT THE NOVEMBER 8, 2022, COORDINATED ELECTION A CERTAIN QUESTION IMPOSING A SHORT-TERM RENTAL TAX FOR THE PURPOSES DESCRIBED IN THE BALLOT QUESTION. WHEREAS, the City Council desires to place before the electorate of the City of Aspen certain ballot questions; and, WHEREAS, the City Council is authorized pursuant to Section 5.7 of the Aspen City Charter to, on its own motion, submit questions to a vote of the electorate; and, WHEREAS, the members of the City Council of the City (the "Council") have been duly elected and qualified; and, WHEREAS, Article X, Section 20 of the Colorado Constitution ("TABOR") requires voter approval for any new tax, the creation of any debt and for spending certain moneys above limits established by TABOR; and, WHEREAS, TABOR requires the City to submit ballot issues (as defined in TABOR) to the City's electors on limited election days before action can be taken on such ballot issues; and, WHEREAS, November 8, 2022, is one of the dates at which ballot issues may be submitted to the eligible electors of the City pursuant to TABOR; and, WHEREAS, the Council hereby determines that it is necessary to submit to the electors of the City, at the coordinated election to be held on November 8, 2022 (the "Election"), the question of imposing an excise tax on short term rentals in order to contribute to the funding of workforce housing and infrastructure maintenance and repair (the "ballot question"); and, WHEREAS, pursuant to Section 2.1 of the City Charter, all elections of the City are governed by the Colorado Municipal Election Code unless otherwise provided by ordinance; and, WHEREAS, Section 31-10-102, C.R.S., contained within the Municipal Election Code, permits any municipality to elect by resolution to utilize the requirements and procedures of the Uniform Election Code which will thereby permit the City to participate in the coordinated election being conducted by Pitkin County (the "County") on November 8, 2022; and, 30 WHEREAS, the steadily increasing activity in the short-term rental market throughout all zone districts within the city has increased the pressures on the community to provide essential services and affordable housing; and, WHEREAS, taxation is an equitable means of recovering costs to the community incurred through the delivery of essential services to residential and lodging exempt properties used as short-term rentals, including community policing, utilities services, transit, transportation, and pedestrian infrastructure, and affordable housing; and, WHEREAS, affordable housing, community infrastructure, and a clean and resilient environment are essential to maintaining a world -class, competitive, economically sustainable tourist economy; and, WHEREAS, a tax on short-term rentals within the City will generate revenue for local government to fund affordable housing, community infrastructure, and environmental initiatives for the benefit of the public and a sustainable community; and, WHEREAS, in keeping with the goal of the City's Comprehensive Plan to preserve small town character while maintaining livability, the City desires to mitigate the negative impacts of short-term rentals on Aspen's neighborhoods, affordable housing supply, economy, and environment; and, WHEREAS, the City of Aspen depends on a lived-in community of year-round locals to support community culture, provide labor and capital to support the local economy, ensure public safety and peace through the presence of first responders, health care and essential service workers in the community, and ensure the long-term viability of the community and tourist economy; and, WHEREAS, the availability of housing for local workers and residents including first responders, health care workers, and other essential service workers is diminishing, the system for delivering affordable housing is not keeping pace with need, and the housing market in the region and state of Colorado are in crisis; and, WHEREAS, the Aspen Area Community Plan includes policies directing the City of Aspcn to address affordable housing in the cunnnunity; and, 2 31 WHEREAS, a functional residential housing sector is essential to sheltering Aspen's populations, supporting a stable economy, maintaining the health, peace and safety of the City of Aspen for its residents and visitors; and, WHEREAS, Aspen is a tourists destination, attracting tens of thousands of visitors a year in all seasons, visitors which require transient tourist accommodations and participate in and support Aspen's tourist economy; and, WHEREAS, a tourist -based economy such as the City's requires a sufficient number of employees to provide the services required to serve such an economy. Without adequate workforce housing, a tourist -based economy cannot thrive; and, WHEREAS, to allow for a sufficient number of employees to be hired to provide the services necessary to sustain a tourist -based economy there must be an adequate supply of workforce housing; and, WHEREAS, historically, the long-term rental of residential property, or at least the long-term rental of space within a residential property, has been an important means for providing workforce housing within the City; and, WHEREAS, short-term rentals are extremely valuable to the City's economy and exist in various locations throughout the City; and, business; and, WHEREAS, the operation of a short-term rental in the City is the operation of a WHEREAS, tourist visitation, the operation of tourist accommodations, the goods and services demanded by tourists, and the transportation systems required to move tourist to and throughout the community have environmental impacts, measured as Greenhouse Gas Emissions; and, WHEREAS, the difference in property tax rates for commercial and residential properties contributes to gaps in fimding for affordable housing, essential government services, infrastructure, and a healthy environment capable of supporting a sustainable economy; and, WHEREAS, the Council now determines it is necessary to submit to the electors of the City, at the Election which will be held as a coordinated election with the County on November 8, 2022, the election questions; and 3 32 WHEREAS, it is necessary to set forth certain procedures concerning the conduct of the Election; and, WHEREAS, the Council finds that the adoption of this Resolution is necessary for the preservation of the public health, safety and welfare. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, THAT: Section 1. All action heretofore taken (not inconsistent with the provisions of this resolution) by the City and the officers thereof, directed towards the Election and the objects and purposes herein stated, is hereby ratified, approved and confirmed. Section 2. Unless otherwise defined herein, all terms used herein shall have the meanings defined in the Uniform Election Code of 1992, Title 1, Articles 1 through 13, C.R.S., as amended (the "Uniform Election Code"). Section 3. Pursuant to TABOR and the Uniform Election Code, and all laws amendatory thereof and supplemental thereto, the City hereby determines that a special Election shall be held within the City on November 8, 2022, and that there shall be submitted to the eligible electors of the City the election questions set forth herein. Because the Election will be held as part of the coordinated election, the County Clerk and Recorder (the "Clerk") shall conduct the election on behalf of the City and officers of the City have been previously authorized to enter into one or more intergovernmental agreements with the County for the conduct of the Election pursuant to Section 1-7-116, C.R.S. Any such intergovernmental agreement heretofore entered into in connection with the Election is hereby ratified, approved and confirmed. Section 4. The Council hereby authorizes and directs the officers of the City to certify on or before September 9, 2022, the following election question in substantially the form 4 33 hereinafter set forth to the Clerk, which such question shall be submitted to the eligible electors of the City at the Election: CITY OF ASPEN — SHORT TERM RENTAL TAX. SHALL CITY OF ASPEN TAXES BE INCREASED NOT MORE THAN $9,140,000 COMMENCING MAY 1, 2023, AND BY WHATEVER AMOUNTS ARE GENERATED ANNUALLY THEREAFTER BY THE IMPOSITION OF AN EXCISE TAX OF NOT MORE THAN 10% ON THE AMOUNT CHARGED ON A NIGHTLY ROOM RATE AT ANY ACCOMMODATION OR BUSINESS THAT IS REQUIRED TO OBTAIN A SHORT-TERM RENTAL PERMIT FROM THE CITY; PROVIDED HOWEVER THAT: SUCH TAX SHALL BE APPLIED TO "LODGE EXEMPT PERMIT PROPERTIES" AS HEREAFTER DEFINED IN AN ORDINANCE OF THE CITY COUNCIL WITH A SHORT-TERM RENTAL PERMIT STR-LE AT 5.0%; SUCH TAX SHALL BE APPLIED TO "OWNER OCCUPIED UNITS" AS HEREAFTER DEFINED IN AN ORDINANCE OF THE CITY COUNCIL WITH A SHORT-TERM RENTAL OWNER OCCUPIED PERMIT STR-00 AT 5.0%; AND 2ND HOMEOWNER, INVESTMENT PROPERTY UNITS AS HEREAFTER DEFINED IN AN ORDINANCE OF THE CITY COUNCIL WITH A SHORT-TERM RENTAL PERMIT STR-CLASSIC AT 10%; AND SHALL AT LEAST 70% OF THE REVENUE GENERATED FROM SUCH TAX BE UTILIZED FOR THE PURPOSE FUNDING AFFORDABLE HOUSING AND SHALL THE REMAINDER OF THE REVENUE GENERATED FROM SUCH TAX NOT UTILIZED FOR AFFORDABLE HOUSING BE UTILIZED FOR INFRASTRUCTURE MAINTENANCE AND REPAIR AND FOR ENVIRONMENTAL INITIATIVES; AND SHALL THE CITY BE AUTHORIZED TO COLLECT, KEEP AND SPEND THE REVENUES FROM SUCH TAX AND ANY INVESTMENT INCOME THEREFROM NOTWITHSTANDING THE LIMITS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION? Section 5. Pursuant to the intergovernmental agreement entered by the City to participate in the Pitkin County coordinated election, the City Clerk of the City of Aspen (the "City Clerk") has been appointed as the designated election official of the City for purposes of performing acts required or permitted by law in connection with the Election. Section 6. Pursuant to Section 1-11-203.5, C.R.S., any election contest arising out of a ballot issue or ballot question election concerning the order of the ballot or the form or content of 5 34 the ballot title shall be commenced by petition filed with the proper court within five days after the title of the ballot issue or ballot question is set. Section 7. The officers of the City are hereby authorized and directed to take all action necessary and appropriate to effectuate the provisions of this resolution. Section 8. If any section, paragraph, clause or provision of this resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall in no manner affect any remaining provisions of this resolution. Section 9. All resolutions or parts of resolutions inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any resolution or part of any resolution heretofore repealed. Section 10. The effective date of this resolution shall be immediately upon adoption. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 29'' day of August 2022. Torre, Mayor I, Nicole Henning, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day hereinabove stated. Nicole Henning, City Cler 6 35 RESOLUTION #1379 SERIES OF 2024 A RESOLUTION OF THE ASPEN CITY COUNCIL ADOPTING AN AMENDED SHORT-TERM RENTAL PROGRAM GUIDELINES TO PROVIDE PROGRAM CLARITY AND PROCESS DESCRIPTION OF THE CITY OF ASPEN'S SHORT TERM RENTAL PROGRAM AS CODIFIED IN 26.530 OF THE LAND USE CODE. WHEREAS, at their regular meeting on June 28, 2022, City Council approved Ordinance 109, Series of 2022 by a 5 to 0 vote, adopting Short-term Rental Regulations; and, WHEREAS, Aspen Municipal Code Section 26.530.OSO.D references the "Adoption of and Compliance with STR Program Guidelines" and requires conformance with applicable guidelines for the approval of any short-term rental permit; and, WHEREAS, Aspen Municipal Code Section 26.208.010.H, Powers and Duties of the City Council, requires Council adoption of any guidelines that will be used in a guiding or regulatory capacity by the City; and, WHEREAS, following the adoption of Ordinance #09, Series of 2022, staff built the Short-term Rental (STR) Program to support the policy and regulatory outcomes of Ordinance 109, Series of 2022 that was established to equitably balance the interests of the short-term rental industry, the local community, and the Aspen Area Community Plan; and, WHEREAS, the original version of the Shot -teem Rental P og am Guidelines, adopted with Resolution #0995 Series of 2022, sought to ensure compliance under the new permit regime, improve customer understanding of the program, and to describe details of program administration for the purposes of increased transparency; and, WHEREAS, following two years of experience of managing the STR Program and working with the Short-term Rental PYogNam Guidelines, staff has identified areas within the document that are in need of improved organization and additional clarity, and staff has drafted the amended document with these outcomes in mind; and, VVHEREAS, the amended Short-term Rental Program Guidelines does not change any regulations or other codified program elements as stated in 26.530; and, WHEREAS, the Aspen City Council finds that this Resolution furthers and is necessary for the promotion of public health, safety, and welfare; Resolution #137, Series of 2024 Amended Short-teNm Rental Program Guidelines Page 1 of 2 36 NOW, THEREFORE, BE IT RESOLVED: That City Council hereby adopts the amended "Short-term Rental Progf°am Guidelinesattached as Exhibit A. APPROVED by the Aspen City Council at its regular meeting on November 195 2024. Torre, Mayor ATTEST: Nicole Henning, City APPROVED AS TO FORM: R. True, City Attorney EXHIBIT A —Short-term Rental Program Guidelines, as amended. Resolution # 137, Series of 2024 Amended Shot-tej°m Rental Program Guidelines Page 2 of 2 37 lltr4lftlo N ''eIA 41 F: ', 1• J 7.'1 11 Y j •` I ,. ir i1.''. •, S; Z . r . •. 1' lk All j JAI IRV6h d I Ji I f' 'f y II f • }; At ` Wit Itt 1 , of 1p I., to I y All 1 r7P V All , Y' jim witi•] t•]dfasflilw,". r i.t l rr {a' r J (l•I i ,. i:{1'.1 jJfF l,ffr r r41 .yjr( 4, i a P r - 1I 7 .. r 0* a,• ,.r. itit 6 1 r Qil rFAA it Al if a IF for 1'.i•i Alf -A mei.h hl vi1 ufi. iv.. t if ;1' w It. tf t_e e42•'a'1 . r o AOF 1 r I y • IF 08/24 38 EXHIBIT A: Short-term Rental Program Guidelines, as amended. CONTENTS Section 1: Introduction To Short -Term Rentals Purpose & Intent 3 Governing Law 3 Glossary of Terms 4 Section 2: Description of Permit TXpes Introduction 5 Lodging Exempt Short -Term Rental (STR-LE) 5 Owner -Occupied Short -Term Rental (STR-00) 7 Classic Short -Term Rental (STR-C) 9 Section 3: Operational Standards &Requirements Permittee Requirements Qualified Owner's Representative (QOR) Requirements Pitkin County Assessor Information Occupancy Limit Information Zone District Requirements Supplemental Document Requirements Neighborhood Notice Requirement In -Unit Messaging Requirements Non -Transferability of STR Permits STR-C Permit Waitlists Tax Filing (Minimum Rental) Requirement Advertisement Requirements Inspections Permit Abandonment Section d: Enforcement Introduction Complaints Violations Permit Revocation Penalties Civil Remedies_ Appeals Section Financial Information Business License Requirement Monthly Tax Reporting Requirement Tax Rates, Permit and License Fees _ Section 6: Apalvinct For An STR Permit How to Choose the Appropriate Permit Type Application Requirements by Permit Type_ How To Submit A New Permit Application_ How To Renew An Existing STR Permit Section 7: Munirevs Software Information 11 11 12 13 13 13 14 16 17 17 18 18 1q lq 20 20 21 22 22 23 23 24 24 25 Introduction to Munirevs 31 How to Register for a User Account 31 User Account Information 32 How to Link a User Account to an Existing Business Account 32 Notifications and Open Tasks 33 How to Access a Permit or License Document 33 More information about the City of Aspen's short-term rental program, including resources mentioned in this document, can be found at aspen.gov/strs. 39 Purpose and Intent A short-term rental (STR) is defined by the City of Aspen as the use or occupancy of a residential property or dwelling unit, in whole or in part, by the general public for a fee, primarily for tourist accommodations, and for a period of less than 3o days. STR properties serve an important role in supplementing Aspen's lodging bed base, diversifying lodging options, and providing economic benefit to property owners and the community. Timeshare, hotel, motel, and bed and breakfast uses do not qualify as STR uses, and STR permits are not available for employee, affordable, or other deed or covenant restricted housing. Short-term rentals also impact the Aspen community in various ways. Resident quality of life, parking, wildlife protection, affordable housing, transportation, and City services are all impacted from the operation of STRs. Due to the potential for adverse impacts, STRs are regulated by the City to protect the health, safety, and welfare of owners, neighbors, and visitors. STR regulations also balance conflicting community needs and interests. The City of Aspen recognizes the importance of a diverse lodging bed base and is committed to updating the STR code as necessary to meet evolving community needs and priorities. Short-term rentals are required to operate in accordance with all applicable Municipal Code regulations protecting the health, safety, and peace of the community, and supporting the maintenance of community character and values. Before renting a lodge or residential unit for any period of less than 3o days at a time, property owners are required to first obtain an STR permit and an STR business license from the City of Aspen. This STR Program Guidelines document is intended as an informational guide for STR owners and operators. The guide informs permit eligibility, permit application and renewal process, and compliance requirements for customers who are currently participating or considering future participation in the City's STR program. Governing Law To the extent which information in these guidelines conflicts with the City of Aspen Municipal Code, the City of Aspen Municipal Code shall control. Nothing in these guidelines shall supersede the City of Aspen Municipal Code. Terms used herein shall have the same meaning as in the City of Aspen Municipal Code unless otherwise defined herein. City of Aspen Short -Term Rental Guidelines Page 3 40 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Glossary of Terms Condo -hotel. A lodging property which meets the definition of Lodge in Section 26.104.110, Use Categories, and in which ownership of individual lodge units has been condominiumized in accordance with The Colorado Condominium Ownership Act, C.R.S. § 38-33-101, et. seq. Hotel. See definition of Lodge, Section 26.104.110 Use Categories. Motel. See definition of Lodge, Section 26.104.110 Use Categories. Lodge. See definition of Lodge, Section 26.104.110 Use Categories. Natural Person. A living, individual human being, as distinct from a "legal person" for the purpose of assigning certain legal rights. Owner -Occupied. A residential property that serves as the primary residence of the title owner of the property. Owner -Occupant. For the purposes of permitting specific types of STRs, owner -occupant is a natural person whose primary residence is the City of Aspen residential property or unit for which an STR permit is sought. Permittee. A natural person who has an ownership interest of at least 1o io in the property for which a City of Aspen STR permit is issued. Pillow. A unit of measure for assessing affordable housing generation and occupancy of lodge rooms/ units per bedroom in an STR. Each lodge and STR unit shall be considered to have two pillows for each bedroom. For calculating occupancy in STRs, sleeper sofas, murphy beds, and similar sleeping accommodations shall be considered as two pillows. Studio units shall be considered to have two pillows. Primary residence. The permanent residential address, as demonstrated by acceptable legal documentation described in this title, of an owner - occupied STR permit holder. Qualified Owner's Representative (QOR). A natural person who is legally designated on the permit application by the permittee to apply for and maintain compliance with a City of Aspen STR permit. Short-term Rental (STR). The use or occupancy of a residential property or dwelling unit, in whole or in part, by the general public for a fee, primarily for tourist accommodations, and for a period of less than 30 days. Timeshare, hotel, motel, and bed and breakfast uses are not STR uses. City of Aspen Short -Term Rental Guidelines Page 4 41 n Guidelines, as amended. Introduction There are three different types of STR permits offered by the City of Aspen: Lodging Exempt Short -Term Rental (STR-LE) Owner -Occupied Short -Term Rental (STR-00) Classic Short -Term Rental (STR-C) STR permits are differentiated based on the permittee's residency, the zone district the property falls within, and whether the unit is located within a lodge property (as defined by 26.io4.»o Use Categories). Each STR permit type has different regulatory and financial requirements which are described in detail in this section. Lodging Exempt Short -Term Rental (STR-LEA Who is it for? The Lodging Exempt STR (STR-LE) permit is available to managers of lodging and condo -hotel properties which meet the definition of Lodge or Condo -hotel per Section 26.o4.iio, Use Categories. Some characteristics of Lodges and Condo -hotels include, but are not limited to, common