Vacation Rental Council Letter to Town Board
Vacation Rental Council Letter to Town Board
Mayor Koenig, Town Trustees, and Administrator Machalek
Greetings from the Estes Chamber of Commerce. I’m Donna Carlson, a resident at 1551 S. St. Vrain Ave. (thanks to Naomi) here on behalf of our Vacation Rental Council regarding the matter of the Vacation Rental Philosophy on tonight’s agenda. I am in receipt of 18 letters from vacation rental owners sent to this board over the past several days. The Chamber has compiled these responses on a blog entry titled Vacation Rental Responses to August 10 Town Board Reading Session so our vacation rental action team can comb these for data that can inform the development of our Town’s vacation rental philosophy.
I submitted a letter to you today in favor of developing a philosophy concerning the governance of vacation rentals in Estes Park based on facts and the whole picture – which includes understanding that vacation rental owners range from property managers governing 100 or more properties to a widow managing a single vacation rental as her only source of income. As a Council we are very concerned about partnering in any effort to provide solutions for workforce housing. Our Vacation Rental Council would like to assist this board in the aggregation of data that can help you form an educated decision that takes into account our whole community.
There are members of our council on the call tonight who are better qualified than I am to answer specific questions on the issues at hand. I represent The Chamber of Commerce, which is not one person or a board, but the collective voice of business, asking you to collaborate with us in building a vacation rental philosophy that we can all stand behind.
LETTER TO TOWN BOARD submitted Tuesday, August 24, 12 p.m.
Community Development Staff
From Estes Chamber of Commerce, Vacation Rental Council
The Estes Chamber of Commerce formed the Vacation Rental Council (the Council) to give a unified voice to owners of Short-Term Rentals (STR) and to educate the town government on facts surrounding the STR market to inform sound decision-making.
The council is writing this letter in response to the August 10, 2021, Study Session. The below observations and recommendations are intended to provide facts from our industry to inform tonight’s discussion.
Estes Park is like no other community in Larimer County or in Colorado. It was built on hospitality, beginning over 150 years ago when Joel Estes began taking in guests and soon found that it was more lucrative than cattle ranching. All other mountain resort communities in Colorado were first mining communities that morphed into resort communities as gold and silver reserves were depleted. It’s in the DNA of Estes Park.
STRs require licensing, and in residential zoning there is a cap of 288 licenses in town limits. STRs are small Mom and Pop businesses and not owned by corporate investors vying to take over the housing industry in Estes Park. One member of the Council oversees more than 100 STRs, and reports that only one is owned by a corporate investor. Other council members have reported their clients have elected to use these businesses as part of their retirement plans. Just like any business, these businesses are built over the years by providing exceptional customer experiences which attracts repeat customers and new guests to the business. This is what all successful business owners strive for, whether they’re selling t-shirts, computers, groceries, ice-cream, real estate, etc. Is it just to remove the ability for a business owner to make decisions over the transfer of their license?
Licenses are granted on a year-to year basis, but the restriction on the number of licenses is like no other business license. If there was a cap on the number of restaurants, coffee shops or retail establishments that could not be transferred to a new owner, it would devastate all small businesses in Estes Park. It would be hard to imagine the town establishing regulations that would not allow a business to operate under a new owner as it had for many years. Why single out the transferability of STR licenses?
STRs provide millions of dollars in sales tax revenue for the Town of Estes Park, as well as lodging taxes that fund Visit Estes Park. We request that the Town Trustees study the issue and come up with solid figures on which to base their regulations. In addition to the tax revenue and fees paid by the vacation rental industry, these STRs provide hundreds of jobs in the Estes Valley. The owner of the property management company that serves 100 vacation rentals has 25 full-time employees that work in Estes Park. Having close to 800 vacation rentals in the entire Estes Valley would equate to 200 jobs using the same math.
We have requested more data from the Town Clerk’s office on the size and makeup of properties with STR licenses in town limits and will provide more solid numbers once our open records request is completed. For now, here is a snapshot: In Estes Park, 139 detached residences have been sold thus far in 2021. We anticipate that the makeup of those sales will mirror the makeup of the houses holding licenses. On average, those 139 homes have 3.2 bedrooms, 2.8 bathrooms and 2,430 square feet, and sold at an average price of $785,992.71. Affordable housing? We think not. The Estes Park Area Housing Needs Assessment completed in January of 2016 defined affordable housing as having a purchase price of no more than 30% of a household gross income. For example, an owner of a home purchased at the average price of a home sold in 2021 with 20% down at 4% interest over a 30-year term would need to make $136,760 per year to remain under the gross income guidelines. If the current inventory of homes with STR licenses fall into the same value as the homes sold so far in 2021, they would not qualify as affordable housing. Again, we will provide a more detailed update once we receive that information from the Town Clerk’s office.
The 2016 Estes Park Area Housing Needs Assessment also noted that Estes Park needs 1480 – 1690 housing units to fulfill our housing needs. If every one of the 288 STRs in residential zoned areas was “affordable” and converted to a long-term rental or sold, it would barely put a dent in the needs.
We struggle with the affordable and workforce housing issues just like you and want to help be part of the solution. When making decisions as the Estes Park Town Board, we ask that you use facts that can be supported and verified, and not base your opinions on feelings or feedback from the squeaky wheel. We are willing to work side-by-side with you to help gather the facts by digging into the numbers and surveying our membership that makes their living on vacation rentals. The Vacation Rental Council believes there is no correlation between STRs and the lack of affordable/workforce housing and make the following recommendations.
- Allow the transferability of STR licenses so as not to penalize the Mom and Pop businesses that have built their business and should be allowed to see the value of their investments when they sell.
- Consider a better use of any funds that would be used to study the financial correlation between STRs and affordable/workforce housing.
- Team up with local private organizations to find a solution to the affordable/workforce housing crisis and not levy taxes/fees on any one industry.
Thank you for your time. Let’s create this solution together.
Estes Chamber of Commerce Vacation Rental Council