{"id":74795,"date":"2020-02-11T01:19:33","date_gmt":"2020-02-11T01:19:33","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/short-term-rental-legislation-creates-uproar-in-colorado\/"},"modified":"2026-03-31T11:35:20","modified_gmt":"2026-03-31T11:35:20","slug":"short-term-rental-legislation-creates-uproar-in-colorado","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/short-term-rental-legislation-creates-uproar-in-colorado\/","title":{"rendered":"Short-term rental legislation creates uproar in Colorado"},"content":{"rendered":"\n

\"The
The Colorado Sun<br><br>The website for AirBnB\u2019s Colorado listings as seen on Sept. 27, 2018. Lawmakers have suggested a major tax change for short-term rental properties that could drastically change the industry as it stands in Colorado.<\/span>du1-i-syn<\/span><\/figcaption><\/figure>\n<\/p>

State Sen. Bob Gardner wanted to start a conversation. He\u2019s incited a statewide uproar instead.<\/p>\n

The Colorado Springs Republican introduced a bill at the Colorado Capitol<\/a> that would change the property tax assessment category for short-term rentals to commercial from residential. That would increase the taxation rate more than four-fold from a projected 7.1% in 2022 to 29%.<\/p>\n

\"Sen.
Sen. Bob Gardner<\/span>du1-i-syn<\/span><\/figcaption><\/figure>\n<\/p>

Senate Bill 109 bill will likely never go into effect, and Gardner said he never really intended for it to pass. The bill doesn\u2019t have a co-sponsor<\/p>\n

\u201cI call this the \u2018now that I have your attention\u2019 bill,\u201d Gardner said.<\/p>\n

And he\u2019s definitely got everyone\u2019s attention. Dozens of lobbyists have registered to work on the bill, and a consortium of resort-area real estate brokers have rallied at the Capitol, hoping to change Gardner\u2019s mind. Lawmakers say their email inboxes are filled with notes from opponents of the legislation.<\/p>\n

And last week, short-term-rental giant Homeaway, a division of Expedia, sent an email to its thousands of short-term rental homeowners in Colorado, urging them to send feedback. It also recommended that homeowners show up at the committee hearing.<\/p>\n

Affordable housing advocates, meanwhile, see the bill as a way to discourage wealthy people from buying homes solely as rental investment properties. Some local governments are also excited about the prospect of up to $100 million more in annual tax revenue that the measure would bring in, according to legislative fiscal analysts.<\/p>\n

The mass response has proved that short-term rentals remain an incredibly prickly subject in Colorado, stretching beyond small-town disputes and big-city policies, and that, when necessary, the might of companies like VRBO and Airbnb can be wielded quickly and effectively.<\/p>\n

\u201cIn some ways, the bill has been highly successful already, because the purpose of introducing the bill is to cause everyone in this equation to take notice,\u201d Gardner said. \u201cI don\u2019t really have a strong notion about how short-term rentals ought to be assessed. I just have a strong belief that we ought to do something that\u2019s consistent and equitable. And that\u2019s going to require a lot of thoughtful discussion.\u201d<\/p>\n

Gardner offered the bill after hearing from El Paso County Assessor Steve Schleiker that county assessors across the state were debating how to classify short-term rentals.<\/p>\n

\u201cLeaving it up to 64 assessors is not a good idea,\u201d Gardner said, \u201cand, frankly, for the state legislature not to have a good conversation about this and not decide what to do is not responsible.\u201d<\/p>\n

\"A
A worker in the final stages of assembling modular homes at The Farm, a development in Buena Vista priced to give more residents a chance at home ownership. Short-term rentals have contributed to the housing crunch in Colorado\u2019s high country communities, some say.<\/span>Nina Riggio\/Special to The Colorado Sun<\/span><\/figcaption><\/figure>\n<\/p>

Schleiker is worried about the discrepancy between bed-and-breakfast operators and hotel and motel owners who pay commercial property tax rates while homeowners a few doors away who use VRBO and Airbnb pay significantly lower tax bills and are competing for the same customers.<\/p>\n

One reason the issue is so contentious in Colorado is because the state\u2019s residential and commercial tax rates are so far apart, Schleiker said. County assessors offer ideas, like differentiating between short-term rental properties owned by residents who live in the homes and those owned by investors. Or, how about creating a tax structure for short-term rental property owners that falls somewhere between residential and commercial? Or lowering the property tax rate for bed-and-breakfast owners to residential from commercial?<\/p>\n

\u201cBob said he wanted to start a conversation, and that\u2019s exactly what he did,\u201d Schleiker said. \u201cI think local communities should be gathering real estate brokers, representatives from short-term rental groups and neighbors who are not fans of short-term rentals, and coming up with ideas to make the system more equitable for everyone involved. Local communities should be pushing the law to Denver, not Denver pushing laws out to local communities.\u201d<\/p>\n

This isn\u2019t the first time Colorado lawmakers have proposed shifting short-term rental homes to commercial tax status. In 2018, the six members of a legislative committee studying Colorado\u2019s property taxes floated the idea as a way to fund schools.<\/p>\n

\"Jason
Jason Blevins\/The Colorado SunRow homes in Salida, which is among many communities in Colorado that are regulating short-term rental properties.<\/span>du1-i-syn<\/span><\/figcaption><\/figure>\n<\/p>

The idea failed quickly as homeowners and the multibillion-dollar short-term home rental industry united in opposition.<\/p>\n