reservation and cleaning services, combined utilities, and on -site, in -person management and reception services during normal business hours. Properties eligible for STR-LE permits are required to be marketed under a unified brand and marketing model where the individual ownership of units is secondary to the central brand of the property. There is no limit to the number of rental nights allowed under the STR-LE permit. Multi -family condominiumized residential properties that do not meet the definition of Lodge or Condo -hotel are not eligible for STR-LE permits and must instead apply for an STR-00 or STR-C permit. City of Aspen Short -Term Rental Guidelines Page 5 42 EXHIBIT A: Short-term Rental Program Guidelines, as amended. t(D) tcD) ce)Icon fnn`u° f<frU eni90O n Lodge or condo -hotel managers may apply for a single STR-LE permit to cover multiple units within the lodge or condo -hotel property. The STR-LE permit application must list the total number of units covered by the permit. A qualified owner's representative (QOR) must be designated as the primary point of contact for all units covered by the permit. The QOR listed on an STR-LE permit is responsible for obtaining business licenses, filing taxes, and maintaining current information for each unit covered by the STR-LE permit. The QOR must also comply with QOR requirements described in Section 3 of this STR Program Guidelines document. A Lodging -Exempt Affidavit, available on the City's STR website, must be submitted with each STR-LE permit application. Only one affidavit is required per STR-LE permit application. Properties eligible for STR-LE permits are not required to provide public notice of the permit application. As an alternative to the STR-LE permit, an owner of a unit within a lodge or condo -hotel property may choose to apply for a STR-C or STR-00 permit for their unit. Owners that choose to operate outside of a property's STR-LE permit are subject to the tax obligations and program requirements of the STR permit they obtain for their property. Only one STR permit is allowed per unit. Permit Limits Unlimited numbers of STR-LE permits are available in zone districts where STRs are a permitted use. STR-LE permits are prohibited and not available for properties in the A, C, OS, P, WP, or PUB zone districts. Subject to change. Late filings subject to Penalties anc Interest. City of Aspen Short -Term Rental Guidelines Page b 43 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Owner -Occupied Short -Term Rental (STR=00) ho os of for? The Owner -Occupied STR (STR-00) permit is available to City of Aspen residents who own their property and can submit sufficient documentation proving that the property is their primary residence. Because the STR-00 permit is intended for Aspen residents who live at their property full-time, this permit type is limited to 12o rental nights per calendar year. Full-time residents that desire to rent their property for more than 12o nights per year may apply for a Classic (STR-C) permit. Applicants who wish to obtain an STR-00 permit are required to submit two forms of valid documentation indicating that the property is the permittee's primary residence. The following are acceptable proofs of primary residence: Valid Colorado driver's license Valid motor vehicle registration Voter registration Current federal or state tax return Documents must be issued to the proposed permittee and for the address of the STR property. Other legal documentation pertinent toward establishing primary residence may be deemed sufficient by City staff. Utility, insurance, or property tax bills are not sufficient proofs of primary residence. STR-00 permit applications also require the submission of a completed HOA Compliance Affidavit and Letter of Approval and aSelf-Inspection Checklist and Affidavit. Both documents are available on the City's STR website. STR-00 applications require detailed information about the permittee and STR property, and if the owner chooses to designate a Qualified Owner's Representative (QOR) to manage the property in their absence, they must also include contact information for the QOR. See Section 3 of this document for details about this required information. All new STR-00 applications are subject to a 15- day neighborhood noticing period. See Section 3 for information about the neighborhood notice. City of Aspen Short -Term Rental Guidelines Page 7 44 EXHIBIT A: Short-term Rental Program Guidelines, as amended, evrnii units Unlimited numbers of STR-00 permits are available in zone districts where STRs are a permitted use. STR-00 permits are not available for properties within the A, C, OS, P, WP, or PUB Zone Districts. Financial Information STR-00 Business License STR-00 Permit Aggregate STR-00 Tax Subject to change. Late filings subject to Penalties and Interest. Finance; annual renewal Community Development; annual renewal Finance; monthly filings** 150/unit/year 394/year City of Aspen Short -Term Rental Guidelines Page 8 45 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Classic Short -Term Rental (STR=C) 9ho is it for? The STR Classic (STR-C) permit may be issued to any natural person who owns a residence in the City of Aspen. Unlike the STR-00 permit, STR-C permits are available to non -owner -occupied residential properties, and proof of primary residence is not required. STR-C permits are also available to owner -occupied residences where the permittee wishes to short-term rent the property for more than 12o nights per year. Q pplication 0°G U tion The STR-C permit is available in limited quantities in certain zone districts (see STR-C Permit Cap Details on the next page). STR-C permit applications submitted for properties within capped zone districts will be subject to waitlists if the number of existing STR-C permits is equal to or above the number of available permits in the property's zone district. STR-C permit waitlists are updated on a regular basis and available at http://www.aspen.ao_iJstrs. STR-C permit applications require the submission of a completed HOA Compliance Affidavit and Letter of Approval and a Self -Inspection Checklist and Affidavit. Both documents are available on the City's STIR website at http.4 www.aspen.q_ v strs. STR-C applicants must provide detailed information about the permittee and the STR property at the time of application. If the property owner does not live in the Roaring Fork Valley, they must designate a local Qualified Owner's Representative (QOR) to manage the property in their absence. Contact information for the QOR must be included in the permit application. See Section 3 for additional details about the permittee and QOR roles. New STR-C permit applications are subject to a 15-day neighborhood noticing period. See Section 3 for information about the neighborhood notice. Permit Limits There is no annual limit on the number of nights per year an STR-C may operate. Limited numbers of STR-C permits are available for issue in certain zone districts (see next page). An unlimited number of 5 I K-C: permits are available in the L, CL, CC, and C-1 Zone Districts and Lodge and Lodge Preservation Overlay. STR-C permits are prohibited in the A, C, OS, P, WP, and PUB Zone Districts. Financial Requirements STR-C Business License STR-C Permit Finance; annual renewal I $150/unit/year Community Development; annual renewal $394/year Aggregate STR-C Tax Subject to chane. Late filings subject to Penalties and Interest. g Finance; monthly filings** 21.3% City of As IShort-Terir Rental Guidelines I Page 9 46 EXHIBIT A: ShortAerm Rental Program Guidelines, as amended. Shop° V- en,"al Ckm oc (STRmC PerrraiRt Cap Details Aspen City Council placed limits, also referred to as "caps," on the number of STR-C permits available for issue in certain zone districts. Caps are designed to ensure zone districts function as intended and in harmony with established uses. See the chart below for information about capped zone districts. All permit types, including STR-C, are allowed with no cap in the L, CL, CC, and C-1 zone districts, and Lodge Overlay and Lodge Preservation Overlay Zones. RR -Rural Residential R-3 -High Density Residential R-6 - Medium Density Residential R-15 - Moderate Density Residential R-15A - Moderate Density Residential - A R-15B -Moderate Density Residential - B R-30 - Low Density Residential R/MF -Residential Multi -Family R/MFA - Residential Multi -Family as A AH asAffordable Housing MU - Mixed Use NC -Neighborhood Commercial SCI - Service/Commercial/Industrial SKI -Ski Area Base C-1 -Commercial CC -Commercial Core L -Lodge CL -Commercial Lodge Lodge Overlay Lodge Preservation Overlay A - Academic C -Conservation OS -Open Space PUB -Public P -Park WP -Wildlife Preservation 1 47 12 1 190 12 1 2 2 Unlimited permits allowed Unlimited permits allowed Unlimited permits allowed Unlimited permits allowed Unlimited permits allowed Unlimited permits allowed Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Note: Zone district caps may be amended by Aspen City Council from time to time. All STR locations, allowable zones, permit information, and waitlist status may be found on the City of Aspen's STR website. 47 A: Short-tel-n Rental Program Guidelines, as amended. Permittee Requirement STR permits are the legal responsibility of the permittee named in the application, including compliance with 1VWnicipl Code regulations, enforcement, and responsiveness to visitors and City staff. A permittee must have at least to%ownership interest in the STR property. If a property is owned by an LLC, trust, or other organization, that entity must designate one of its owners to be listed as the permittee on an STR permit. Only one permittee is allowed per STR permit. The permittee must be a natural person, as distinct from a legal person, for the purposes of an STR permit application. A first and last name are required on all STR permit applications; LLC, trust, or organizational names will not be accepted. STR permits are not transferable from one permittee to another in any instance. Detailed permittee information is required on STR permit applications, including residential and mailing address, daytime and nighttime phone number, and email address. STR-LE permits are exempt from this requirement; instead, the QOR for an STR-LE property may enter their contact information in the permittee fields of an STR- LE application. Permittees must be available twenty-four (24) hours per day, year round, to ensure the STR property is maintained and operated as required by City of Aspen Municipal Code.. Permittees who cannot meet the regulatory requirements for in -person service and emergency response must designate a QOR (see Qualified Owner's Representative (QOR) Requirements). Qualified Owner's Representative (QOR Requirements The City of Aspen recognizes that many STR property owners live out of town, and as such, are unable to respond to concerns at the STR property in -person or in a timely manner. In other cases, property owners may simply prefer to hire an individual or property management company to operate the STR unit, even if they reside at the property or live nearby. If a property owner is either unable or unwilling to be the point of contact for the STR unit, the owner may designate a qualified owner's representative (QOR) in their place. A City of Aspen Short -Term Rental Guidelines Page» 48 EXHIBIT A: Short-term Rental Program Guidelines, as amended. QOR is responsible for maintenance of the STR property and timely response to all inquiries, complaints, enforcement actions, and on -site needs from renters and City officials. A QOR must meet the following requirements: The QOR must be a natural person and must hold a valid business license issued by the City of Aspen. The QOR must physically reside in Eagle, Pitkin, Garfield, or Gunnison Counties, or within the Roaring Fork River Drainage area. The QOR must be available twenty-four (2L4 hours per day, year round, to ensure that the STR property is maintained and operated as required by City of Aspen Municipal Code. The QOR must respond to all service or compliance inquiries from renters or City officials, and they must be available to be at the STR property within two (2) hours of an emergency. The QOR must notify the permittee if a Municipal Code violation has occurred at the STR property. Failure of a QOR to respond to a call from a renter or the Community Development Director within 24 hours shall result in a notice of violation (NOV) issued to the permittee. Only one QOR may be designated on an STR permit. Contact information for the QOR, including first and last name, email address, day and nighttime phone numbers, business license information, and company affiliation must be listed in the STR permit application. The QOR 's residential address will be verified at time of application to ensure the QOR resides within a 2-hour driving distance from the STR address. Should a permittee need to change or update the contact information for a QOR on an issued permit, they may do so by contacting strs@ spen.gov for assistance. Failure of the permittee to provide updated QOR contact information to the City within 10 days of any change shall result in a notice of violation (NOV) issued to the permittee. Pitkin County Assessor Information STR permit applications require a property's Pitkin County Parcel ID number, Pitkin County owner's name, number of bedrooms, and size of heated area of the residence. This information can be accessed by visiting the Pitkin County Assessor's Property Search website and searching for the STR property. Users may search by property address, subdivision, or Parcel ID. Visit the Pitkin County Assessor's Property Search website at: https:// gpublic.schneidercorp.com/Application.aspx?ApplD=lo71&LayerID=26o13&PageTypelD=2&Pagel D= 10531 City of Aspen Short -Term Rental Guidelines Page 12 49 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Occupancy Limit Intormatioa- STR Program participants must adhere to the occupancy limits for the STR unit as listed on the issued permit. The number of permitted occupants in an STR unit depends on the number of bedrooms: Studio units are limited to three (3) occupants. STR units with one or more bedrooms are limited to two (2) occupants per bedroom, plus an additional two (2) occupants. Bunkrooms are allowed two (2) occupants regardless of the number of pillows. Failure to accurately list occupancy or exceeding the posted occupancy may result in a notice of violation NOV) issued to the permittee. Occupancy may be physically verified by City staff. Zone District Requirement Zoning requirements limit the location and number of STRs in the community. They prevent unreasonable burdens on services and impacts on neighborhoods posed by STRs. Zoning also ensures that STRs are compatible with surrounding land uses and do not harm or alter the neighborhoods in which they are located. STRs are permitted in the following zones: R-3, AH, R/MF, R/MFA, R-6, R-15, R-SSA, R-TSB, R-3o, RR, SCI, NC, MU, SKI, L, CL, CC, and C-i Zone Districts, including the Lodge Overlay (LO) and Lodge Preservation Overlays (LP). STRs are prohibited in the A, C, OS, P, PUB, and WP Zone Districts, and no STR permits will be issued to properties in these zones. Applications for STR permits require the applicant to list the zone district in which the STR unit is located. Applicants may use the STR Map to determine their zone district. To find a property's zone district, use the STR Map: https://experience.arcgis.com/experience/48e993d78c32429la543b59lf6o82972 Supplemental Document Requirement Depending on the type of STR permit being applied for, supplemental documents such as the HOA Compliance Affidavit and Letter of Approval must be submitted to accompany the permit application form. Application requirements by permit type can be found in Section 6. All supplemental documents must be completed, signed, and dated no more than three (3) months prior to submission of an STR permit application. Permittee and/or QOR signatures on all documents must match the permittee and QOR entries in the permit application form. Signatures may be digital or hand- written. Documents with incorrect permittee or QOR names will be rejected and will result in delays for the permit application. Incomplete documents will not be accepted. City of Aspen (Short -Term Rental Guidelines Page 13 50 EXHIBIT A: Short-term Rental Program Guidelines, as amended. All supplemental documents must be uploaded through the property's Munirevs account in PDF or JPG/JPEG format. If you require assistance uploading a document in Munirevs, please contact City staff at strs@aspen.gov. To learn more about accessing Munirevs, see Section 7 of this document. The following supplemental documents are accessible through the City's STR website HOA Compliance Affidavit and Letter of Approval Self- Inspection Checklist and Affidavit Lodging Exempt Affidavit Public Notice Affidavit Access Supplemental Documents on the City's STR website: http://www.aspen.gov/STRs Neighborhood Notice Requirement Why Is Public Notice Required? The intent of a neighborhood notice is to ensure that neighbors of proposed STR properties are aware of a permittee's intention to use their property as an STR. Noticing gives neighbors an outlet through which to provide feedback about the proposed STR use at the property. Notices mailed to neighbors also provide contact information for the permittee or QOR responsible for maintaining compliance with City of Aspen regulations and requirements of the STR Program, thereby helping hold STR owners and operators accountable to being good neighbors. The STR neighborhood notice process is consistent with City of Aspen noticing requirements in Section 26.3o_q_..o6o e)(3 b-c, Ma_nner of Notice. When to Notice Applicants must provide notice after a new STR-C or STR-00 application is submitted and before it is issued. City of Aspen Short -Term Rental Guidelines Page 4 51 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Once an STR-C or STR-00 permit application is received, City staff will review the application for completeness and compliance. If the review is approved, the applicant will be notified to initiate the neighborhood noticing period. Applicants shoo col not begin the notice process unt ul c hlec eed to do so by City of Aspen staff. Annual STR permit renewals do not require neighborhood noticing. Uj VV When an applicant is directed to complete a neighborhood notice, City staff will e-mail the Poster and Mailing notice files to the applicant. The applicant must have the Poster Notice file professionally printed as a sign made of waterproof materials, measuring no less than twenty-two (22) inches wide and twenty-six (26) inches tall, with letters measuring no less than one (1) inch tall. The applicant must secure the poster in an obvious street -facing location at the proposed STR property for a minimum of 15 days. While the poster is secured on the property, the applicant must photograph the poster, as they will need to submit the photo as one proof of notice at the end of the 15-day notice period. The applicant must also mail (or hand deliver) the Mailing Notice file to all property owners within three hundred (300) feet of the proposed STR property. This delivery of notice must be completed during the same 15-day period in which the Poster Notice is posted at the STR property. At their discretion, the applicant may include additional notes, text or graphics in addition to the Mailing Notice file. To generate a list of mailing addresses within three hundred (300) feet of an STR property, the applicant may use the "Create Mailing List" function on the Pitkin County website. Applicants should retain a copy of this mailing list as it will be a required submission at the conclusion of the notice. To create a mailing list on the Pitkin County website, follow the instructions below: Visit https://maps.pitkincounty.com h ?viewer-=ComDev Click the "Create Mailing List" link at the left side of the screen. Select "Search Parcels by Address" and click the "Next" button. Begin typing the STR property address in the box, select the STR address from the dropdown I enu, and click the "Next" button. Confirm the requested distance as 300 feet and click the "Next" button. Your mailing list will populate as both a PDF file and an Excel file. Create a mailing list by using the Pitkin County website: https://maps.pitkincounty.com/qvh/?viewer=ComDev City of Aspen Short -Term Rental Guidelines Page 15 52 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Proof of Notice Before a new STR permit can be issued, the applicant is required to provide proof that they have completed all steps of the public notice listed above. At the conclusion of the notice period, the applicant must complete the Public Notice Affidavit, located on the City's STR website. The completed affidavit, photo of the Poster Notice erected on property, and copy of the mailing list used to mail the notices must be uploaded to the applicant's Munirevs account for staff review. Upon successful completion of the Public Notice and submission of the proofs of notice, applicants can expect a final review of their permit application within 21 days or less. Finished with the public notice? Obtain the Public Notice Affidavit at: http://www.aspen.gov/STRs Submit the poster photo, mailing list, and Public Notice Affidavit through Munirevs: