“Trying to wrap your arms around smoke” is how some hospitality professionals have described trying to understand and quantify the growth of the short-term vacation rental market brought on by easier online access.
A review of data provided by Airbnb, the online rental platform, in comparison with records held by the city of Aspen, confirms this difficulty.
As the Jan. 25-28 Winter X Games were set to kick off in Aspen last month, Airbnb alerted the media that hosts using the platform would welcome 550 guests on the Thursday leading into the weekend, making for the highest number of Aspen arrivals in one day in Airbnb’s history. In total, there would be 700 guests coming to town and staying in an Airbnb-marketed unit, with the average host earning over $400 per night, company representatives said.
Fifteen percent of the hosts over X Games weekend were using Airbnb for the first time. Airbnb further reported that there are a total of 400 hosts in Aspen that have used the platform.
Airbnb and other online platforms make it possible for any property owner to easily market their property as a vacation rental. Accommodations range from multimillion-dollar homes and condos that have long been a part of the tourist bed base to units occupied by locals who decide to earn some extra cash with sporadic weekend rentals. In between are an unknown number of units that used to be part of the long-term rental market that are now exclusively offered to tourists.
The city of Aspen in 2012 updated its short-term rental policies, allowing unlimited rentals, so long as the host registered with the city, paid sales and lodging taxes and designed an on-call property management representative.
Tracking the growth of the market since then is challenging.
As of last week, there were 193 business license account holders categorized as tourist accommodations, according to the city’s finance department. (A business license is required to pay sals and lodging taxes.) This encompasses everything from traditional lodging properties to occasional Airbnbs.
“One account could be you renting out your couch on a short-term basis through an ad you run,” Don Taylor, the finance director, wrote in an email. “Another account could be the St. Regis.”
Another account could be a local real estate company that manages dozens of units available on Airbnb and other platforms.
Further, there is not always a clear distinction between traditional hotels and accommodations in what might otherwise be seen as residential property.
“Traditional property management companies have many individual condos and homes,” Taylor wrote. “Some lodging properties are condo hotels.”
The city’s business license software is limited in its ability to track trends over time. Finance department officials could not say how many new tourist accommodation accounts have come into the system over a given time period, or how long any particular amount has been active.
Trying to get a handle on the growth of the market “is a question we are trying to figure out as well,” said Anthony Lewin, a tax auditor in the finance department.
The city is planning to hire an additional tax auditor to deal with short-term rentals. Officials may propose an ordinance for council consideration that would require all short-term rental ads to list a business license number, which would make it easier to determine who is complying with regulations. The city could also contract with an outside firm that scours short-term rental websites to enforce compliance.
The other prong of the city’s register-and-tax approach to short-term rentals requires property owners to get a permit from the planning and zoning office. The vacation rental permit application form, available on the city’s website (https://www.cityofaspen.com/816/Vacation-Rentals), requires the applicant to affirm that they have a business license. It also requires the applicant to confirm with their homeowners association that applicable covenants allow vacation rentals.
Like the business license registry, compliance with the zoning permits is difficult to track.
The number of active vacation rental permits, which are valid for one year, stands at 61, according to the city’s planning office. That figure is not representative of the total number of units in the city available for short-term rental, since one permit may encompass many properties under common management. However, it seems to be a far cry from the 400 hosts reported by Airbnb.
City of Aspen senior planner Justin Barker wrote in an email that in 2017, the city issued more vacation rental permits — 61 — than in any year since 2012, the 68 were issued. 2013 saw 21 permits, with 44 in 2014, 28 in 2015 and 40 in 2016.
“We have issued permits for more properties than 60 in the past, but one of the problems is that many people either don’t understand that they have to renew it every year or forget to renew it,” Barker wrote. “We do not keep a running count of individual units, just permits issued.”
Barker further noted that city of Aspen zoning regulations do not allow the short-term rental of individual rooms within a larger home or apartment. The entire unit must be rented. However, numerous rooms within shared homes are available in Aspen via Airbnb.
“At this time, community development only enforces what we receive formal complaints on,” Barker wrote. “This is the same protocol with any other potential zoning violation.”
Since 2012, the city has received only one formal complaint related to vacation rentals, Barker added.
Another tricky area of short-term rental regulations relates to affordable housing. Aspen-Pitkin Housing Authority guidelines do not allow short-term rentals, but enforcement is typically conducted on a complaint basis. Even when someone is caught red handed, there is little APCHA can do in many cases if the offender promises to cease renting their unit in the future. Housing office director Mike Kosdrosky said he hopes to amend the guidelines to allow fines and other punishments if it can be documented that someone has violated short-term rental rules in the past.
Snapshot in time
Trying to understand shifts in the short-term rental marketplace has been of particular interest to the Aspen Skiing Co.
Many many of the town’s older ski lodges have been redeveloped in the last two decades, leading to a decrease in the number of available traditional hotel beds. SkiCo and others involved in the tourism sector would like to know to what extent an expanded short-term-rental marketplace has made up for this loss. And if short-term rentals are taking the place of traditional hotels, what are the broader community implications for the community, from long-term residents seeking housing to traffic patterns?
The SkiCo got some academic help with that question last year. Faculty involved with the University of Colorado’s Masters of the Environment graduate program reached out to company officials to see if there were any relevant case studies they could assign to students.
Michael Miracle, the SkiCo director of community engagement, worked with two graduate students over much of the last year on an evaluation of the short-term rental market from Aspen to Glenwood Springs.
The students, Whitney Dodd and Joseph Stein, presented their findings in December.
Dodd and Stein conducted an evaluation of all short-term rentals available on three of the industry’s biggest online platforms — Home Away, Vacation Rentals by Owner (VRBO) and Airbnb — using data from June of 2017.
This was but a snapshot in time, the students cautioned, since the marketplace is ever changing.
The CU students were able to quantify the total number of “sleeping spaces” available on each platform, as well as the average price.
They found that, in June of 2017, Home Away, which is the oldest of the online rental platforms, listed 5,624 sleeping spaces in Aspen, 3,051 in Snowmass Village, 227 in Basalt, 669 in Carbondale and 604 in Glenwood Springs. VRBO listed 2,165 in Aspen, 2,402 in Snowmass, 215 in Bsalt, 1,058 in Carbondale and 691 in Glenwood.
According to the graduate students’ research, Airbnb had 1,530 sleeping spaces available in Aspen, 1,388 in Snowmass, 433 in Basalt, 273 in Carbondale and 545 in Glenwood Springs.
Many of those listings are redundant and appear on all platforms, while some listings may be on one platform but not another.
The average price per person per night for all available units on these platforms in June was $206 in Aspen, $91 in Snowmass, $50 in Basalt, $43 in Carbondale and $37 in Glenwood.
Compare that to the average hotel rate in Aspen for June 2017 of $400, according to industry research group DestiMetrics.
Airbnb officials tout those comparatively lower prices as a benefit of increasing prominence of their service.
“We help cities like Aspen attract visitors by providing a variety of accommodation options at more affordable prices … ,” an Airbnb spokesperson wrote in an email. “ … For many Airbnb hosts, renting out their home on our platform allows them to earn extra money and keep their home, whether they live there full-time or use it part-time as a vacation home.”
But determining to what extent increased online access to the short-term rental marketplace constricts the supply of housing for longterm locals is difficult using available data.