But this is the first time that an actual bill that would shift residential properties into commercial tax status has been submitted in a U.S. statehouse, said Matthew Kiessling with the Travel Technology Association, which represents the heavyweights of the short-term rental world, including HomeAway, Airbnb, Tripadvisor and Booking.com.<\/p>\n

\u201cThere is quite a bit of opposition to this and that\u2019s for good reason,\u201d Kiessling said. \u201cI don\u2019t think people have really thought through this fiscal ramifications of a move like this.\u201d<\/p>\n

Airbnb and Homeaway could see their entire business model collapse in Colorado if the state starts spiking property taxes on short-term rental homes. But as the industry settles into millions of homes in thousands of communities across the world, the impact of people pulling their homes off the short-term market would ripple well beyond the bottom line of huge corporations.<\/p>\n

And Kiessling\u2019s job, as vice president of short-term rental policy for Travel Tech, is to describe those impacts. His take goes like this: A person with a home near a Colorado destination knows they can rent to enough visitors to cover their roughly 8% residential property tax bill. They don\u2019t know if they can cover a 29% tax bill.<\/p>\n

So if their home is taxed as a commercial property, Kiessling said, \u201cmany people will back out of the short-term rental market.\u201d<\/p>\n

And then the local community loses lodging tax revenue if those rentals go away.<\/p>\n

In Denver and Breckenridge \u2013 which are Airbnb\u2019s top two short-term rental markets in Colorado, with visitors spending $51 million in Denver and $16.5 million in Breckenridge in 2017, according to the company\u2019s most recent Colorado report \u2013 that means several million dollars in lost tax money. Then the decline in visitors hits the local sales tax revenue stream as fewer vacationers spend money. Then the tourism economy shrinks and workers lose jobs.<\/p>\n

\u201cAll the jobs, all the visitors go right out the window, and I think that piece of this just hasn\u2019t been thought through,\u201d said Kiessling, who is submitting testimony to the Senate Finance Committee.<\/p>\n

Don\u2019t forget that Airbnb and Homeaway have fought before. In 2016, Airbnb sued San Francisco over the city\u2019s demand that property owners register before offering their homes as short-term rentals. In 2018, Homeaway\u2019s parent, Expedia, joined Airbnb in suing New York City over the city\u2019s demand that the websites share the names and addresses of homeowners who use the online marketplace. Those lawsuits were settled, with the short-term rental platforms reaching deals for streamlined registration for homeowners and access to some details so New York City could identify tax scofflaws.<\/p>\n

In Colorado, Airbnb has deals with 23 communities to collect lodging taxes. VRBO does the same in six communities.<\/p>\n

\u201cThe first group that gets impacted, and the ones that make the most noise right off the bat, will be the homeowners,\u201d Kiessling said.<\/p>\n

On the other side are resort communities struggling with limited affordable housing. State Sen. Kerry Donovan, a Vail Democrat who represents a wide swath of the Western Slope, said people are finding it hard to find homes in places like Crested Butte and Salida as properties are snatched up for short-term rental investments.<\/p>\n

\u201cIn some communities, the availability of affordable housing isn\u2019t there because so many properties have been transferred to Airbnb,\u201d she said, meaning lower-wage workers can\u2019t find a place to live. One business closed in Buena Vista after nearly 20 years \u201cbecause they could not find employees.\u201d<\/p>\n

Lawmakers realize there\u2019s a need for legislative action. While they don\u2019t know what that is, they all agree that Senate Bill 109 is definitely not the right or most well thought-out approach.<\/p>\n

\u201cThere\u2019s a real issue there, for sure,\u201d said Senate Majority Leader Steve Fenberg, a Boulder Democrat.<\/p>\n

Gardner, a conservative Republican who said he\u2019s been \u201cgetting feedback every hour\u201d on the bill, wants three things to be clear:<\/p>\n

He doesn\u2019t want to increase people\u2019s taxes<\/em>He doesn\u2019t want to damage people\u2019s real estate investments, especially homeowners, like an elderly person or single parent, who rely on short-term rentals to pay for their properties <\/em>He doesn\u2019t want property assessments to be used to carry out affordable housing policy, though he recognizes that short-term rentals likely contribute to Colorado\u2019s affordable housing problems<\/em>Gardner said he just worries that the assessment discrepancy has created an unlevel playing field for bed and breakfasts and hotels and motels. \u201cThat seems to me inequitable.\u201d<\/p>\n

On the of chance his bill does pass, Gardner thinks that it will likely only create a task force to study the issue to be addressed down the road.<\/p>\n

One thing is for sure, Gardner said, \u201cI grasped the nettle.\u201d<\/p>\n

The Colorado Sun is a reader-supported, journalist-owned news outlet exploring issues of statewide interest. Sign up for a newsletter and read more at coloradosun.com.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Industry urges people to flood the Capitol; affordable housing advocates celebrate<\/p>\n","protected":false},"author":1,"featured_media":74796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[233,21,28,29,295,294],"naviga_topic":[],"class_list":["post-74795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-coloradosun-com","tag-cortez","tag-headlines","tag-newsletter","tag-water","tag-water-supply"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/74795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=74795"}],"version-history":[{"count":1,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/74795\/revisions"}],"predecessor-version":[{"id":90365,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/74795\/revisions\/90365"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/74796"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=74795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=74795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=74795"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=74795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}