https://aspen.munirevs.com In -Unit Messaging Requirements Once an STR permit and business license are approved and issued, the permittee is responsible for providing the required in -unit messaging for renters to access. Emergency contacts, noise and wildlife ordinances, and days of trash pickup are printed directly onto the STR permit. Applicants are also required to produce and post a fire escape plan, as noted in the Self -Inspection Checklists and Affidavit, for their residence. Permittees must provide easy access to the following documents for renters in every STR unit: The valid STR permit The valid STR business license The Good Neighbor- Guide The fire escape plan The STR permit and business license are available through the permittee's Munirevs account. See Section 7 of this document for detailed instructions to access these documents. The Good Neighbor Guide is available for print from http/www.pspen.gov,STRs and paper copies are available for pickup in the Community Development Department at Aspen City Hall (427 Rio Grande PI, Aspen CO 81611). The fire escape plan must be produced by the permittee or their agents. City of Aspen Short -Term Rental Guidelines Page i6 53 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Non -Transferability of STR Permits STR permits are granted only for the property for which they are issued, and solely to whom they are issued. V toevIrAi :s C90 n no kv sivis eg r kT;l LwCZ?Q U0 PUp) =9 PU UO LJkiu IWZ7)9 ©H Sc] t G1u U U`6kZ;> UGC ca Y 0 If a property with a valid STR permit is sold, the permit will be terminated and revoked automatically upon the sale of the property. New property owners wishing to short-term rent a property must apply for a new permit and will be subject to a neighborhood notice and waitlists for STR-C permits in capped zones. If a property with an STR permit is owned by a partnership, corporation, association, or any other legal entity, and the permittee transfers their interest in the property to a third -party individual or entity, or if more than ten percent (lo%) of the partnership, corporation, association, or legal entity is transferred to a third -party individual or entity, a "transfer of ownership" shall be deemed to occur. Upon such transfer of ownership, the permit will be deemed terminated and revoked automatically, and the new owner of the property shall be required to apply for a new STR permit if it wishes to continue the use of the property as a short-term rental. STR- C Permit Waitlists STR- C permits are issued in limited quantities in the RR, R-3, R-6, R-5, R-SSA, R-15B, R-3o, R/MF, R/MFA, AH, MU, NC, SCI, and SKI zone districts. See "Short-term Rental Classic (STR-C) Permit Cap Details" in Section_ 2 for numbers of STR-C permits available in capped zones. New STR-C permit applications submitted for properties in zone districts where the number of available STR permits has been met or exceeded may be subject to a waiting list for permits. See which zone districts currently have waiting lists for permits on the City's ST_R_website. To secure a position on an STR-C permit waitlist in a property's zone district, a complete, compliant STR- C permit application must be submitted, and the STR-C permit fee must be paid at the time of submission. STR- C permit fees are nonrefundable. Waitlisted permit applications may not be transferred to any other permittee in any instance. STR- C permits in capped zones are issued on a first - come, first - served basis based on the date and time the complete, compliant application was received. City staff will notify the permittee and/or QOR on file when an STR-C permit is available based on their waitlist position. Once notified, the permittee and/or QOR has fourteen (i4) days to respond to the City to accept the available STR-C permit. If no response is received by the City within fourteen (i4) days of the offer, the waitlist spot will be forfeited, and the available STR-C permit will be granted to the next approved applicant on the waitlist. View STR-C permit waitlists at: http://www.aspen.gov/STRs. City of Aspen Short -Term Rental Guidelines Page 17 54 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Tax Filing (Minimum Rental) Requirement Properties witG permits mush be occuplied by a short-term renter a minimurva o ry once ViDer yeav4 as shown in tan fol00ags, to be eligible for anv-ma. renewal. Taxes owed for STR stays commencing between January I and December 31 of a given year are eligible to satisfy the minimum rental requirement for that year, so long as STIR taxes are submitted by the monthly tax filing deadline for those rentals. Taxes owed for stays which span two different months must be reported for the month during which the renter took possession of the property. Taxes for December stays must be reported by the deadline in the following January to meet this requirement. Long-term rentals of G ir y Q© c ays or moG,e a o vue 9® G o; satisfy the tang foloU c Qr or orr m rental) requirement. Permits with one calendar year of $o tax filings from the date of permit issuance or renewal will be considered abandoned. Abandoned permits for properties in capped zone districts will be made available to the next applicant on a first -come, first -served basis, or to the next applicant on the waitlist for that zone district. STR-LE permits are exempt from this provision. Should a permittee fail to meet the tax filing (minimum rental) requirement in a given year, and should the permittee wish to continue operating the property as an STR, the permittee must apply for a new permit. New permits are subject to neighborhood notices and waitlists for STR-C permits in capped zones. For more information about monthly tax filing deadlines and to learn how to file taxes for an STR account, see Section 5 "Monthly Tax Reporting." Advertisement Requirements Each STR permit is issued with a unique permit number. The permit number must be clearly displayed in all advertisements and listings of the STR property, including but not limited to digital and printed advertisements. STR advertisements must also display the maximum occupancy as listed on the property's STR permit. Failure to list the valid permit number or maximum occupancy as listed on the STR permit may result in the issuance of a notice of violation (NOV) to the permittee. Advertising an STR without a valid STR permit and business license will result in enforcement action. Advertising signs, logos or realtor signs shall not be permitted on any STR-C and STR-00 licensed property unless the property is listed for sale. City of Aspen Short -Term Rental Guidelines Page 18 55 Inspections EXHIBIT A: Short-term Rental Program Guidelines, as amended. By signing and submitting an STR permit application, and subsequently being granted a permit, the permittee and/or QOR consent to inspections of the STR property on an as -needed basis for the purpose of determining compliance with City codes, regulations and laws. If through a citizen complaint or audit it is determined that an inspection of the STR property is warranted, the permittee or QOR will be made aware of the intent to inspect. No inspection will be made without first giving the permittee and/or QOR forty-eight (48) hours' notice of the inspection. iBeAre o r r mittee or , i o pond t BB from the omr MU o i y ve0 6 ment Director within er G y r Q?, Cours w9u resul ur otice of voo u W Q6`OV) being oe a 9 © the permittee. If a violation of the City of Aspen Municipal Cocl_e is found through inspection, the permittee may be subject to enforcement action. Permit Abandonment Permittees may choose to abandon their STR permit due to a decision not to rent on a short-term basis, change of permit type, or sale of the STR property. STR permits may be voluntarily abandoned by sending written notice to strs a as"pen gov. At the time of permit abandonment, any current or past due taxes will be required to be paid before the account can be closed. Abandoned permits will not be reissued to the applicant until or unless a new permit application is submitted and a permit is available. Permits that do not meet requirements of Secti®n_6.53o such as annual permit renewal and/or the minimum rental requirement will be considered abandoned by City of Aspen staff. Abandoned permits are not eligible for annual permit renewal. When an STR-C permit is abandoned in a capped zone, and a waiting list for STR-C permits exists in that zone, the permit will be made available to the applicant in the first position on the waiting list for that zone. i1 1rs r City of Aspen Short -Term Rental Guidelines Page 19 56 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Introduction The City of Aspen actively enforces its STR regulations through inspections, citizen complaints, audits, and permitting. These measures ensure that STRs reinforce, not undermine, community policies and character. Active enforcement ensures that visitors who choose to stay in STRs are informed of the unique qualities of mountain living and enhance our community culture by being good visitors and acting as neighbors and community members during their stay. The STR permittee, and if applicable, QOR, play an essential role in supporting and advancing these policies and supporting the City's enforcement activities. Complaints The City of Aspen takes enforcement of STR regulations seriously. If you have a complaint about an STR property, whether permitted or unpermitted, submit your complaint through Aspen 1 _Connect. Upon receiving a complaint, City staff will investigate to determine if a violation of the City's codes, regulations, or laws is occurring. If a violation is identified, the permittee and/or QOR will be contacted for response and resolution. City staff will also follow up with the complaining party. The permittee and/or QOR must respond to all complaints or inquiries from City officials within twenty-four 24) hours of being contacted. If the complaint is from a current occupant, the permittee or QOR must respond to the occupant within two (2) hours of being contacted. Failure of a permittee or QOR to respond to inquiries from either City officials or current renters within these timeframes will result in a notice of violation (NOV) for the permittee and a demand to cure the issue. All valid complaints received for STR properties are kept on file. The City of Aspen is not responsible for complaints against HOA, hotel, or condo -hotel guidelines outside of the City's code, rules, and regulations. The City of Aspen does not interpret, enforce, or manage the applicability, meaning, or effect of private covenants or HOA bylaws. htt To submit a complaint about an STR property, visit: www.aspen.gov/1380/Contact-Us-via-Aspen-311-Connect City of Aspen Short -Term Rental Guidelines Page 20 57 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Violations City staff will take reasonable steps to communicate with STR operators when a code violation is identified; however, in cases where the permittee or QOR is either unresponsive or does not resolve the violation in a time specified by City staff, or at the discretion of the Community Development Director, an Administrative Notice of Violation (NOV) may be issued. If a permitted jo)roper ly G°eceives kGee U3Y s within one (U dV:HH GJU YQj:GjUrevoked. What Constitutes a Violation? The following offenses are grounds for the issuance of a NOV; this list is for illustrative purposes only and is not exhaustive or indicative of all violations that can occur: Failure of a permittee or QOR to respond to a complaint or inquiry from an occupant within two ( 2) hours. Failure of a permittee or QOR to respond to a complaint or inquiry from City officials within twenty- four (24) hours. Failure to adhere to the total allowed occupancy at a unit. Failure to adhere to rental night limits for an STR-00 permit. Failure to clearly display the STR permit number in all advertising and listings of the STR. Failure to provide or update QOR contact information with the Community Development Department within ten (o) days of a change. Failure to comply with applicable life safety standards in i lunic a) Code_Title_8, Failure to display the STR permit, business license, or Good Neighbor Guide in the STR unit. Failure of a permittee or QOR to assist STR occupants in being 'good neighbors' by recognizing their obligation to following the rules and customs of the community as described in the Good Neighbor Guide. Failure to comply with any of the requirements in Section 26.530 or in this STR Program Guidelines document. Advertisement of an STR without a valid STR permit and business license. Any repeat complaint or unaddressed NOV shall Director, City of Aspen Police Department, or the prosecuted, if appropriate. be referred to either the Community Development City of Aspen Attorneys Office and investigated or City of Aspen Short-Terir Rental Guidelines Page 21 58 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Permit Revocation STR permits will be revoked for any of the following reasons: Property sale or transfer of ownership. Failure to renew a permit within fourteen (4) days of the expiration date. Failure to remit permit fees, taxes, or pay fines within a calendar year. Receipt of three (3) NOVs for a property within a calendar year. Failure to rent the property for an entire calendar year (as evidenced by one () year of zero tax filings). Penalties Any permittee that violates or allows another to violate any section of ec c_on 26.530 will be subject to prosecution in Municipal Court and, upon conviction, subject to the fines and penalties set forth in Section o I_.o80. A first offense shall be punishable by a fine of no less than five hundred dollars ($500). Fines for violating any provision of the City of Aspen _Municipal Code or any such ordinance are not to exceed two thousand six hundred fifty dollars ($2,650), imprisonment for up to one () year, or both, at the discretion of the court. Each day of any violation of City of Aspen Municipal Code or ordinance shall constitute a separate offense. The Municipal Judge is empowered in his discretion to assess court costs in an amount of up to fifty dollars ($50) against any defendant who pleads guilty or nolo contenders or who enters into a plea agreement or who, after trial, is found guilty of an ordinance violation. Whenever the judge of the Municipal Court imposes a fine for a nonviolent offense of a municipal ordinance or provision of this Code, if the person who committed the offense is unable to pay the fine imposed for the commission of such offense, in order to guarantee the payment of such fine, the Municipal Judge may compel collection of the fine by requiring the person to post sufficient bond or collateral, requiring the person to post one () or more postdated checks, drafts or orders for the amount of the fine and court costs, if any; or entering a judgment in favor of the City and execute a lien based on such judgment on any chattels, lands, tenements, moneys and real estate of the person in accordance with C.R.S. art. 52 of tit. 3, for the purpose of collecting said fine and the costs incurred in collecting said fine. City of Aspen Short -Tenn Rental Guidelines Page 22 59 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Civil Remedies The City Attorney may institute injunctive, abatement, or other appropriate action to prevent, enjoin, abate or remove a violation of Section 26.530 when it occurs. The same right of action shall accrue to any property owner who may be especially damaged by violation of Section 26,530. Until paid, any delinquent charges, assessments, or taxes made or levied by the City pursuant to this Title shall, as of recording, be a lien against the property on which the violation has been found to exist. If not paid within thirty (30) days from the date of assessment, the City Clerk may certify any unpaid charges, assessments, or taxes to the Pitkin County Treasurer to be collected and paid over by the Pitkin County Treasurer in the same manner as taxes are authorized to be by statute together with a lo% penalty for costs of collection. Any lien placed against the property pursuant to Section 26.530 shall be recorded with the Pitkin County clerk and recorder. Appeals Permittees may appeal decisions or determinations made by the Community Development Director or administrative staff in the enforcement of Section 26.530, the STR regulations. Appeals will be heard by the Administrative Hearing Officer in accordance with Section 26.3ib.o2o(d), which states, "the Administrative Hearing Officer shall have the authority to hear an appeal from any decision or determination made by an administrative official unless otherwise specifically stated in this Title." Appeals will be processed in accordance with Section_ 26.316.030, Appeal Procedures. Appeals of administrative decisions or determinations must be filed with the Community Development Director and with the City office or department rendering the decision or determination within fourteen (4) days of the date of decision or determination being appealed. Failure to file such notice of appeal within the prescribed time shall constitute a waiver of any rights under this Title to appeal any decision or determination. This is not a comprehensive guide to the appeals process. Prior to filing an appeal, the relevant code sections must be reviewed. City of Aspen short -Term Rental Guidelines Page 23 60 Business License Requirement In addition to an STR permit, an STR-specific business license is required for STR operations within the City of Aspen. Pursuant to Section 23.32.020, any entity doing business within the City of Aspen limits, either directly or indirectly, must first obtain a combined Sales Tax and Business License. For this reason, both permittee and QOR (if designated) for any STR-permitted property must obtain an STR Business License from the City of Aspen. Business licenses must be applied for and managed through a user's G-oG account. Business licenses are issued on an annual basis and, like STR permits, expire at the end of each calendar year. Fees for a City of Aspen business license are one hundred fifty dollars ($150) per year and are not prorated regardless of when the license is issued or when the business started. For more information about obtaining a City of Aspen business license, visit: httas://asaen.aov/3 6/®btaininq-A-City-of-Aspen-Business-Lice_n Monthly Tax Reporting Requirement Permittees are required to collect and remit all applicable taxes due from the operation of their STR through M_unirev_s on a monthly basis. The routine monthly deadline for submission of tax returns and/or payment is the 2ot' day of each month, or the following business day if a holiday or a weekend. The City of Aspen does not accept third -party tax payments from platforms such as Airbnb or VRBO. Permittees or their designated representatives must collect and remit taxes from any third -party rental platforms directly to the City of Aspen. Contact as ensalestax(a aspen.gov with any questions. Tax returns and payments must be submitted through the Munirevs account for each STR property each month. City of Aspen short -Term Rental Guidelines Page 24 61 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Munirevs will send emailed reminders to submit tax returns and payments to all users associated with STR accounts each month. The software is also structured to send notifications) if a return and/or payment is not completed by the deadline each month. Because important account notifications are sent to users associated with STR accounts in Munirevs, the City strongly recommends that permittees and/or QORs are listed as users on all STR accounts they own or operate. To grant account access to users, or to verify the users on your STR account, contact asp.ensalestax as en.gov. For more information about submitting tax filings and remitting payments, visit: hops& aspen.gov/1498/MuniReys-Tax-Filing-System-_FAQ Tax Rates, Permit and License Fees Subject to change City of Aspen Short -Term Rental Guidelines Page 25 62 EXHIBIT Short-tel-tn Rental Program Guidelines, as amended. How To Choose The Appropriate Permit Type To determine which permit type is appropriate to apply for, please follow the prompts below. Is my property considered a "lodge" (26.104.110, Use Categories)? You can apply for a STR-LE permit. NO My property is my primary residence, and I can submit fiwo of the following documents indicating that the STR is my primary residence: Valid Colorado driver's license, valid vehicle registration, voter registration, and/or current state/federal tax returns are acceptable proofs of primary residence. Documents must be issued to the permittee and for the STR property address. YES NO You can apply for a STR-00 permit. YES What if I want to rent more than 12o days? You can apply for a STR-C permit. City of Aspen Short -Tenn Rental Guidelines I Page 26 63 EXHIBIT A: Short-term Rental Program Guidelines, as amended. Application Requirements By Permit Type The chart below indicates the information, documents, and processes that are required when applying for specific permit types. Applicants must provide the required application information and supplemental documents below at the time an STR permit application is submitted. STR Property Address x x x Pitkin County Parcel ID Number x x x Pitkin County Owner x x x City of Aspen Zone District x x x Number of Bedrooms x x