Short Term Rental Changes in Breckenridge & Summit County
Throughout 2021 and 2021, there has been significant discussion about the lack of affordable housing in Summit County for local employees and how to potentially alleviate the workforce housing crisis. Stemming from those meetings and discussions, there has also been some new legislative activity in Summit County regarding short-term rental (“STR”) licenses for local properties. Below is a summary of what’s recently transpired regarding STR licenses in Summit County.
Breckenridge Cap on Short-Term Rental Licenses
The Town of Breckenridge previously adopted regulations requiring Breckenridge short-term rental property owners to obtain STR licenses. On September 28, 2021, after listening to several hours of additional public comment (much of it in opposition), the Town Council unanimously passed an ordinance capping Breckenridge short-term rental licenses for non-exempt properties. The ordinance goes into effect November 2, 2021.
As a brief review, regardless of whether it’s a timeshare, partial ownership or full ownership property, an “exempt” property is one that essentially operates in a hotel environment with 24-hour security and front desk. The Town Council currently recognizes exempt properties in twelve Breckenridge subdivisions. A “non-exempt” property is pretty much any other Breckenridge residential property.
The Breckenridge Town Council adopted a cap on new short-term rental licenses for non-exempt units at a maximum of 2200 licenses. Presently, there are about 3000 non-exempt licenses. Because the number of present Breckenridge STR licenses exceeds the cap maximum, the STR license cap acts as a moratorium on new Breckenridge STR licenses, until numbers are reduced. The Town intends to reduce existing Breckenridge STR licenses through attrition. Accordingly, as owners sell their properties or decide not to renew their existing STR licenses, the license level will be reduced. It’s uncertain how long it will take for the license level to be reduced to the 2200 level, but it’s likely not just a matter of a few months. Once the Town hits that target, it will issue licenses based on a waiting list. When the Town eventually provides a wait-listed Breckenridge property owner with notification of eligibility, the property owner will have 5 days to apply for a STR license.
Current Breckenridge property owners may apply for STR licenses up until November 2, 2021. Properties under contract must have been fully executed on or before September 27 to qualify for a STR license. For units under construction, if a building permit was issued and in effect on September 14, 2021, owners may eventually apply for a STR license within 20 days of eventually receiving a certificate of occupancy.
(Edit – October 11, 2021)To clarify circumstances existing between Sept. 28, 2021 and Nov. 2, 2021, the Summit Association of Realtors published the following scenarios after obtaining approval for the wording from Town of Breckenridge staff:
- Property goes under contract after 9/28 and closes before 11/2/2021 – the deed has to be dated no later than 11/1/2021, the new owner can apply for a license after they sign the deed but prior to 11:59 pm on 11/1/2021 at www.townofbreckenridge.com/shortterm
- Property goes under contract on 9/28 or before, the closing is before 11/2/2021, and the seller does not have a current license – the deed has to be dated no later than 11/1/2021, the new owner can apply for a license after they sign the deed but prior to 11:59 pm on 11/1/2021 at www.townofbreckenridge.com/shortterm
- Property goes under contract on 9/28 or before, and the seller has a current license – the buyer has six months from the date of going under contract to close on the property, and they can apply for a license within 20 days of closing.
- Property goes under contract on 9/28 or before, and is closing 11/2 or after and the seller does not have a license.
- Property without a valid STR license goes under contract on or before September 28
- The seller applies for a license prior to 11:59 pm on 11/1/2021. The application is completed and the fees are paid prior to closing.
- Property closes and title is transferred sometime after 11/2.
- At the time of title transfer, the seller has a valid STR license so the exemption we discussed applies and the new owner can apply for and receive a STR license regardless of the cap. (as described in option 3 above)
- Property goes under contract after 9/28 and doesn’t close until 11/2 or after – the new owner can apply for a license and will be put on a waiting list until the current number of licenses goes below 2200. The town will offer a temporary 6-month license to accommodate existing reservations. No license or other options will be available.
Summit County Moratorium on Short-Term Rental Licenses
The Town of Breckenridge has narrowly defined geographical borders, and a surprising number of properties nearby to Breckenridge are actually in unincorporated portions of Summit County (hereinafter, just “Summit County”) or in the Town of Blue River. As a result, it’s also potentially important to review recent STR changes adopted by other local governmental entities. Turning first to the Summit County Board of County Commissioners (“BoCC”), it too previously adopted regulations requiring Summit County short-term rental property owners to obtain STR licenses. Like Breckenridge, the BoCC has also recently conducted meetings to hear public comment and discuss solutions to the local housing crisis. As was the case in Breckenridge, these meetings featured significant public opposition to restricting STR licenses. Nonetheless, on September 14, 2021, the BoCC passed a temporary 90-day moratorium on new STR licenses. STR license renewals and conversions remain unaffected. It’s also important to note that the BOCC’s 90-day moratorium in Summit County did not establish any type of a cap on STR licenses. In addition, it wholly excluded the Keystone, Copper Mountain and Peak 8 resort areas. The BOCC’s moratorium for Summit County is already in place, having taken effect at 11:59 p.m. on Sept. 17, 2021. During the temporary moratorium, the BoCC and County staff will examine data with the aim of proposing narrow regulatory amendments that will prevent the continuing loss of long-term housing units.
Blue River Short-Term Rental Properties
The Town of Blue River previously adopted regulations requiring Blue River short-term rental property owners to obtain STR licenses. The Board of Trustees (“BoT”) for Blue River had a brief discussion about STRs at its retreat in August 2021 and then again in September 2021. As of September 2021, the BoT noted that 18% of properties in Blue River were licensed as STRs. At a work session set to occur in November 2021, the Trustees intend to discuss and evaluate the overall future plan for STRs. However, there is no plan currently on the table. Whether Blue River decides to adopt any new regulations is currently an open question.
Dillon Short-Term Rental Properties
The Town of Dillon previously adopted regulations requiring Dillon short-term rental property owners to obtain STR licenses. On September 21, 2021, the Dillon Town Council convened a meeting on workforce housing solutions, and it initially appeared the Council might pass an emergency 7-month moratorium on new Dillon STR licenses. During the meeting, Dillon staff noted there were approximately 1,365 residential units in Dillon; of those, 281 currently possess active STR licenses. That amounts to more than 20% of Dillon’s total housing stock. However, after extensive discussion and citing the need for additional research, the Dillon Town Council chose not to move forward with the emergency ordinance. Instead, the Dillon Town Council decided to earmark additional time to the STR topic on a biweekly basis. Over the upcoming months, the Dillon Town Council intends to dedicate at least an hour at each work session to workforce housing and STR conversations. The Dillon Town Council noted the potential for STR license caps, STR occupancy limits, STR license fee increases as well as possibly asking voters for a new tax increase. The Dillon Town Council also plans to facilitate community meetups for discussion on the issue to ensure that local residents and second home owners have ample opportunity to be heard.
Frisco Short-Term Rental Properties
The Town of Frisco previously adopted regulations requiring Frisco short-term rental property owners to obtain STR licenses. At present, the Town of Frisco is researching options but is not yet leaning toward taking any particular action regarding STRs.
Silverthorne Short-Term Rental Properties
The Town of Silverthorne previously adopted regulations requiring Silverthorne short-term rental property owners to obtain STR licenses. The Town of Silverthorne is just watching developments at this time. The Silverthorne Town Council has no STR agenda items or STR actions planned at present.
If you’re interested in further discussing local real estate and how STR license changes might potentially affect your decision to buy a property in Summit County, please don’t hesitate to contact Philip for help.