Aspen Puts Kibosh On New Construction, Short-Term Rental Permits

An emergency ordinance passed by Aspen’s city council last week put a halt to all new short-term rental permits, as well as permits for all home construction projects, in an effort to combat the city’s increasing lack of affordable housing.

“It’s not outlandish to say all our mountain communities are experiencing an existential crisis on this nexus of housing, overtourism, community identity and protecting our environment,” Phillip Supino, Aspen’s director of community development, told The Colorado Sun.

Prior to the city council’s vote on the decision, city workers were scrambling to process 182 new applications for short-term rental permits filed at the 11th hour by property owners hoping to squeeze into the market before the council had time to make a final decision, in what would end up being a unanimous vote against any new permits, The Sun reported.

Aspen’s Emergency Ordinance 27 bans new-construction permits that will increase a property’s living area, square footage or building height in the hopes of clamping down on homeowners’ potential projects for future vacation rentals in a city that feels overrun by them.

Although many of the city’s residents expressed support of a move that they felt was preserving their community and helping to prevent residents from being priced out, other local vacation rental owners and individuals in the building industry expressed frustration.

“This is such a knee-jerk reaction,” Tracy Sutton, owner of Aspen Signature Rentals and manager of about 104 homes, told The Sun. “The council gave us less than 24 hours’ notice … and they have not reached out to anyone in the rental community. I don’t think they have accurate data. This is obviously not well thought out. No one seems to be able to answer why this is an emergency and why it had to happen in one day.”

Some objectors pointed out at the city council meeting that the complete ban on all new construction jobs would also prevent residents from making green updates to their homes as the community works to meet its environmental goals (about 75 percent of the local landfill is reportedly full of waste from construction projects). Others argued that such a quick move could not have been properly considered from all angles.

“What is the emergency?” Kim Raymond, a local architect, asked The Sun. She added that the ordinance stated a desire to “restore public confidence in the development process,” but that “doing something this quickly does not do that.”

Likewise, Bill Stirling, an Aspen broker with Douglas Elliman who was also mayor of the city during the 1980s, said he felt issuing an order in this case was unfair to the public.

“I feel it’s an abuse of the process to use an emergency ordinance to do a thing that is worthy of discussion and attention,” he said. “It locks the public out.”

The city’s short-term rental permits that were issued in 2021 will continue through September. Permit holders will also be able to renew those permits next year. However, no new permits will be issued for 2022.

Supino said that the council’s decision came after years of discussing with community planners the city’s myriad issues related to affordable housing, short-term rentals, the area’s surging real estate demand and prices, as well as the city’s environmental goals and desire to preserve the community’s character.

Real estate spending was up 13 percent year over year in Pitkin County as of October, according to Land Title Guarantee Co. And the majority of that spending was concentrated in Aspen, where $2.34 billion across 397 deals was spent through October. Now, the average price of a single-family home in the city is $12 million, up from $10.5 million the year before.

Supino said that the halt to construction projects won’t impact permanent Aspen residents much since the city’s short-term rental and vacation home market has been segregated from the permanent residential market for decades. The new city ordinance states that the local market “no longer delivers meaningful housing for local residents” and that “the vast majority” of permanent residents live in deed-restricted or subsidized housing.

Visitors staying in short-term rentals from January through August spent about $50.7 million in Aspen. Due to the city’s 2 percent lodging tax, about 1,200 short-term rentals throughout the city yielded roughly $1 million to go back to the city.

Likewise, the city of Aspen had collected about $5.9 million in development fees on construction projects through the first week in December in 2021, compared to a total of $5.8 million development fees throughout 2020.

Although builders like Bob Bowden worried during the council meeting that the ordinance would result in the sacrificing of hundreds of construction jobs, the council said that projects currently underway or planned and permitted will provide the industry with ample jobs for months.

“We believe that taking a pause to address these code-related issues, while inconvenient, is not detrimental in the long run,” Sara Ott, city manager, told The Sun. “It is a big deal for city council to take this action. But they believe it is critical to make sure the community plan is being truly executed as intended by the community. They don’t see what’s coming through in these development applications as meeting that intent.”

Aspen isn’t the only place battling with short-term rentals — California has received a lot of attention in recent years for seriously restricting short-term rental permits. New York City, Honolulu, New Orleans and Las Vegas all have pretty stringent regulations as well when it comes to marketing and obtaining short-term rental permits.

Generally speaking, community conflicts with short-term rentals often boil down to many of the issues highlighted in Aspen’s case: ensuring that communities retain their fabric and that permanent residents aren’t priced out of their homes.

Email Lillian Dickerson

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