Number of Permitted Occupants x x Size of Heated Area of the Residence (sqf) x x Number of Units in Lodge Property x Parking Space Location(s) x x x Fire extinguisher Location(s) x x x Day of trash, recycle, and compost pickup x x x URL(s) of Online Advertisement(s) x x x Permittee First and Last name x x Permittee Mailing Address x x Permittee Physical Address x x Permittee Daytime and Nighttime Phone Numbers x x Permittee Email Address x x QOR First and Last Name x x QOR Mailing Address x x QOR Physical Address x x QOR Daytime and Nighttime Phone Numbers x x QOR Email Address x x QOR Entity or Company Name x x Required Supplemental Documents HOA Compliance Affidavit and Letter of Approval x x x Self Inspection Checklist and Affidavit x x x Two (2) Proofs of Primary Residence x Lodging Exempt Affidavit x Neighborhood Notice Required? New permit applications only yes* yes* no City of Aspen Short -Term Rental Guidelines Page 27 64 EXHIBIT A. Short-term Rental Program Guidelines, as amended. How To Submit A New Permit ApplicatioVi City of Aspen STR permits and business licenses must be applied for and managed exclusively through an online permitting and licensing software called Munirevs. Detailed instructions for using Munirevs are available in Section 7 of this document. Follow these steps to submit a new STR permit application: Visit Munirevs and click the "New User -Register" button. Follow the detailed instructions to set up your Munirevs account. If you already have a Munirevs account, skip to step 2. Log in to Munirevs as an "Existing User" with your account credentials. Select "I have a new business and need to apply for a license." Enter the STR property address in the "Business Name" field. Select the STR permit type you like to apply for from the "Business Type" dropdown; the choices are STR-C, STR-00, or STR-LE. Choose your role from the dropdown; the choices are Accountant, Employee, Operator, Other, or Owner. Follow the prompts to complete the permit application form in Munirevs. Upload the required supplemental documents to the application when prompted. Click the "Submit" button to move to the next page. If you need to save and exit the application to complete the documents, you may do so by clicking the blue "Save and Return to Business Center" button at the bottom left of the page. Follow the prompts to pay the permit fee in Munirevs using a credit card or bank account. Click the "Submit" button. An application has been submitted when clicking the "Submit" button returns the user to the Business Center homepage and the application says "Pending Approval" in the open tasks. New permit applications are reviewed by City staff within 5 business days of the submission date. Once the application review is complete, applicants will be contacted with next steps for the application, which could include either a public notice or the addition of their application to a waitlist, depending on the permit type. New STR permits may be applied for at any time during the calendar year. STR permits expire at the end of each calendar year and must be renewed in Munirevs within 14 days of the permit expiration date to remain valid for the following year. Permits not renewed within 14 days of the permit expiration date will be considered abandoned and ineligible for renewal. Anyone may submit an application for an STR permit, however it is important to note that account notifications are sent only to the registered users on an STR property's Munirevs account. If someone other than the permittee applies on behalf of the permittee, it is strongly recommended to add account access for the permittee and QOR once the permit has been issued. Contact strs@a_spen.gov for assistance. 7 Submit a new or renewal STR permit application in Munirevs: https://aspen.munirevs.com. City of Aspen Short -Term Rental Guidelines Page 28 65 EXHIBIT A: Short-term Rental Program Guidelines, as amended. How To Renew An Existing STR Permit All STR permits expire annually on ®ecember 31. If a permittee wishes to continue operating the STR after their permit expires, they must submit an STR permit renewal application through the Munirevs account for the property. Renewal applications become available in the "Open Tasks" of eligible Munirevs accounts on November 15 (or the following business day) each year. TG e annnual dea 9low ® submit STR perrr,Dii U°kN::i1wewC,l applicagi©r n iZ Jnumpicry day) o Supplemental documents must be updated and re -submitted with each STR permit renewal application. Additionally, STR-00 renewal applications require updated proofs of primary residence. All supplemental documents must be signed and dated by the required parties no more than three (3) months before the renewal deadline. STR permit renewals do not require a neighborhood notice. Follow these steps to submit an STR permit renewal application: Log into N1_u_n_irevs as an "Existing User" with your account credentials. Navigate to the "Open Tasks" section of your account. Click into the STR permit renewal application available in the open tasks. Follow the prompts to complete the permit renewal application form in Munirevs. Upload the required supplemental documents to the application when prompted. Click the "Submit" button to move to the next page. If you need to save and exit the application to complete the documents, you may do so by clicking the blue "Save and Return to Business Center" button at the bottom left of the page. Follow the prompts to pay the permit fee in Munirevs using a credit card or bank account. Click the " Submit" button. An application has been submitted for renewal when clicking the "Submit" button returns the user to the Business Center homepage and the application says "Pending Approval" in the open tasks. STR permit renewal applications that are not submitted by the annual deadline date and in accordance with Section 2653o are considered abandoned and are not eligible for renewal. Abandoned permits will be made available to the next applicant on a first -come, first -served basis or to the next applicant on the waitlist for that zone district. It is the permittee's responsibility to ensure their STR permit is renewed in accordance with the permit renewal deadline each year. If the annual permit renewal deadline is missed by a permittee, and the permittee wishes to use their property as an STR, the permittee must submit a new permit application through Munirevs. New permit applications are subject to a neighborhood notice and waitlists for STR-C permits in the order the application was received. Detailed information about renewal application availability and submission deadlines is e-mailed to the addresses on file for the user accounts linked to active STR accounts in Munirevs. The City of Aspen and its City of Aspen Short -Term Rental Guidelines Page 29 66 EXHIBIT A: Short-term Rental Program Guidelines, as amended. employees will not be responsible for missed account deadlines due to lack of account users or inaccurate user information. For more information about Munirevs and user accounts, see Section 7. Contact strs _ aspen.gov with any questions about how to renew an STR permit. City of Aspen Short -Term Rental Guidelines Page 30 67 EXHIPIT Short-term Rental Program Guidelines, as amended. Introduction to Munirevs Munirevs, powered by parent company GovOS, is the software the City of Aspen uses to grant STR permits, business licenses, and collect STR taxes owed to the City of Aspen. Anyone wishing to obtain an STR permit or- business license must register for an account through Munirevs. Once registered and logged in, an application may be submitted for the permit or license directly though Munirevs. Once a permit or license is issued to a user, the user will perform ongoing account maintenance tasks directly through Munirevs. These tasks include submitting monthly tax returns and tax payments, submitting renewal applications for the license or permit at the end of the year, paying for permit or license renewal fees, uploading supplemental documents requested by City staff, updating information about the STR Property or QOR, and more. How to Register for a User Account To register for a user account in Munirevs, follow these steps: Visit https://aspen.munirevs.com. Select "Go" under the "New Users" section. Enter the email address you'd like to register your account with. Verify the email address you entered by opening the email sent from Munirevs. Click the link in the email. Set up a password on the Munirevs website and complete your user profile information. Once your account is created, you will be asked if you have an existing business license OR if you have a new business and need to apply for a license or permit. For assistance with registering for a Munirevs account, contact: aspensalestax a aspen.gov. City of Aspen Short -Term Rental Guidelines Page 31 68 EXHIBIT A: Short term Rental Program Guidelines, as amended. User Account Information Once a user has registered for a user account in Munirevs, they can either submit a new application for a permit or license, or link to an existing business account. A user may be linked to more than one business account. The ability for a single user to In to multiple business accounts is helpful in situations where one person is the QOR for multiple STR properties, or where one person is responsible for submitting applications for multiple properties, or a single accountant manages taxes for more than one STR property. In any case, it's important that all stakeholders in any single STR business are registered as users on the Munirevs account for that property. The City of Aspen sends time -sensitive notices about permit renewals and tax filing deadlines to users linked to each STR account. Having multiple users registered for each STR account, though not required, helps ensure that notifications are received and responded to accordingly. It i strongly r©r rr endea G; rir itte aa c 9 ®° are liste 9 as :sers for all Munirevs V acc®ants ;Gaey are assoeiated witG o G is eaeG .r,a' G°p®nsibili go ensure their a -mail address i updat c9 in their Munirevs profile. The City of Aspen and its employees will not be responsible for missed account deadlines due to lack of account users, inaccurate user information, or non -receipt of courtesy notifications and reminders. All license, permit, and tax deadlines are outlined and enforced based on Municipal Code requirements. How to Link a User Account to an Existing Business Account If you have registered for a user account in Munirevs and want to link your user account to an existing business account for an STR property, follow these steps: Visit http as_p_en.munirevs.com and log into your user account. Once logged in, scroll to the section of your "Business Center" that says "Manage Your Account(s)." Click "Add or Remove accounts from your user login by clicking here." Click "I already have an existing business license." Enter the account's 6-digit license number and 6-digit activation code in the boxes. Click "lookup" to link to the account. Account numbers and activation codes are specific to each business account in the Munirevs system. If you do not know the account number and/or activation code for an account, please contact the owner/administrator of the account. For assistance finding these codes on your own account, please contact aspensalestax(c aspen.gov or STRs as epn•gov. Permission from an account owner will be required to share their activation code with any person not listed on the account. City of Aspen Short-Terir Rental Guidelines Page 32 69 EXHIBIT A. Short-term Rental Program Guidelines, as amended. Notifications and Open Tasks Munirevs sends e-mail "notifications" to users linked to STR business accounts. Notifications contain important information such as permit or license renewal deadlines, monthly tax reporting reminders, messages about program compliance, and more. These courtesy e-mail notifications are sent only to users linked to existing business accounts, and only to the e-mail address provided by the user in their user profile. Notifications alert users when there are "open tasks" on their STR business account(s)0 Open tasks are items that require the user's attention, such as tax forms, pending applications, returned payments, or other tasks assigned by City staff that must be completed by the user. Open tasks require a prompt response from account users, and if left unattended to, could result in late fees or permit abandonment. Open tasks should always be completed immediately. If you have questions about open tasks on your account, contact aspensalestaxCo aspen.gov. How to Access a Permit or License Document Munirevs users linked to STR business accounts have easy access to the active permit and license documents on those accounts. To access a permit or license on a Munirevs account, follow these steps: Visit https://aspen.munirevs.com and log into your user account. Click "Business Center" on the top left of the screen. Scroll down to the "Manage Your Account(s)" section and click the account you'd like to access. Find the "Licenses" section on the right side of the screen. Click the PDF icon next to any active license or permit to access the document (note: the license must be in Active status to access the document). Print or save the document to your device. For more Information about Munirevs_, please visit: htt s: aspen.goy/1498/Mun*RevsmTax-Filing-System---FAQ City of Aspen Short -Term Rental Guidelines Page 33 70 EXHIBIT A: ShortAerm Rental Program Guidelines, as amended. 71 1 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Emmy Oliver, Lodging and Commercial Core Program Manager THROUGH: Ben Anderson, Community Development Director MEMO DATE: February 18, 2025 MEETING DATE: February 24, 2025 RE: City Council Work Session Review of the Short-term Rental (STR) Program REQUEST OF COUNCIL: The purpose of this work session is to review Short-term Rental (STR) Program data, respond to Council’s questions about the STR Program, and to introduce policy topics for which Council may wish to explore Land Use Code (LUC) changes. Staff requests consensus Council direction for any STR program changes the Council desires for staff to pursue. SUMMARY AND BACKGROUND: In December of 2021, following an unprecedented expansion of the Aspen STR market during Covid-19, City Council passed Ordinance #26, Series of 2021, which instated a moratorium on the issuance of new STR permits (Exhibit A, Ordinance #26, Series of 2021). The moratorium was a direct response to escalated community concerns about the proliferation of STRs. Lasting approximately ten months, the moratorium provided space for staff to closely engage with the community and Council in the development of new regulations governing STRs in Aspen. At the beginning of the moratorium, five “problem statements” were identified by Council (Memo_Second Reading of Ordinance #09, Series of 2022). These problem statements guided staff’s work in developing the new STR policy: 1) STRs are a land use distinct from residential and lodge uses. Yet land use regulations do not make that distinction. This results in a variety of inequities and community impacts which our current system fails to address. 2) Aspen has not sought to mitigate the impacts of STRs on employee generation and other infrastructure and service demands. 3) The community has not established review criteria to ensure basic health and safety standards for individual STRs, or to provide common expectations related to property management and guest behavior standards. 4) The scale and rapid expansion of STRs are changing the nature of important aspects of neighborhood and community character in ways that we are just beginning to understand. It is clear that some STRs are operating as commercial uses in dedicated residential zone districts. 5) STRs, particularly in multi-family developments, have accelerated the transition of many housing units that previously were owned or rented by working locals into de facto lodge units. The displacement of locals from these units over time is not a new trend, but STRs have brought a new scale and pace to this challenge. 72 2 On June 28, 2022, Council adopted the new set of STR regulations in Ordinance #09, Series of 2022 (Exhibit C, Ordinance #09, Series of 2022). Ordinance #09 established definitions for STRs, a three-permit system, caps on STR-C permit availability, permitting requirements and fee structure, occupancy and operational standards, active enforcement, and a non-transferability clause. Staff began operating under the new regulations on October 1, 2022. In addition to the new land use regulations, City of Aspen voters approved excise taxes on STR revenue as codified in Resolution #106, Series of 2022 (Exhibit D, Resolution #106, Series of 2022). The following excise tax rates became effective for all STR stays commencing on or after May 1, 2023: • STR-C (investment properties): 10% excise tax • STR-OO and STR-LE (primary resident and lodge properties): 5% excise tax Council requested periodic updates about program functionality. Up to now, staff have provided those updates in the form of information-only memos. This will be the first Council Work Session to discuss performance and policy topics since the launch of the program. Essential Program Data Figure A. Annual STR Excise Tax Revenue by Permit Type Figure A shows STR excise tax revenue collected in 2023 and 2024. It is important to note that that 2023 figures only reflect eight (8) months of collections, and that December 2024 figures reflect unaudited collections and are still subject to change. STR-OO and STR-LE figures are combined because the tax rate is 5% for each of those permit types. STR excise tax revenue collected in 2023 totals $3,393,571. STR excise tax revenue collected in 2024 totals $6,937,942. STR excise tax revenue collected to date totals $10,331,513. $2,383,903 $1,009,668 $4,853,907 $2,084,035 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 STR-C STR-OO & LE 2023 2024 73 3 Figure B. Allocation of STR Excise Tax Revenue (2023-2024 combined) Aspen voters approved at least 70% of the STR excise tax revenue to be allocated to affordable housing development, and the remaining 30% to be allocated to environmental initiatives and infrastructure maintenance and repair. Of the remaining 30% of revenue, 75% is allocated to the Asset Management Plan Fund and 25% to the General Fund. Figure B illustrates the allocation of combined tax revenue from 2023 and 2024 to these City funds to date. Figure C. Annual Administrative Fee Revenue Figure C illustrates the administrative fee totals collected in 2023 and 2024. Administrative fees are paid by the applicant at the time a STR permit application is submitted. Asset Management Plan Fund $2,324,590 General Fund $774,864 Housing Development Fund $7,232,059 $422,120 $377,698 $0 $100,000 $200,000 $300,000 $400,000 $500,000 2023 2024 74 4 Figure D. Allocation of STR Administrative Fee Revenue (2023-2024 combined) Figure D shows how the administrative fees are allocated within the City organization. Revenue is split between Community Development, Finance, and the City Attorneys for staff labor. Administrative fees also offset the cost of the permitting and tax collection software utilized by customers and staff. Figure E. Number of STR Units from 2023-Present Figure E depicts the number of STR unit types from 2023 to present. A slight decline in all property types can be seen from 2023-2025, culminating in an 89% renewal rate for Classic properties, a 97% renewal rate for Lodging Exempt properties, and an 83% renewal rate for Owner Occupied properties. Overall, there has been an 8.9% decline in the total number of STRs since 2023. The decline can be attributed to some of the following factors: • Switch to long-term rentals, • Forfeiture of permits due to property sales, • Attrition of permits in capped zones, and • Decisions to stop renting on a short-term basis. City Attorney's Office $142,648 Finance Department $206,139 Community Development Department $451,031 740 392 76 698 385 72 658 379 63 0 100 200 300 400 500 600 700 800 STR-C STR-LE STR-OO 2023 2024 2025 75 5 STAFF DISCUSSION: During a November 2024 Council meeting, Councilors posed a series of questions to staff about the STR program. Answers to those questions follow. Question 1: In response to the Frias Properties representative’s public comments about the HOA signoff required for annual permit renewal, is there a way to simplify that process? Language requiring HOA approval was adopted in Ordinance #09, Series of 2022: “Permit applications for residential properties which are in a Homeowners Association (HOA) must include HOA approval for the applicant to operate an STR in the form of a signed letter, including telephone and email contact information for the HOA, with the permit application.” (Exhibit C, Ordinance #09, Series of 2022) Currently, a signature from an HOA representative is required with each new permit application, and updated signatures are required for annual permit renewal. Annual HOA signoffs are required by staff because HOAs have been known to change their STR permissions from year to year. Certainly, if Council directs staff to adjust the HOA signoff for renewal applications, staff could explore paths to ease the burden on HOA managers and simplify the permit renewal process. Question 2: Regarding outstanding applicants