Owners seeking to rent their homes to vacationing visitors would have to be primary residents with permits and would pay the city’s lodger’s tax under regulations being discussed by the Denver City Council’s Sharing Economy Task Force.
The task force, which formed last spring in response to the growth of ride-sharing operations such as Uber and Lyft as well as the growth of vacation rentals, met Monday to discuss potential zoning regulations for the surging short-term rental industry.
Under Denver’s current zoning laws, it’s illegal to rent your home for fewer than 30 days. But judging from the hundreds of listings for homes on VRBO.com, HomeAway.com and Airbnb.com, many Denver residents aren’t paying attention to that law.
“This is a practice that exists,” Councilman Chris Nevitt said. “It’s a practice that is multiplying. We are trying to figure out how to manage a reality.”
Amie Mayhew, president of the Colorado Hotel and Lodging Association, urged the task force to consider collecting the city’s 10.75 percent lodgers tax from owners who rent their properties on the vacation rental market. The 76 hotels that rent more than 17,000 rooms in the city paid more than $63 million in lodging taxes in 2013, according to the city treasurer.
Mayhew also suggested safety regulations for permitted homeowners that would require carbon monoxide and smoke detectors as well as fire extinguishers.
The goal, she said, is “to create equity.”
She said any regulations should be a “simplistic and streamlined” structure for permits and licensing. Recent laws addressing short-term rentals in Portland, Ore., are too complex and few residents are complying.
“We would hate to see that in Denver,” Mayhew said. “The more folks who register, the more equitable it becomes for everybody.”
HomeAway recently announced plans to spend $100 million on marketing in 2015.
“This is an industry that will grow. There is more coming. We as the hotel industry strongly believe that this is something that should be regulated now,” Mayhew said.
Regulation would first require a zoning ordinance that allows short-term rentals. Then there would have to be a companion ordinance requiring licensing or permitting. Another law would address taxation.
Zoning changes would expand the list of allowed home businesses to include short-term vacation rentals.
That would require a $20 permit. Those permits would be available only to primary residents of the property, not a company.
Some council members questioned how the city would define “primary resident.” Would it be someone who lived at the property half the year or more?
There was some discussion about allowing small signs. Would homeowners be required to inform neighbors of their plans to short-term rent their property? How would the city enforce its regulations and inspect properties to make sure they were compliant?
Nevitt said he was convinced that short-term rentals could be taxed.
“I don’t see embracing a new model of lodging that doesn’t play by the same revenue rules as the old model of lodging,” he said. “We are here to embrace new models of business, but we aren’t here to pick winners and losers.”
Assistant city attorney David Broadwell said taxation and regulation of short-term rentals has become an issue “like a speeding bullet,” noting recent laws in Nashville, Tenn.; Austin, Texas; and San Francisco.
“Taxation is inevitably a big part of this in all other communities,” said Broadwell, noting that further research would show if the city would need to amend laws or simply enforce existing laws when it comes to collecting taxes from hosts of short-term renters.
Task-force chairwoman Mary Beth Susman urged her fellow council members to begin harvesting community input on potential regulations that would involve several different city departments.
“If we are going to regulate,” she said, ” we don’t want to make it so onerous that no one registers.”
Updated 2/24/2015 at 5:30 p.m.: This online archive has been corrected to reflect that task-force chairwoman Mary Beth Susman is not Denver City Council president.
