Regardless of all the talk of a recession, soft landing, or something in between. Many…
Aspen is following Breckenridge’s lead with substantial changes to Aspen nightly rental regulations. Aspen is proposing a cap on the number of units along with a cap on the number of rental days allowed. How will this impact real estate prices in Aspen? What does this mean for existing property owners? What does this mean for surrounding communities?
What is in Aspen’s nightly rental regulation proposal?
Aspen City Council is zeroing in on regulations on the local short-term rental industry, and Monday night they agreed on capping the number of permits to 75% of existing ones, which allows for 398 residential units across town. There are currently 535 short-term rental permits active, which is 11% of all residential units.
Most of the council also favored grandfathering existing short-term rental permits in all zones, freezing the current market in place. Staff will use no transferability, abandonment, and enforcement to reach the capped amount through attrition over time.
Council members tentatively agreed with staff’s recommendation to also limit owner-occupied short-term rentals of 90 days per permit year but want to have further discussion when they consider it in an ordinance later this month.
Is Aspen “taking” property rights
Every time I send out anything on nightly rentals, I always get angry e-mails back that the government is “taking” away property rights. Unfortunately, this statement is a stretch as there is clear case law throughout the country that allows cities/counties/etc… to regulate zoning. For example, most Colorado ski towns do not allow Liquor stores next to residential treatment centers or schools. Aspen, like other cities has broad latitude on regulating appropriate uses that has been confirmed by courts throughout the country.
Other mountain towns moving towards more nightly rental regulation
Aspen is not unique. Breckenridge has also placed caps on the number of nightly rental permits. Steamboat is now proposing:
The Steamboat Springs Planning Commission passed two amendments on Thursday, April 28, recommending several short-term rental policies and a zoning map that, if approved, would restrict the number of short-term rentals within specific subzones. The red zone would prohibit all short-term rentals. The yellow would allow short-term rentals but with caps on licenses, and the green zones would have no caps but would still require licenses and ongoing compliance with the city’s rules.
You will see more Colorado ski towns moving towards some sort of a cap to better balance tourism with resident’s needs.
How will the new nightly rental regulations affect real estate values in Aspen?
Aspen, Steamboat, Breckenridge, Crested Butte and others have drastically changed their nightly rules but the surrounding communities/rest of the county has not. For example, when Breckenridge capped the number of nightly rental permits you saw a huge influx in areas like Silverthorne, Dillon, Copper Mountain, etc… The same will occur around Aspen. There will now be a goldrush to have nightly rentals in Snowmass, Carbondale, and Basalt.
Regardless of the nightly rental strategy there needs to be better coordination with surround communities/county to ensure the nightly rental issues don’t just get pushed to other communities.
How will Nightly rental caps impact real estate prices in Aspen?
I don’t see an impact one way or the other on prices. Since Breckenridge passed their nightly rental caps, it has continued to appreciate substantially. All the mountain towns are inventory constrained so any impact will be muted at best.
How will Aspen’s regulations impact real estate prices in surrounding communities?
Now that Breckenridge has a cap on nightly rentals, I’ve seen prices jump substantially in places like Copper Mountain that allow unlimited rentals. The same will occur in Snowmass, Carbondale, and Basalt with Aspen’s caps on nightly rentals
Aspen, Steamboat, Breckenridge, and every other mountain town is trying to balance tourism with full time residents. This has become tougher as Covid spurred a huge relocation movement of full-time residents to the various mountain towns which has amplified the conflicts. We are just at the beginning of the large changes in nightly rental regulations in Colorado ski towns and there is no end in sight to the changes occurring in every mountain town as more migrate to these areas full time. Remember, only full time residents get to vote for the city councils making these regulations, as more residents are less reliant on tourism the regulation on nightly rentals will only increase.
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Written by Glen Weinberg, Owner Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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