in the different zone districts, help us better understand what the STR market and those seeking permits that aren’t able to get them mean? Review the caps and outstanding applicants in different zones. What happens to people who apply but permits are unavailable? Ordinance #09 established limits on the maximum number of STR-C permits available in 14 of Aspen’s residential-serving zone districts (Exhibit C, Ordinance #09, Series of 2022). The purpose of the limits (AKA “caps”) is to curtail neighborhood impacts of STRs, limit conversion of long-term and owner-occupied housing to STRs, and distribute STR uses within appropriate zones throughout the community. Caps do not apply to STR-OO or STR-LE permits. Figure F: Permit Cap Analysis (as of 2/14/25) 0 0 0 46 0 5 0 1 0 4 0 0 0 00 20 40 60 80 100 120 140 160 180 200 AH MU NC R/MF R/MFA R-15 R-15A R-15B R-3 R-30 R-6 RR SCI SKI Permit Cap # Active Permits # Applications on Waitlist 76 6 Figure F illustrates the numbers of active and waitlisted STR-C accounts in all 14 (fourteen) capped zones, alongside the cap for each zone. There are currently waitlists for STR-C permits in 4 (four) of the fourteen (14) capped zones. Waitlist totals are shown by the numbers along the horizontal axis in Figure F. In 6 (six) of the 14 (fourteen) capped zones, the number of active permits is equal to the permit cap. When an STR-C permit application is received for a property in these zones, it is placed on a waitlist for the next available permit, which would be issued when an existing permit is relinquished by the owner. In 5 (five) of the fourteen (14) of capped zones, the number of active permits is less than the permit cap. STR-C permits are currently available to applicants without a waitlist in these zones. In 3 (three) out of fourteen (14) zones, the number of active permits is greater than the cap. In these zones (R/MF, R-30, and SCI), permits that predate the moratorium have not yet been reduced to the caps through attrition. Applications for STR-C permits are placed on waitlists in these zones, and new permits will be available once the number of active permits falls below the caps. Figure G. STR-C Waitlist Sizes, 2022-2025 Figure G illustrates the fluctuations in waitlists for STR-C permits. The R/MF waitlist, indicated by the line climbing steadily at the top half of Figure G, is the obvious outlier. Staff received twenty- 0 5 10 15 20 25 30 35 40 45 50 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 R-6 R-15 R-15B R-30 R/MF 77 7 two (22) applications for STR-C permits in R/MF zone within the first two (2) months of the program, and the waitlist has increased to forty-six (46) applications since 2022. The R-30 waitlist has also only increased in size since 2022; there are four (4) applicants on this waitlist currently. Due to the slow rates of permit attrition in these zones, no new permits have been issued in R-30 or R/MF since 2022. Dips in the lines, as shown for R-6, R-15, and R-15B zones, indicate reductions in the waitlist size at points when permits became available to applicants in the top positions for those zones. Question 3: Regarding STR violations, how many have been issued, what are the nature of the violations, where were they located, and were they licensed? Staff follows the City’s policy of progressive enforcement in responding to STR issues. In alignment with this policy, staff must first validate any alleged compliance issue before proceeding through enforcement steps. When an issue is validated, staff works with owners to educate them about how to come into compliance through a series of courtesy contacts and, if necessary, formal warnings. If the issue is not corrected after outreach and a formal warning, only then will a Notice of Violation (NOV) be issued to the property owner. The NOV is the last step in the enforcement process before a summons to court, fines, and/or jail time is imposed. Figure H. STR Compliance Summary, 2022-2025 The purpose of progressive enforcement is to encourage compliance through education rather than to impose punitive measures. As shown in Figure H, only 6% of alleged compliance issues at STR properties have resulted in NOVs. A total of three (3) NOVs have been issued to property owners for STR issues. While all the subject properties have subsequently come into compliance, details of those NOVs are as follows: • Two (2) for unpermitted STR use (R-6 and R/MF zones), and • One (1) for improper waste disposal that resulted in a wildlife intrusion at an STR- permitted property (R-6 zone). 0 10 20 30 40 50 60 # Issues Identified # Courtesy Outreach Contacts # Warnings Issued # Notices of Violation Issued 78 8 Figure I. Number of STR Compliance Issues Reported, 2022-2025 The public can report STR issues directly to City staff through the Aspen 311 Connect app. Staff also utilize active measures, such as reviewing internet advertisements, to detect issues at STR properties. As shown in Figure I, of the fifty-three (53) total compliance issues identified since 2022, 26% of those issues were nuisance-related (noise and smoke). Figure J. STR Compliance Issues by Zone District, 2022-2025 Figure J depicts the number of compliance issues reported per zone district. 81% of all issues were reported to have occurred in zones that are capped for STR-C permits. The majority of issues were reported for properties in the AH zone, however it should be noted that reports in AH were primarily for lighting- and nuisance-related issues at free-market properties. Question 4: How do STR tax collections compare to 2022 estimates? As mentioned previously, Aspen voters approved the STR excise tax in 2022 (Exhibit D, Resolution #106, Series of 2022). While estimating potential revenue for the first full year of the proposed tax, staff in 2022 were required to make many assumptions of the 2024 pool of STR permits, including: • The average nightly rental rate in 2024, 14 12 11 8 3 3 1 1 Nuisance No Permit Wildlife Intrusion Lighting Renter Complaint Waste Container HOA Approval Snow Removal 0 2 4 6 8 10 12 14 16 AH R-6 L R/MF MU R-15 R-15B R-30 79 9 • The distribution of STR-LE, STR-OO, and STR-C permits, • The number of permits in uncapped zones, • The pace of permit attrition in capped zones, and • The economic conditions that would exist in 2024. Staff added a buffer to the estimate of revenue to reflect these and other unknown factors, as well as to limit the need to seek additional direction from voters if collections surpassed an estimate that was too low. The 2022 estimate of 2024 STR excise tax collections combined from all three permit types was $9,140,000. The 2024 actual STR excise tax collections totaled $6,937,942. Question 5: Should we have an equal tax rate across all rentals of less than 30 days? Could the program be more successful if we rethought some initial assumptions about tax rates? Council considered the following factors when landing on differential tax rates for the three types of STR permits: • Community sentiment, • Delta in property taxation between residential and commercial properties, and • Delta in housing mitigation fees paid at time of development of commercial lodge properties. Prior to the 2022 STR tax ballot question, Frederick Polls conducted voter polling to understand voter acceptance of a new tax, the preferred taxation rate(s), and possible supported uses for the revenue. Of the 322 registered voters polled, 65% wanted investor-owned rentals (STR-C permits) to be taxed at a higher rate, while 35% of respondents wanted all STR permits to be taxed at the same rate. This community sentiment aligned with staff and consultant recommendations for STR-LE properties, which were historically used as lodge properties and had already paid affordable housing mitigation, to be taxed at a lower rate than properties with STR-C permits. STR-OO permits, which are intended for full time residents as an occasional source of supplemental income, also fell into the lower tax category since their community impacts would be less than those of the STR-C permits. Question 6: What are we learning about what's falling through the cracks? There's a way to create 31-day lease; is there any way to evaluate how much of that is happening? What are people doing to get around our regs? Short-term rentals are differentiated from long-term rentals by the length of stay. STRs are defined by stays of 29 days (or less) at a time, while rentals of 30 days (or more) at a time constitute long- term rentals. Long-term rental income is tax exempt, and while the City requests that long-term rental income is reported, the number of rental days per year is not a requirement for reporting. Long-term rental business licenses have increased overall in recent years, however it is difficult to assess whether the increase is due to an increase in long-term activity, an increase in reporting frequency, or an increase in compliance with licensing requirements. It should also be noted that some STR accounts hold long-term rental business licenses and STR permits at the same time. For these reasons, it is difficult to conclude that owners are scheduling long-term rentals in lieu of STRs. 80 10 Staff have received reports from members of the public about properties being rented as STRs without permits, however without definitive evidence that an STR is occurring (such as an advertisement for rental of less than 30 days), staff is unable to successfully pursue enforcement in those instances. As mentioned previously, staff have validated two instances of STRs occurring without permit. Those two properties were issued NOVs and have since come into compliance. Question 7: Is there empirical data to show how the program is preserving or generating housing for primary residents? It was an initial goal of the program. Can we demonstrate any results? In many communities pursuing STR regulation, the clearly stated desire has been to try to protect housing for locals. Due to the nature of Aspen's real estate and residential markets, it was clearly understood at the time Ordinance #09 was passed that the intentions were not to preserve actual housing units, but instead to reduce and mitigate the impacts of the STR as a growing land use type on the community. From problem statement 5, “STRs, particularly in multi-family developments, have accelerated a transition of many housing units that previously were owned or rented by working locals into de facto lodge units. The displacement of locals from these units over time is not a new trend, but STRs have brought a new scale and pace to this challenge.” Data to understand correlation from problem statement number 5 is hard to draw conclusions from, however staff would reference the low number of enforcement cases against STRs as evidence that community impacts are being mitigated. Though the program does not directly preserve or generate housing for locals, 70% of STR excise tax revenue is allocated to funding affordable housing for locals ($7,232,059 to date). These funds are direct contributions to the cost of housing stock for primary residents. STAFF OBSERVATIONS AND REQUESTS FOR DIRECTION Over the last two years of program operation, staff have identified several recurring and potentially problematic themes within the STR regulations. The following topics are the primary sources of concern for program participants (and in some cases, staff). Staff requests Council majority direction as to Council’s desire to explore code updates for the following topics. Non-Transferability Language STR permits may only be issued to one individual owner with at least 10% interest in the STR property. Permits are non-transferable to other individuals or properties and are terminated and revoked upon a property sale. Non-transferability provisions support the attrition of permits in capped zones and subsequent movement of applications on waitlists, and they give new property owners a chance to obtain a permit where they may otherwise be monopolized if transfers were allowed between owners. Non-transferability of permits is a major concern for permittees engaged in estate planning. Many married couples rely heavily on income from STR properties, and if a spouse who is named on an STR permit passes away, the surviving spouse must apply to obtain an entirely new permit and could be subject to waiting periods for such permit. Staff have received frequent requests for the ability to transfer an STR permit to the surviving spouse in the event of the death of a permittee. Question 1 for Council: Does Council desire to update non-transferability language so that a permit may be transferred to a spouse in the event of death of the permit holder? 81 11 Permit Cap in R/MF Zone The R/MF zone has the largest waitlist of any capped zone (see Figure G). Due to the slow rate of permit attrition in R/MF, staff estimates it may take up to two more years until a STR-C permit becomes available to the first applicant on the waiting list for permits in R/MF. Staff often receive questions from real estate professionals and potential buyers about whether the limits on the number of STR-C permits will be raised or eliminated altogether in the R/MF zone due to the slow rate of attrition and related large waitlist size. Question 2 for Council: Does Council wish to adjust or eliminate the cap on STR-C permits in the R/MF zone district? Permit Application Requirements: Public Notice and HOA Affidavit To help mitigate the impacts of STRs on surrounding properties, all new STR properties must complete a public notice prior to approval of the permit. Notices are posted on STR properties and mailed to surrounding neighbors. Staff has received feedback that the mailing of notices produces excessive paper waste, and that notices should be sent virtually instead of through paper mail (though virtual notice is not permitted by the land use code). Property owners receiving notices in uncapped zones, where STR activity is heavily concentrated, have indicated that notices are entirely unnecessary because STR activity is both assumed and widespread. STR code does not delineate between sending notices in some but not all zone districts. Question 3 for Council: Does Council desire to revise the public notice requirement to exempt properties in zones where caps on STR-C permits do not exist? An HOA affidavit is a required submission with any STR permit application. The affidavit notifies an HOA that an owner is applying for STR permit, and it absolves the City of interpreting or applying HOA rules. If a property is subject to an HOA, the signature of an HOA member is required on the affidavit. Staff and Council have heard requests that this requirement be adjusted or removed altogether as it produces a significant burden on managers of large HOAs during the annual permit renewal process. Question 4 for Council: Does Council wish to eliminate the need for the signature of an HOA member on STR permit renewal applications? Tax Filing Requirement STR owners must demonstrate that they have utilized their STR permit at least once per calendar year to be able to renew their permit for the following year. Permit use is verified via an account’s tax filings when an owner applies to renew the permit, and accounts with $0 in tax filings are ineligible to renew the permit. This policy encourages owners to obtain permits only when necessary, and helps ensure that attrition of permits occurs in zones where permits are limited, and waitlists may be in effect. Some STR owners have expressed frustration at the inability to utilize their permits while their property is under construction for renovation. These owners have requested exemptions from this rule, so they do not forfeit a permit due to upgrading the property and being unable to take rentals during that time. The STR code does not provide any exemptions for tax filing requirements. 82 12 Question 5 for Council: Would Council like to revise the tax filing requirement to exempt permitted properties that are under construction and unable to engage in short-term rentals for an entire calendar year? Advertising Platform Accountability The majority of staff’s active enforcement work involves the attempt to identify illegal STRs in the community. To achieve this, advertisements on internet rental platforms are reviewed to verify that the properties are permitted. To aid in the identification of permitted properties, STR operators are required to post STR permit numbers in all ads of the property. STR permit numbers are absent from approximately 40% of online STR advertisements in Aspen. Also absent from many of the same ads is identifying information for the property owner or address, which makes verification of the legality of the STR extremely difficult. Even though the property owner is responsible for compliance with these requirements, in many cases, staff cannot identify the owner to hold them accountable. A handful of Colorado municipalities are combatting this issue by holding advertising platforms accountable for publishing only compliant advertisements on their websites. In these instances, when a municipality finds an STR ad that is out of compliance with its regulations, staff contact the website directly to request that the ad is either brought into compliance or removed from the site. Staff are confident that the overall compliance of internet advertisements (and illegal STR advertisements) would increase dramatically if Aspen adopted a similar approach. Question 6 for Council: Is Council open to revising Aspen’s requirements to hold STR booking platforms accountable for posting only ads that clearly show valid STR permit numbers for the STR property? “Run Out” Period for STR Bookings Non-transferability language in Ordinance #09 states that STR permits are forfeited upon the sale of a property and may not be transferred to a new owner when a property transaction occurs. One issue noted consistently by the rental community is that when a STR property sells, and the seller has pre-existing binding contracts for rentals that begin after the sale of the property, there is no mechanism for the new property owner to honor the contracts made by the previous owner. Rental professionals have often asked for a “run-out” period or permit type to allow new property owners to honor contracts from the old owners. Potential consequences of these situations for the seller and new buyer include financial liability to their customers, damage to the reputation of rental agencies involved, and compliance issues for new property owners choosing to honor the existing rentals before a permit is rightfully obtained. This topic was presented during a Council Work Session in 2022 at the request of the lodging community (Exhibit F, Memo_STR Run-out Work Session). A Council majority decided that the City should not be the arbiter of such situations involving property transactions and contracts that the City is not a party to. Staff continues to believe that regulating these “run-out” instances puts the City in a difficult situation to evaluate the unique circumstances of each situation, and that offering a “run-out” period for each permit would raise equity issues for applications that have been on waitlists for permits. Due to the frequency with which these “run-out” questions are received, staff is noting this issue purely for Council’s awareness. 83 13 POLICY / REGULATORY TOPICS IN SUMMARY: Staff desires a Council majority position on each of these topics for further staff exploration and possible future code amendments: 1. Does Council desire to update non-transferability language so that a permit may be transferred to a spouse in the event of death of the permit holder? 2. Does Council wish to adjust or eliminate the cap on STR-C permits in the R/MF zone district? 3. Would Council like to revise the public notice requirement to exempt properties in zones where caps on STR-C permits do not exist? 4. Does Council desire to eliminate the need for the signature of an HOA member on STR permit renewal applications? 