The city of Aspen has implemented new software that allows it to track all vacation rentals within city limits offered across the internet, but finance department staff are waiting for direction from city council on regulatory changes that would pair the increased market transparency with enforcement capabilities.
At a work session set for Feb. 24, finance department officials will present council with a suite of options for changing short-term rental policy outlined in the municipal land use code. The meeting will follow up a November discussion, where council tabled a policy proposal that would require all operators of properties offered on the short-term rental market to get an individual business license tied to each property. That is a significant change from existing policy, where a property manager with a single business license may handle tax compliance for any number of units. This makes the market difficult to track, according to city officials.
However, operators of condo hotels, including the Gant and Aspen Alps, have raised concerns, since each of their unit owners would have to get a business license and pay the $150 annual fee. Other property managers who broker short-term rentals that are dispersed around town argued that forcing their clients to jump through an extra regulatory hoop would put them at a further disadvantage against property owners who choose to shirk paying sales and lodging taxes on short-term rentals and pass that savings on to their guests.
Earlier this year, the city sent out a notice that it is “reaching out to various stakeholders in the lodging community to solicit feedback on possible options and will include those statements in its messaging to the council at the Feb. 24 work session.”
City tax auditor Anthony Lewin, who has been working on short-term rental policy strategies, said that council will be offered options at that work session. These could range from preserving the status quo to enacting the policy proposed in October. That policy could also be amended with certain exemptions.
“We are trying to address all the concerns they had at the meeting we previously had,” Lewin said.
He said the basic framework that all short-term rentals should have a business license is still at the core of staff’s proposed direction, “but we are presenting other options that council may or may not choose.”
Requiring each unit to have a business license would help the city’s compliance efforts, now that it is using a software platform known as LodgingRevs to track short-term rental activity in Aspen.
The software has been in place since the first of the year. Lewin said that in January, it turned up 737 individual units offered as short-term rentals that generated over 4,000 advertisements on more than 30 websites the software tracks. With the business-license requirement, the city would be able to cross-check each unit listed online to see if it is complying with tax licensing requirements.
Regulations established in 2012 require all units engaged in short-term rentals to have a permit on file with the community development department. Currently, there are only around 50 such permits, Lewin said, indicating that the current system is not working.
“The city now has the capability to identify virtually all short-term rentals that are publicly advertised,” says the notice soliciting input from lodging community stakeholders. “With small changes to the municipal code, a significantly improved compliance program can be implemented, which could address the inequity in tax compliance and level the playing field with those who are currently in compliance. While there are multiple perspectives on how to enforce compliance with regulations and who to make exceptions for (if any); enforcement of current regulations will impact this industry even if no changes are made to the current code.”