5. Would Council like to revise the tax filing requirement to exempt properties that are under construction and unable to engage in short-term rentals for an entire calendar year? 6. Is Council open to revising compliance requirements to hold STR booking platforms accountable for posting only compliant ads that show permit numbers for the STR property? Are there any other topics not listed here that a Council majority would like to explore further? CITY MANAGER COMMENTS: EXHIBITS: Exhibit A – Ordinance #26, Series of 2021 Exhibit B – Memo_Second Reading of Ordinance #09, Series of 2022 Exhibit C - Ordinance #09, Series of 2022 Exhibit D - Resolution #106, Series of 2022 Exhibit E – Memo_STR Tax Polling Results and Next Steps Exhibit F – Memo_STR Run-out Work Session 84 RESOLUTION #077 SERIES OF 2025 A RESOLUTION OF THE CITY OF ASPEN CITY COUNCIL ADOPTING POLICIES AUTHORIZING AMENDMENTS TO THE LAND USE CODE RELATED TO SECTION 26.104.100 - DEFINITIONS AND SECTION 26.530 - SHORT-TERM RENTAL REGULATIONS WHEREAS, pursuant to Section 26.310.020(A), a Policy Resolution is required to initiate the process of amending the City of Aspen Land Use Code; and, WHEREAS, Section 26.104.100, Definitions; Section 26.530, Short-term Rental Regulations; and other sections of the Land Use Code, as necessary, will be proposed for amendments; and, WHEREAS, pursuant to Section 26.310.020(A), during a regular City Council meeting on December 14, 2021, City Council adopted Ordinance #026, Series of 2021, by a unanimous affirmative vote placing, a moratorium on the issuance of new short-term rental (STR) permits until September 30, 2022; and, WHEREAS, during a regular meeting on March 22, 2022, City Council adopted Policy Resolution #043, Series of 2022, directing staff to develop regulations for STRs related to zoning, good neighbor policies, operational standards, life safety standards, permitting, financials, and enforcement; and, WHEREAS, during a regular meeting on June 28, 2022, City Council approved Ordinance 09, Series of 2022 at Second Reading by a unanimous affirmative vote, establishing a robust set of regulations governing the licensing, permitting, capping, inspecting, enforcing, and creation of a new fee structure for services performed for STRs; and, WHEREAS, Ordinance #09, Series of 2022 became effective on July 29, 2022, and at the expiration of the moratorium created by Ordinance #026, Series of 2022, the City began issuing new STR permits on October 1, 2022; and, WHEREAS, during a Work Session on February 24, 2025, staff updated City Council on the STR program, and during that meeting received majority direction from City Council to proceed with exploring policy updates for administrative topics and future policy related topics related to streamlining STR permit application requirements, increasing compliance with existing regulations, providing exemptions for unique circumstances unaccounted for in the current STR regulations, and the R/MF Zone District permit cap number; and, WHEREAS, amending the Land Use Code as described below will ensure the ongoing effectiveness, coordination, and viability of the regulations within the City of Aspen Land Use Code; and, Resolution #077, Series of 2025 Land Use Code Amendments Policy Resolution Page 1 of 4 85 WHEREAS, pursuant to Section 26.310.020(B)(1), the Community Development Department, following approval of this Policy Resolution, will conduct a limited public outreach effort to inform the public, STR program participants, the Historic Planning Commission, the Planning and Zoning Commission, and members of the STR Technical Advisory Committee of the proposed updates; and, WHEREAS, pursuant to Section 26.310.020(B)(2), during a duly noticed public hearing on June 24, 2025, the City Council approved Resolution #077, Series of 2025, by a five to zero (5-0) vote, requesting a code amendment to the Land Use Code; and, WHEREAS, this Resolution does not amend the Land Use Code, but provides direction to staff for amending the Land Use Code; and, WHEREAS, the City Council finds that this Resolution furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN AS FOLLOWS: Section 1 City Council approves the following objectives for possible code amendments: 1. Streamline the STR permit application process and provide increased clarity and detail around application requirements. a. Modify the public notice requirements for new STR permit applications when the property is in a Zone District that does not have a cap on the number of available STR permits. Updated requirements would remove the mailing notice and require a poster notice only (Section 26.530.040 - Permit Procedures and Standards). b. Eliminate the requirement for a signed letter from a property's Homeowner's Association (HOA) on annual STR permit renewal applications Section 26.530.040 - Permit Procedures and Standards). c. Add language to specify that STR permit renewal applications must be complete to be accepted by the City (Section 26.530.040 - Permit Procedures and Standards). Add language stating that falsification of information on STR permit applications is against municipal law (Section 26.530.060 - Enforcement). 2. Provide exemptions for unique circumstances that are not accounted for in current STR regulations. a. Modify the tax filing requirement to provide a one-time exemption for permittees with active building permits. Provide an additional exemption to the tax filing requirement for "act of nature" emergencies. (Section 26.530.040 - Permit Procedures and Standards). Resolution #077, Series of 2025 Land Use Code Amendments Policy Resolution Page 2 of 4 86 b. Modify the non -transferability clause to provide an exemption in the case of permittee death, whereby a deceased's STR permit may be transferred to a person designated on the permittee's estate planning documents (26.530.030 - Permitting Requirements and 26.530.040 - Permit Procedures and Standards). c. Create a fourth Short-term Rental Temporary (STR-T) permit type that allows a new property owner to honor STR booking agreements made by the previous property owner for a period of not more than three (3) months after the sale of the property has occurred (26.530.030 - Permitting Requirements, 26.530.040 - Permit Procedures and Standards, 26.530.050 - Occupancy and Operational Standards). 3. Increase compliance with and provide additional avenues for enforcement of existing STR advertising requirements. a. Add definition for "Vacation Rental Service" (26.104.100 -Definitions). b. Add language requiring Vacation Rental Services to take down advertisements of STRs located within the City of Aspen that do not comply with the City's STR advertising requirements (26.530.050 - Occupancy and Operational Standards). c. Add language requiring Vacation Rental Services to enable a mandatory permit number field on STR advertising templates for properties in the City of Aspen, where applicable (26.530.050 - Occupancy and Operational Standards). d. Create a new code subsection that clearly outlines existing permittee advertising requirements in addition to Vacation Rental Service advertising requirements (26.530.050 - Occupancy and Operational Standards). e. Correct the misspelling of "complaint" (26.530.060 - Enforcement). 4. Allow for future amendments related to the R/MF Zone District. Section 2• This resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the resolutions or ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior resolutions or ordinances. Section 3: If any section, subsection, sentence, clause, phrase, or portion of this resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. FINALLY, adopted this 24th day of J ne, Rachael ichards, Mayor Resolution #077, Series of 2025 Land Use Code Amendments Policy Resolution Page 3 of 4 87 ATTESY: APPROVED AS TO FORM: Nicole Henning, City Clerk K harme Joh City Attorney Resolution #077, Series of 2025 Land Use Code Amendments Policy Resolution Page 4 of 4 88 TO: FROM: THROUGH: MEMO DATE: MEETING DATE: RE: MEMORANDUM Mayor Torre and Aspen City Council Emmy Oliver, Lodging and Commercial Core Program Manager Ben Anderson, Community Development Director February 18, 2025 February 24, 2025 City Council Work Session Review of the Short-term Rental (STR) Program REQUEST OF COUNCIL: The purpose of this work session is to review Short-term Rental (STR) Program data, respond to Council's questions about the STR Program, and to introduce policy topics for which Council may wish to explore Land Use Code (LUC) changes. Staff requests consensus Council direction for any STR program changes the Council desires for staff to pursue. SUMMARY AND BACKGROUND: In December of 2021, following an unprecedented expansion of the Aspen STR market during Covid-19, City Council passed Ordinance #26, Series of 2021, which instated a moratorium on the issuance of new STR permits (Exhibit A, Ordinance #26, Series of 2021). The moratorium was a direct response to escalated community concerns about the proliferation of STRs. Lasting approximately ten months, the moratorium provided space for staff to closely engage with the community and Council in the development of new regulations governing STRs in Aspen. At the beginning of the moratorium, five "problem statements" were identified by Council Memo _Second Reading of Ordinance #09, Series of 2022). These problem statements guided staff's work in developing the new STR policy: 1) STRs are a land use distinct from residential and lodge uses. Yet land use regulations do not make that distinction. This results in a variety of inequities and community impacts which our current system fails to address. 2) Aspen has not sought to mitigate the impacts of STRs on employee generation and other infrastructure and service demands. 3) The community has not established review criteria to ensure basic health and safety standards for individual STRs, or to provide common expectations related to property management and guest behavior standards. 4) The scale and rapid expansion of STRs are changing the nature of important aspects of neighborhood and community character in ways that we are just beginning to understand. It is clear that some STRs are operating as commercial uses in dedicated residential zone districts. 5) STRs, particularly in multi -family developments, have accelerated the transition of many housing units that previously were owned or rented by working locals into de facto lodge units. The displacement of locals from these units over time is not a new trend, but STRs have brought a new scale and pace to this challenge. 89 On June 28, 2022, Council adopted the new set of STR regulations in Ordinance #09, Series of 2022 (Exhibit C, Ordinance #09, Series of 2022). Ordinance #09 established definitions for STRs, a three -permit system, caps on STR-C permit availability, permitting requirements and fee structure, occupancy and operational standards, active enforcement, and a non -transferability clause. Staff began operating under the new regulations on October 1, 2022. In addition to the new land use regulations, City of Aspen voters approved excise taxes on STR revenue as codified in Resolution #106, Series of 2022 (Exhibit D, Resolution #106, Series of 2022). The following excise tax rates became effective for all STR stays commencing on or after May 1, 2023: STR-C (investment properties): 10% excise tax STR-00 and STR-LE (primary resident and lodge properties): 5% excise tax Council requested periodic updates about program functionality. Up to now, staff have provided those updates in the form of information -only memos. This will be the first Council Work Session to discuss performance and policy topics since the launch of the program. Essential Program Data 8,000,000 7,000,000 4,8531907 6,000,000 5,000,000 4,000,000 3,000,000 2,084,035 2,383,903 z,000,000- 15009,668 1,000,000 0 STR-C STR-00 & LE 2023 1,12024 Figure A. Annual STR Excise Tax Revenue by Permit Type Figure A shows STR excise tax revenue collected in 2023 and 2024. It is important to note that that 2023 figures only reflect eight (8) months of collections, and that December 2024 figures reflect unaudited collections and are still subject to change. STR-00 and STR-LE figures are combined because the tax rate is 5% for each of those permit types. STR excise tax revenue collected in 2023 totals $3,393,571. STR excise tax revenue collected in 2024 totals $6,937,942. STR excise tax revenue collected to date totals $10,331,513. 2 90 Housing Development Fund 7,232,059 Asset Management Plan Fund 25324,590 Iqk General Fund 774,864 Figure E. Allocation of STR Excise Tax Revenue (2023-2024 combined) Aspen voters approved at least 70% of the STR excise tax revenue to be allocated to affordable housing development, and the remaining 30% to be allocated to environmental initiatives and infrastructure maintenance and repair. Of the remaining 30% of revenue, 75% is allocated to the Asset Management Plan Fund and 25% to the General Fund. Figure B illustrates the allocation of combined tax revenue from 2023 and 2024 to these City funds to date. 500,000 4225120 400,000 $3775698 -- 300,000 2007000 1007000 0 2023 2024 Figure C. Annual Administrative Fee Revenue Figure C illustrates the administrative fee totals collected in 2023 and 2024. Administrative fees are paid by the applicant at the time a STR permit application is submitted. 3 91 City Attorney's Office 142, 648 Community Development Department 451,031 Finance Department 206,139 Figure D. Allocation of STR Administrative Fee Revenue (2023-2024 combined) Figure D shows how the administrative fees are allocated within the City organization. Revenue is split between Community Development, Finance, and the City Attorneys for staff labor. Administrative fees also offset the cost of the permitting and tax collection software utilized by customers and staff. 800 740 700 698 658 600 500 400 392 385 379 300 200 100 76 72 63 Not STR-C STR-LE STR-00 12023 i 12024 2025 Figure E. Number of STR Units from 2023-Present Figure E depicts the number of STR unit types from 2023 to present. A slight decline in all property types can be seen from 2023-2025, culminating in an 89% renewal rate for Classic properties, a 97% renewal rate for Lodging Exempt properties, and an 83% renewal rate for Owner Occupied properties. Overall, there has been an 8.9% decline in the total number of STRs since 2023. The decline can be attributed to some of the following factors: Switch to long-term rentals, Forfeiture of permits due to property sales, Attrition of permits in capped zones, and Decisions to stop renting on a short-term basis. 92 STAFF DISCUSSION: During a November 2024 Council meeting, Councilors posed a series of questions to staff about the STR program. Answers to those questions follow. Question 1: In response to the Frias Properties representative's public comments about the HOA signoff required for annual permit renewal, is there a way to simplify that process? Language requiring HOA approval was adopted in Ordinance #09, Series of 2022: "Permit applications for residential properties which are in a Homeowners Association (HOA) must include HOA approval for the applicant to operate an STR in the form of a signed letter, including telephone and email contact information for the HOA, with the permit application." (Exhibit C, Ordinance #09, Series of 2022) Currently, a signature from an HOA representative is required with each new permit application, and updated signatures are required for annual permit renewal. Annual HOA signoffs are required by staff because HOAs have been known to change their STR permissions from year to year. Certainly, if Council directs staff to adjust the HOA signoff for renewal applications, staff could explore paths to ease the burden on HOA managers and simplify the permit renewal process. Question 2: Regarding outstanding applicants in the different zone districts, help us better understand what the STR market and those seeking permits that aren't able to get them mean? Review the caps and outstanding applicants in different zones. What happens to people who apply but permits are unavailable? Ordinance #09 established limits on the maximum number of STR-C permits available in 14 of Aspen's residential -serving zone districts (Exhibit C, Ordinance #09, Series of 2022). The purpose of the limits (AKA "caps") is to curtail neighborhood impacts of STRs, limit conversion of long-term and owner -occupied housing to STRs, and distribute STR uses within appropriate zones throughout the community. Caps do not apply to STR-00 or STR-LE permits. 200 180 _ 160 140 120 - 100 _ _.n 80 60 6- 40 _ - -- 20 0 0 0 0 5 0 1 0 4 0 0 0 0 AH MU NC R/MF R/MFA R-15 R-15A R-15B R-3 R-30 R-6 RR SCI SKI Permit Cap Active Permits i # Applications on Waitlist Figure F: Permit Cap Analysis (as of 2/14/25) 5 93 Figure F illustrates the numbers of active and waitlisted STR-C accounts in all 14 (fourteen) capped zones, alongside the cap for each zone. There are currently waitlists for STR-C permits in 4 (four) of the fourteen (14) capped zones. Waitlist totals are shown by the numbers along the horizontal axis in Figure F. In 6 (six) of the 14 (fourteen) capped zones, the number of active permits is equal to the permit cap. When an STR-C permit application is received for a property in these zones, it is placed on a waitlist for the next available permit, which would be issued when an existing permit is relinquished by the owner. In 5 (five) of the fourteen (14) of capped zones, the number of active permits is less than the permit cap. STR-C permits are currently available to applicants without a waitlist in these zones. In 3 (three) out of fourteen (14) zones, the number of active permits is greater than the cap. In these zones (R/MF, R-30, and SCI), permits that predate the moratorium have not yet been reduced to the caps through attrition. Applications for STR-C permits are placed on waitlists in these zones, and new permits will be available once the number of active permits falls below the caps. 50 45 40 35 30 25 20 15 10 IN 4000 0 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 R-6 R-15 , R-15B R-30 --, R/M F Figure G. STR-C Waitlist Sizes, 2022-2025 Figure G illustrates the fluctuations in waitlists for STR-C permits. The R/MF waitlist, indicated by the line climbing steadily at the top half of Figure G, is the obvious outlier. Staff received twenty- 94 two (22) applications for STR-C permits in R/MF zone within the first two (2) months of the program, and the waitlist has increased to forty-six (46) applications since 2022. The R-30 waitlist has also only increased in size since 2022; there are four (4) applicants on this waitlist currently. Due to the slow rates of permit attrition in these zones, no new permits have been issued in R-30 or R/MF since 2022. Dips in the lines, as shown for R-6, R-15, and R-15B zones, indicate reductions in the waitlist size at points when permits became available to applicants in the top positions for those zones. Question 3: Regarding STR violations, how many have been issued, what are the nature of the violations, where were they located, and were they licensed? Staff follows the City's policy of progressive enforcement in responding to STR issues. In alignment with this policy, staff must first validate any alleged compliance issue before proceeding through enforcement steps. When an issue is validated, staff works with owners to educate them about how to come into compliance through a series of courtesy contacts and, if necessary, formal warnings. If the issue is not corrected after outreach and a formal warning, only then will a Notice of Violation (NOV) be issued to the property owner. The NOV is the last step in the enforcement process before a summons to court, fines, and/or jail time is imposed. 60 50 40 30 20 10 x 1 lam. 3 J ,,,,,,;;,,l... Issues Courtesy # Warnings # Notices of Identified Outreach Issued Violation Contacts Issued Figure H. STR Compliance Summary, 2022-2025 The purpose of progressive enforcement is to encourage compliance through education rather than to impose punitive measures. As shown in Figure H, only 6% of alleged compliance issues at STR properties have resulted in NOVs. A total of three (3) NOVs have been issued to property owners for STR issues. While all the subject properties have subsequently come into compliance, details of those NOVs are as follows: Two (2) for unpermitted STR use (R-6 and R/MF zones), and One (1) for improper waste disposal that resulted in a wildlife intrusion at an STR- permitted property (R-6 zone). 7 95 Nuisance No Permit - i Wildlife Intrusion Lighting Renter Complaint Waste Container HOA Approval Snow Removal Figure I. Number of STR Compliance Issues Reported, 2022-2025 The public can report STR issues directly to City staff through the Aspen 311 Connect app. Staff also utilize active measures, such as reviewing internet advertisements, to detect issues at STR properties. As shown in Figure I, of the fifty-three (53) total compliance issues identified since 2022, 26% of those issues were nuisance -related (noise and smoke). 16 14 12 10 8 6 4 0 AH R-6 L R/MF MU R-15 R-15B R-30 Figure J. STR Compliance Issues by Zone District, 2022-2025 Figure J depicts the number of compliance issues reported per zone district. 81 % of all issues were reported to have occurred in zones that are capped for STR-C permits. The majority of issues were reported for properties in the AH zone, however it should be noted that reports in AH were primarily for lighting- and nuisance -related issues at free-market properties. Question 4: How do STR tax collections compare to 2022 estimates? As mentioned previously, Aspen voters approved the STR excise tax in 2022 (Exhibit D, Resolution #106, Series of 2022). While estimating potential revenue for the first full year of the proposed tax, staff in 2022 were required to 'make many assumptions of the 2024 pool of STR permits, including: The average nightly rental rate in 2024, 96 The distribution of STR-LE, STR-00, and STR-C permits, The number of permits in uncapped zones, The pace of permit attrition in capped zones, and The economic conditions that would exist in 2024. Staff added a buffer to the estimate of revenue to reflect these and other unknown factors, as well as to limit the need to seek additional direction from voters if collections surpassed an estimate that was too low. The 2022 estimate of 2024 STIR excise tax collections combined from all three permit types was 9,140,000. The 2024 actual STIR excise tax collections totaled $6,937,942. Question 5: Should we have an equal tax rate across all rentals of less than 30 days? Could the program be more successful if we rethought some initial assumptions about tax rates? Council considered the following factors when landing on differential tax rates for the three types of STIR permits: Community sentiment, Delta in property taxation between residential and commercial properties, and Delta in housing mitigation fees paid at time of development of commercial lodge properties. Prior to the 2022 STIR tax ballot question, Frederick Polls conducted voter polling to understand voter acceptance of a new tax, the preferred taxation rate(s), and possible supported uses for the revenue. Of the 322 registered voters polled, 65% wanted investor -owned rentals (STR-C permits) to be taxed at a higher rate, while 35% of respondents wanted all STIR permits to be taxed at the same rate. This community sentiment aligned with staff and consultant recommendations for STR-LE properties, which were historically used as lodge properties and had already paid affordable housing mitigation, to be taxed at a lower rate than properties with STR-C permits. STR-00 permits, which are intended for full time residents as an occasional source of supplemental income, also fell into the lower tax category since their community impacts would be less than those of the STR-C permits. Question 6: What are we learning about what's falling through the cracks? There's a way to create 31-day lease; is there any way to evaluate how much of that is happening? What are people doing to get around our regs? Short-term rentals are differentiated from long-term rentals by the length of stay. STRs are defined by stays of 29 days (or less) at a time, while rentals of 30 days (or more) at a time constitute long- term rentals. Long-term rental income is tax exempt, and while the City requests that long-term rental income is reported, the number of rental days per year is not a requirement for reporting. Long-term rental business licenses have increased overall in recent years, however it is difficult to assess whether the increase is due to an increase in long-term activity, an increase in reporting frequency, or an increase in compliance with licensing requirements. It should also be noted that some STIR accounts hold long-term rental business licenses and STIR permits at the same time. For these reasons, it is difficult to conclude that owners are scheduling long-term rentals in lieu of STRs. 0 97 Staff have received reports from members ofthe public about properties being rented osSTRa without permits, however without definitive evidence that an 8TR is occurring (such as an advertisement for rental of less than 30 days), staff is unable to successfully pursue enforcement in those instances. As mentioned previously, staff have validated two instances of STRs occurring without permit. Those two properties were issued NOVs and have since come into compliance. Question 7:&s theme empirical data to show how the program is preserving or generating housing for primary residents? It was an initial goal of the program. Can we demonstrate any results? In many communities pursuing STR regulation, the clearly stated desire has been to try to protect housing for locals. Due to the nature of Aspen's real estate and residential markets, it was clearly understood at the time Ordinance #09 was passed that the intentions were not to preserve actual housing units, but instead to reduce and mitigate the impacts ofthe STRoaagrowing land use type on the community. From problem statement 5, STRo / n developments, have accelerated a/nano i»n of many housing units that previously were owned or rented by working locals into de too/o lodge units. The displacement of locals from these units over time is not a new trend, but STRs have brought a new scale and pace to this challenge." Data to understand correlation from problem statement number 5 is hard to draw conclusions from, however staff would reference the |ovv number ofenforcement cases against STHa as evidence that community impacts are being mitigated. Though the program does not directly preserve or generate housing for locals, 70% of STR excise tax revenue is allocated to funding affordable housing for locals ($7,232,059 to date). These funds are direct contributions to the cost of housing stock for primary residents. STAFF OBSERVATIONS AND REQUESTS FOR DIRECTION Over the last two years of program operation, staff have identified several recurring and potentially problematic themes within the 8TR regulations. The following topics are the primary sources of concern for program participants (and in some cases, staff). Staff requests Council majority direction as to Counoi|'m desire to explore code updates for the following topics. Non - Transferability Language STR permits may only be issued to one individual owner with at least 10% interest in the STR property. Permits are non -transferable toother individuals or properties and are terminated and revoked upon a property sale. Non -transferability provisions support the attrition of permits in capped zones and subsequent movement of applications on waitlists, and they give new property owners a chance to obtain a permit where they may otherwise be monopolized if transfers were allowed between owners. Non -transferability ofpermits hsomajor oonoernforpennktees engaged inestate planning. Many married couples rely heavily on income from STR properties, and if a spouse who is named on on STR permit passes away, the surviving spouse must apply to obtain an entirely new permit and could be subject towaiting periods for such permit. Staff have received frequent requests for the ability to transfer an Sl[R permit to the surviving spouse in the event of the death of a permittee. Question I for Council: Does Council desire to update non-transferabifity language so that a permit may be transferred tomspouse in the event of death of the permit holder? 98 Permit Cap in R/MF Zone The R/MF zone has the largest waitlist of any capped zone (see Figure G). Due to the slow rate of permit attrition in R/MF, staff estimates it may take up to two more years until a STR-C permit becomes available to the first applicant on the waiting list for permits in R/MF. Staff often receive questions from real estate professionals and potential buyers about whether the limits on the number of STR-C permits will be raised or eliminated altogether in the R/MF zone due to the slow rate of attrition and related large waitlist size. Question 2 for Council: Does Council wish to adjust or eliminate the cap on STR-C permits in the R/MF zone district? Permit Application Requirements: Public Notice and HOA Affidavit To help mitigate the impacts of STRs on surrounding properties, all new STIR properties must complete a public notice prior to approval of the permit. Notices are posted on STIR properties and mailed to surrounding neighbors. Staff has received feedback that the mailing of notices produces excessive paper waste, and that notices should be sent virtually instead of through paper mail (though virtual notice is not permitted by the land use code). Property owners receiving notices in uncapped zones, where STIR activity is heavily concentrated, have indicated that notices are entirely unnecessary because STIR activity is both assumed and widespread. STIR code does not delineate between sending notices in some but not all zone districts. Question 3 for Council: Does Council desire to revise the public notice requirement to exempt properties in zones where caps on STR-C permits do not exist? An HOA affidavit is a required submission with any STIR permit application. The affidavit notifies an HOA that an owner is applying for STIR permit, and it absolves the City of interpreting or applying HOA rules. If a property is subject to an HOA, the signature of an HOA member is required on the affidavit. Staff and Council have heard requests that this requirement be adjusted or removed altogether as it produces a significant burden on managers of large HOAs during the annual permit renewal process. Question 4 for Council: Does Council wish to eliminate the need for the signature of an HOA member on STR permit renewal applications? Tax Filing Requirement STIR owners must demonstrate that they have utilized their STIR permit at least once per calendar year to be able to renew their permit for the following year. Permit use is verified via an account's tax filings when an owner applies to renew the permit, and accounts with $0 in tax filings are ineligible to renew the permit. This policy encourages owners to obtain permits only when necessary, and helps ensure that attrition of permits occurs in zones where permits are limited, and waitlists may be in effect. Some STIR owners have expressed frustration at the inability to utilize their permits while their property is under construction for renovation. These owners have requested exemptions from this rule, so they do not forfeit a permit due to upgrading the property and being unable to take rentals during that time. The STIR code does not provide any exemptions for tax filing requirements. 11 99 Question 5 for Council: Would Council like to revise the tax filing requirement to exempt permitted properties that are under construction and unable to engage in short-term rentals for an entire calendar year? Advertising Platform Accountability The majority of staff's active enforcement work involves the attempt to identify illegal STRs in the community. To achieve this, advertisements on internet rental platforms are reviewed to verify that the properties are permitted. To aid in the identification of permitted properties, STR operators are required to post STR permit numbers in all ads of the property. STR permit numbers are absent from approximately 40% of online STR advertisements in Aspen. Also absent from many of the same ads is identifying information for the property owner or address, which makes verification of the legality of the STR extremely difficult. Even though the property owner is responsible for compliance with these requirements, in many cases, staff cannot identify the owner to hold them accountable. A handful of Colorado municipalities are combatting this issue by holding advertising platforms accountable for publishing only compliant advertisements on their websites. In these instances, when a municipality finds an STR ad that is out of compliance with its regulations, staff contact the website directly to request that the ad is either brought into compliance or removed from the site. Staff are confident that the overall compliance of internet advertisements (and illegal STR advertisements) would increase dramatically if Aspen adopted a similar approach. Question 6 for Council: Is Council open to revising Aspen's requirements to hold STR booking platforms accountable for posting only ads that clearly show valid STR permit numbers for the STR property? Run Out" Period for STR Bookings Non -transferability language in Ordinance #09 states that STR permits are forfeited upon the sale of a property and may not be transferred to a new owner when a property transaction occurs. One issue noted consistently by the rental community is that when a STR property sells, and the seller has pre-existing binding contracts for rentals that begin after the sale of the property, there is no mechanism for the new property owner to honor the contracts made by the previous owner. Rental professionals have often asked for a "run -out" period or permit type to allow new property owners to honor contracts from the old owners. Potential consequences of these situations for the seller and new buyer include financial liability to their customers, damage to the reputation of rental agencies involved, and compliance issues for new property owners choosing to honor the existing rentals before a permit is rightfully obtained. This topic was presented during a Council Work Session in 2022 at the request of the lodging community (Exhibit F, Memo _STR Run -out Work Session). A Council majority decided that the City should not be the arbiter of such situations involving property transactions and contracts that the City is not a party to. Staff continues to believe that regulating these "run -out" instances puts the City in a difficult situation to evaluate the unique circumstances of each situation, and that offering a "run -out" period for each permit would raise equity issues for applications that have been on waitlists for permits. Due to the frequency with which these "run -out" questions are received, staff is noting this issue purely for Council's awareness. 12 100 POLICY / REGULATORY TOPICS IN SUMMARY: Staff desires a Council majority position on each of these topics for further staff exploration and possible future code amendments: 1. Does Council desire to update non -transferability language so that a permit may be transferred to a spouse in the event of death of the permit holder? 2. Does Council wish to ad'lust or eliminate the cap on STR-C permits in the R/MF zone district? 3. Would Council like to revise the public notice requirement to exempt properties in zones where caps on STR-C permits do not exist? 4. Does Council desire to eliminate the need for the signature of an HOA member on STR permit renewal applications? 5. Would Council like to revise the tax filing requirement to exempt properties that are under construction and unable to engage in short-term rentals for an entire calendar year? 6. Is Council open to revising compliance requirements to hold STR booking platforms accountable for posting only compliant ads that show permit numbers for the STR property? Are there any other topics not listed here that a Council majority would like to explore further? CITY MANAGER COMMENTS: EXHIBITS: Exhibit A — Ordinance #26, Series of 2021 Exhibit B — Memo _Second Reading of Ordinance #09, Series of 2022 Exhibit C - Ordinance #09, Series of 2022 Exhibit D - Resolution #106, Series of 2022 Exhibit E — Memo—STR Tax Polling Results and Next Steps Exhibit F — Memo STR Run -out Work Session 13 101 102 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Phillip Supino, Community Development Director Haley Hart, Long-Range Planner MEMO DATE: April 28, 2022 MEETING DATE: May 2, 2022 RE: Short-Term Rental Regulatory Framework Final Review REQUEST OF COUNCIL: Staff requests Council review staff’s proposal for the regulation of short-term rentals (STRs) and provide final direction on specific policy and regulatory options prior to the development of an ordinance and supporting documents for Planning and Zoning Commission and City Council review in the coming weeks. SUMMARY AND BACKGROUND: In response to the moratorium, staff continues to develop code amendments to further regulate STRs in the community. At the last work session on the topic on March 1, 2022, Council directed staff to develop regulations in each of the seven categories identified in best practices research: zoning, good neighbor policies, operational standards, life safety standards, permitting, financials, and enforcement. That work is ongoing. To support the development of new regulations, staff has meet bi-weekly with a Technical Advisory Committee of local industry professionals, residents, and advocates. Community engagement has included online surveys, an open house, focus group meetings, one-on-one interviews, and public meetings. Staff work is relied heavily on input gleaned from the engagement process to develop our work product. Staff is preparing a community engagement summary that will be presented to Council in the work session on 5/3, along with an outline of staff recommendations for new STR regulations. In addition to engagement, staff has relied heavily on Colorado Association of Ski Towns (CAST) STR studies and our own research to support the development of Aspen-specific regulations for STRs. The CAST reports have been included in previous work session packets to Council. Included in this memo as Exhibit A is a Case Studies Report developed by Community Development staff over the last two months. The report includes information derived from interviews, ordinances, memos, and program information from inter-mountain west communities. The interviews, in particular, have provided ComDev staff with detailed, on-the-ground information and perspective from communities further down the STR regulation road than Aspen. The report includes key findings, many of which have informed staff’s work on new regulations. 103 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 2 of 7 STAFF DISCUSSION: At this point in the process, staff seeks direction from Council on a handful of specific regulatory choices. These choices are outlined below. Included are several exhibits to support Council considerations of the questions posed in this memo. Council’s preferences on each of the options outlined below will shape the final set of recommendations staff presents to Council in the next work session. These questions are complex, and each is one component of a larger system of regulation. The answer to one will likely rely upon or effect the answer to another. Staff recognizes the challenge of thinking about them in isolation and in a linear fashion. Despite that challenge, it is essential for staff to get Council direction on these questions before a staff proposal can be further developed. The staff presentation will provide opportunity for Council to ask clarifying questions and understand how one particular question (e.g. should there be three STR permit types) effects other elements of the regulatory framework (e.g. how are permits allocated). Question #1 Where should the cap be set for STR permits in residential zones? Council stated in the previous work session that caps should be instituted for STR permits (non-owner-occupied) in residential zones. There are some zones, described in Exhibit X, where STR is not a permitted use. This is to ensure those zones function as intended and with the uses currently permitted therein. In other residential zones, Council favors STRs as some proportion of residential units within the zone. Based on best practice and comparable communities research, staff has determined that as effective means of determining permit caps is setting them in comparison to the number of residential units in each zone. With the assistance of the wizards in the City GIS department, staff analyzed different scenarios – 25%, 50%, 75%, and existing condition. The maps for each zone district show the existing number and location of permits and the number of STRs for 25%, 50%, and 75% of the total existing permits in each zone. For example, in the R-6, there are 109 existing permits. Twenty-five percent of residential units in the zone as permitted STRs would be XX, 50% would be XX, and 75% XX STR permits. R-6 Zone Total Residential Units 650 residential units Existing STRs 109 (17% of res. units) 75% of existing STRs 81 (12.5% of res. units) 50% of existing STRs 55 ( 25% of existing STRs 27 Staff Recommendation 75%/81 STRs Figure 1: Example R-6 analysis. 104 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 3 of 7 Based on this analysis and in consideration of public engagement comments from residents and Technical Advisory Committee members, staff recommends Council set the cap at 75% of existing permits. The cap number for each zone district set by Council will be included in Ordinance #09 along with regulations about where STR permits are exempted from caps (e.g. the commercial core). Policy Outcomes:  Protect neighborhood character by limiting the total number of STRs in a zone.  Support the lodging bed base by continuing to permit STRs in residential zones.  Alternatives:  25%, 50%, existing Staff Recommendation: 75% Policy Question #2 Should a cap be placed on the number of non-owner-occupied STR permits in residential zone districts? Based on the maps provided, what does Council feel is the appropriate number? Caps are a widely used tool for limiting the number of STRs in a community or neighborhood. When caps are instituted, a higher level of program administration is required, as permits numbers and a wait list must be managed. Exhibit B shows the number of existing STRs by zone district. Exhibits C and D show the R-6 and R-15 zone districts respectively in different scenarios – existing STRs and STRs capped at different numbers below the existing STR count. These maps are meant to illustrate the effect on the density of STRs in a neighborhood by different cap sizes. In each map, the distribution throughout the neighborhood of STRs under the different cap sizes is illustrative only. Policy Outcomes:  Limit the density and intensity of STRs in lower-density zones and traditional neighborhoods.  Control the number of permits available over time. Alternatives:  Use the existing number of STRs in each zone as the cap, grandfathering existing permits. This avoids the complexity of establishing the “right” number of STRs in a zone.  Use radius buffers between permitted properties to limit the number in each zone without setting a cap. Staff Recommendation: Grandfather existing permits and use that number as the cap for each zone. Institute non-transferability rules, whereby STR permits may not be transferred from one owner of 105 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 4 of 7 a property to the next upon the sale of that property. A waitlist is managed to assign abandoned permits to those seeking a permit. This system would only be for non-owner- occupied permits. Policy Question #3 If a cap below the existing number is instituted, how should non-owner-occupied permits be allocated? By lottery? Or by grandfathering and attrition over time? If a cap on the number of permits is established, then there must be a system for assigning those permits for the upcoming permit year and for assigning permits as they are abandoned over time. A lottery system would require all existing non-owner-occupied permits to be revoked and for all eligible and interest properties to register for a lottery. Once the lottery is conducted, non-transferability regulations would be instituted and the number of permits is reduced over time as properties sell and permits are abandoned. Alternatively, communities grandfather existing permits, using non-transferability regulations and tracking of enforcement violations to reduce the number of permits over time as properties sell and permits are abandoned. Policy Outcomes:  Establish an equitable means of arriving at a capped number of STRs.  Provide clarity to property owners about how permits are allocated. Alternatives: If no cap is established, then the system for assigning permits would not be necessary. If a cap is established, then one of the two systems described above is necessary. Staff research has not found alternatives. Staff Recommendation: Staff recommends grandfathering existing permits and, if a cap is established, using attrition (non-transferability of permits and enforcement violations) to reduce the number of permits over time. Policy Question #4 If a cap is established, should commercial, mixed-use, and lodging zones be exempted from cap limitations? The specific zones in question are Commercial Core, Commercial, Mixed-Use, Lodge, and Commercial Lodge. Staff has received input from the public and technical advisors that STRs in these zones are different in their operation and community impacts than those in residential neighborhoods. Exhibit E shows the number and location of STRs in these zones. (Note that this map includes the RMF zone, which is a question addressed later in this memo.) Exhibit F is a table showing the number of STRs by zone, and another table with Condo-Hotel properties removed from the totals. 106 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 5 of 7 Properties in these zones are close to goods and services, close to transit and recreation infrastructure, and adjacent to traditional lodging. They are typically smaller in size, and many are governed by HOAs which may have rules regarding STRs. Exempting STRs in these zones from caps, while requiring them to be permitted and adhere to all relevant STR regulations, could meet several policy objectives. Policy Outcomes:  Protect more traditional lodging and maintain a diverse bed base.  Focus tourist accommodations in appropriate areas.  Ensure STRs operate safely and in accordance with all applicable regulations.  Distinguish between residential and non-residential neighborhoods in the administration of STR regulations. Alternatives: Institute caps for these zones and regulate them in the same way as residential neighborhoods. Staff Recommendation: Staff recommends exempting STRs in these zones, not capping the number. STRs in these zones would still require permits and full regulatory compliance. Permit type distinctions (owner-occupied, non-owner-occupied, and lodging exempt) would apply. Policy Question #5 If caps in residential zones are established, and commercial and lodge zones are exempted, how should the Residential Multi-Family (RMF) Zone be regulated? RMF is a higher-density residential neighborhood adjacent to commercial and residential zones. Presently, it has the highest number of active STRs (254) of any residential zone. (See Exhibit F.) Alongside single-family and duplex homes are several condo properties (“The Chateaus” as many are known), some of which have had significant STR activity for decades. RMF has also traditionally been home to some medium density affordable housing developments and condo buildings which house long-term rentals. The eclectic development pattern of RMF makes is challenging to regulate when it comes to STRs. Additionally, the zoning allowances of RMF, and the scale of some of the existing multi- family buildings, make it important for the potential development of future infill affordable housing development. RMF allows higher density development and has existing higher density properties. These circumstances dictate that RMF is an important zone district for the future development of infill affordable housing. Research shows that the ability to short-term a property increased the potential resale value by 9% to 11%.1 So the ability to short-term in the RMF may make the financials of promoting affordable housing development there more challenging. 1 David Wyman, Chris Mothorpe & Brumby McLeod (2020): Airbnb and VRBO: the impact of short-term tourist rentals on residential property pricing, Current Issues in Tourism, DOI: 10.1080/13683500.2019.1711027 107 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 6 of 7 In summary, the existing and past use of multi-family properties in the RFM justifies thinking about it as a lodging-appropriate zone. This is in tension with the current and future use of the zone for affordable multi-family housing. A cap could be established, treating it like residential zones (should Council choose to implement caps). Or it could be exempted like lodging and commercial zones (should Council choose to exempt those zones). Policy Outcomes:  A cap in the RMF would limit further market effect of STRs on property values and support Council goals around affordable housing, lived in community, and limiting impacts from STR activity.  No cap would allow for the zone to continue to support the tourist accommodation bed base. Alternatives: Council can choose to treat the RMF as a commercial and lodging zone or a residential zone with respect to how it chooses to institute a cap or not. Staff Recommendation: Treat RMF as a residential zone. Grandfather existing permits and use that number as the cap for the RMF zone. Institute non-transferability rules, whereby STR permits may not be transferred from one owner of a property to the next. A waitlist is managed to assign abandoned permits to those seeking a permit. This system would only be for non- owner-occupied permits. Policy Question #6 Should staff begin the process of developing a STR-specific tax for the 2022 ballot? At the March 1 work session, Council supported permit fees, impact fees, and taxes on STRs. In subsequent research and work with our consultants, advisors, and the public, staff believes that impact fees are not an appropriate tool for mitigating community impacts from STRs. Permits fees to directly off-set program administration and service provision costs are widely used by comparable communities. Taxes, as opposed to impact fees, are preferable to addressing broader community costs from STRs. Taxes scale well to the impacts from STRs – the more nights a property is booked, and the higher value the booking, the higher the tax remittance. The combination of permit fee and tax is not only the preferred option from most respondents staff has spoken with, it is also the most common set of tools used in other communities. Policy Outcomes:  A STR tax would assess a cost on the impacts to the community generated by STR activities.  A STR tax would generate revenue which could be dedicated to specific uses in support of City policy. 108 Staff Memo, Short-term Rental Regulations April 11, 2022 Page 7 of 7 Alternatives: Council can choose to delay consideration of a tax to the 2023 ballot year. Council may also choose to implement a permit fee and determine later whether additional financial tools are required. Staff Recommendation: Should Council desire for staff to being the process of developing a tax ballot question for 2022, Council should direct staff to schedule a work session on the topic as soon as possible. CONCLUSION AND NEXT STEPS: The next work session on short-term rentals is scheduled for 5/3. At that meeting, staff will present to Council the short-term rentals public engagement summary report and a summary of the regulations to be included in the ordinance for Council consideration. FINANCIAL IMPACTS: N/A ENVIRONMENTAL IMPACTS: N/A. ALTERNATIVES: N/A RECOMMENDATIONS: Staff recommends Council consider each of the questions posed in the memo and direct staff as to their preferred response to each. CITY MANAGER COMMENTS: EXHIBITS: Exhibit A – STR Case Studies Report Exhibit B – Existing STRs by Zone District Exhibit C – STRs and Density in R-6 Exhibit D – STRs and Density in R-15 Exhibit E – STRs in Non-residential Zones Exhibit F – STRs by Zone with and without Condo-hotels Exhibit G – Case Studies Report Regulatory Matrix 109 PD PD PD PD PD LP PD PD LP PD PD PD PD PD LP PD LP PD PD PD PD PD PD PD PD PD PD PD PD PD PD PD PD R/MF R/MF R/MF R/MF 0 0.06 0.110.03 Miles FEsri Community Maps Contributors, City of Aspen GIS, Pitkin County, © OpenStreetMap, Microsoft, Esri, TomTom, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau, USDA, USFWS Legend New Waitlisted Addresses Existing STR Permits LP PD L PD LP PD R/MF Source: City of Aspen GIS Existing and Waitlisted STR Permits in R/MF Zone Map 1 110 DRAIN/TRANS LP PDLP LP LP PD LP PD PD LP PD R/MF 0 0.03 0.050.01 Miles FEsri Community Maps Contributors, City of Aspen GIS, Pitkin County, © OpenStreetMap, Microsoft, Esri, TomTom, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau, USDA, USFWS Legend Waitlisted Addresses Existing STR Permits LP PD DRAIN/TRANS LP PD R/MF Source: City of Aspen GIS Existing and Waitlisted STR Permits in R/MF Zone Map 2 111 PD PD PD PD PD LP PD PD PD PD R/MF 0 0.02 0.040.01 Miles FEsri Community Maps Contributors, City of Aspen GIS, Pitkin County, © OpenStreetMap, Microsoft, Esri, TomTom, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau, USDA, USFWS Legend Waitlisted Addresses Existing STR Permits LP PD PD R/MF Source: City of Aspen GIS Existing and Waitlisted STR Permits in R/MF Zone Map 3 112 Ti e hack Tie h a c k Maroon Creek Golf Course Zoline Property ButtermilkBa se Area Aspen Country Inn UP Stapleton Bros P fi s t e r Tieha c k Guenther LarsenUrschel Glenn Dee UP Hig hland s Center DV R e d B utte M aroon Creek Golf Course Aspen Golf Maroon Creek Wetla nds R ed Butte Zoline 2 Aspen Meadows R esort Aspen Truscott DV Before Silver King Alta Vist a Ca stle Creek UP Cemetery T h o m a s R a w W ate r H o lden M aroon Cree k 7 t h 8th F a l c o n Aspen Middle School Aspen Wa ter Dept M eadow ood Dr Kiss &R ide Golf Course Glen Gary UP Isela n Park UP High school DV 8t h &82 IN 7th &Bleeker IN Parks Dep t.DV Castle Creek DV Cast le Ridge High School Rd Cast le Creek Rd +Marolt Pl M oore Family PUD Aka Five Trees Buck sbaum Camp us D u roux M a g nifico M a g n i fi c o Reds Reds Draw NellErickson Wrights Pitki n Rubey Meadows Lot 4 Paepke Auditorium Pio n e er G u l c h Hallam Bleeker 4th North Smuggler Halla m Lak e Ba rbee Ute M esa Rub ey U S Forest Serv ice,Aspen St M oritz L odge Th e Ga nt 6th &Main IN City M arket IN Park Ava Galena Street Sh ut tle Park Circle & Park Ava Clark s Mark et Lone Pine II M all &Mill Chateau Eau Claire Bened ict M usic Tent As p e n VallejoGulch Pioneer Gu l c h Aspen Club Emilee Bened ict Pa rk Silverk ing Associates SM OS -Result USMS#6044 SM OS - Ballara t/General Jackson Molly Gibson Park Aspen Club Laurelwood Silver Lining R anch R/MF R/MF R/MF R/MF 0 0.25 0.50.13 Miles FEsri Community Maps Contributors, City of Aspen GIS, Pitkin County, Esri, TomTom, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau, USDA, USFWS Source: City of Aspen GIS Distribution of R/MF Zone District, Aspen, CO 113 MEMORANDUM TO: Mayor and City Council FROM: Erin Loughlin Molliconi, Utilities Director Ryan Loebach, Deputy Utilities Director THROUGH: Tyler Christoff, Deputy City Manager MEMO DATE: August 15th, 2025 MEETING DATE: August 25th, 2025 RE: Water Treatment Facility Improvements Project and Water Fund Rates _____________________________________________________________________ PURPOSE OF WORK SESSION: The goal of this work session is to review the Water (421) Fund draft 2026 budget and long-range plan outlook. Staff request feedback from Council on options for proposed Water Fund rates and debt service to support the Water Fund’s capital and operational needs, particularly the Water Treatment Facility (WTF) Improvements project, in line with the 2025 – 2027 Council Goal of resource and infrastructure resilience. SUMMARY AND BACKGROUND: The City’s Castle Creek WTF provides potable water to over 4,100 accounts within the City’s water service area, producing between 1.1 to 1.7 billion gallons annually. Constructed in 1965 and expanded in 1986, most of the facility’s equipment is nearly 40+ years old and the filtration media, replaced longer than 15 years ago, is scheduled for replacement. Council has approved the full design phases of the Water Treatment Facility Improvements Project, and staff hired a design professional (Garver) to deliver the project. In February of this year, Council approved a contract with Haskell to provide Preconstruction Phase Services as a Construction Manager at Risk (CMAR) contractor. As the construction-level documents are created, Haskell shall provide a guaranteed maximum price and construction schedule for the project and ultimately be retained to construct a council-approved project through a contract amendment. 114 Since February 2025, staff have been working with Garver and Haskell to progress design documents, construction schedule, and construction pricing. Staff received the preliminary 30%-level opinion of probable construction cost (OPCC) from Haskell in April of 2025. The 30% OPCC estimates that the full scope of the Water Treatment Plant Improvements Project will cost approximately $77.4M between 2027 and 2030. Garver also developed an OPCC for comparison and to cross-check the CMAR estimate, which showed that the contractor and engineering estimates at the 30% phase of design were well-aligned. Staff project estimates include construction-phase services for professional engineering inspections, observations, reviews, as well as a project contingency. The Water Fund cannot support implementation of this WTF project – as well as continuing to meet capital and operating needs across the raw water and distribution systems – without considering both rate adjustments and debt service. Staff will discuss the options to achieve implementation of this critical capital improvements project and the impact on overall Water Fund health during the work session. DISCUSSION: Staff will discuss the following in greater detail during the work session. Water Treatment Facility Improvements Project Drivers The WTF is a conventional treatment facility that operates two treatment trains – the East Plant and the West Plant. The West Plant was built in 1965, and the East Plant was built in 1985. The WTF has not undergone significant upgrades since the 1985 expansion. The planned improvements include construction of new facilities and rehabilitation of existing facilities to increase the perf ormance and the ease of operation and maintenance activities at the WTF. In general, the primary drivers for the WTF project are: 1. Replacement and renewal of aging equipment and infrastructure that is at or past its useful life. Most of the equipment within the West and East Plants are more than 40 years old and due for replacement. The filtration process, which is the heart of the WTF, has media which was replaced over 15 years ago and is scheduled for replacement. 2. Improving water operator safety. 115 This project aims to have a consolidated chemical building housing both bleach and fluoride feed and storage systems. The proposed chemical building would streamline chemical dosing operations and improve operator safety with access, space, and style of chemical. The building will also include modern safety equipment, safety showers with warm water, and eyewash stations. 3. Proactively addressing treatment processes ahead of anticipated regulatory changes. The WTF consistently produces potable water meeting or exceeding the minimum drinking water standards in effect, even with some processes which were designed and constructed in an era which predated many of the water quality limits operators achieve today. The pretreatment process is one area which meets all required drinking water treatment and removal parameters, but which is considered to be “grandfathered” in by the Colorado Department of Public Health and Environment (CDPHE) because of process size. The proposed WTF Improvements Project addresses this treatment discrepancy by meeting current process size requirements. Additionally, the existing backwash pond – which settles out particulates from filter backwashes, and other process wastes before eventual discharge to Castle Creek – is undersized. The State discharge permit has been administratively continued since approximately 2005. However, based upon recent correspondence and updates from the permitting staff at the CDPHE, staff anticipate the discharge permit treatment limits to become more stringent within the next 3 – 5 years. The proposed WTF Improvements Project would address this anticipated regulatory requirement by providing for the necessary expansion and equipment and monitoring improvements to seamlessly maintain continued compliance. Proposed Rate Increases, Debt Service, and Water Fund Health for 2026 and beyond The Water (421) Fund is an enterprise fund that must collect sufficient revenue through fees and rates to meet the revenue requirements of the utility. The Water Utility must also maintain adequate reserves of at least 25% of the fund balance. This fund balance can dip below that target line for no more than three years in a row, after which revenues and expenses must be adjusted to recover fund health (e.g., at least 25% of fund balance in reserves). Staff have worked internally, with the hired design professionals and CMAR contractor, and the Finance Department to model several options which provide a path for 116 successful implementation of the project, and which continue to maintain a fund balance adequate to support the other utility work areas and infrastructure components. Staff will discuss the following financial options in greater detail during the work session: Option 1A Option 2A Option 3A Option 4A Proposed 2026 Rate Increase 30% 15% 40% 25% Proposed Bond Measure (2026 ballot)B $85M $85M N/A $32M Proposed Internal Financing1 N/A N/A $32M N/A WTP Project Scope Covered Full scope Full scope Critical scope remaining scope programmed in out-years Critical scope remaining scope programmed in out-years Projected Out- year rate impacts 2027: 5% 2028: 5% 2029: 5% 2030: 5% 2031: 5% 2027: 10% 2028: 10% 2029: 5% 2030: 5% 2031: 5% 2027: 25% 2028: 8% 2029: 5% 2030: 5% 2031: 5% 2027: 20% 2028: 20% 2029: 18% 2030: 5% 2031: 5% A All financial options presented herein are preliminary in nature and subject to change while the final contract documents are developed. Guaranteed maximum price (GMP) plans and pricing are anticipated in May/June 2026 and any out-year rates and/or financing will be re-evaluated against the final GMP costs. B Each dollar amount shown for proposed bond measure includes contractor’s preliminary 30% OPCC, construction-phase engineering inspection and services, and owner’s contingency. 117 ENVIRONMENTAL IMPACTS: Staff produce potable water with the least amount of environmental impact to the best of their abilities following Colorado Department of Health and Environment Potable and Clean Water Quality Standards. Council approval of a rate increase which would support this treatment plant improvements project allows staff to implement improvements to treat raw water more efficiently by potentially using fewer treatment chemicals and creating a smaller volume of process residuals. Reducing chemical usage and residual production quantities increases staff’s ability to sustainably produce potable water for the City. ALTERNATIVES: Staff believe this is a critical project and a necessary expense to continue to produce and distribute water that is safe for human consumption. This infrastructure renewal project also aligns with Council’s stated resource and infrastructure resiliency goal for 2025 – 2027. Staff have provided a few alternatives for how financing and timing for this critical water utility infrastructure can be addressed. While these alternatives vary how financial resources are achieved – whether through larger immediate rate adjustments or via more gradual rate escalation – ultimately, this enterprise requires rate payers to support the cost of the utility’s operation. Conversely, there is no true option to operate the treatment plant equipment and filter media to a failure point (a do nothing alternative). This alternative would risk unreliable potable water production and would risk a failure event that would be unpla nned and highly impactful. And ultimately, this option would only delay the inevitable costs already identified. RECOMMENDATIONS: Staff requests continued support on the Water Treatment Facility Improvement Project to modernize the current treatment facility and maintain City staff’s ability to provide safe, reliable water treatment and quality potable water to the public. During the work session, staff welcome discussion around alternatives and priorities to guide the Department’s 2026 capital and long-range planning. CITY MANAGER COMMENTS: 118 ATTACHMENTS: None. 119