Glenwood Springs City Council voted unanimously to amend municipal code regarding vacation rentals during their May 2 regular meeting. 

The agenda item brought to council by the Economic and Community Development department was on the consideration of amending code text regarding the regulation and permitting of accessory tourist and short-term rentals in the city. 

In addition to the impact of vacation rentals on the character of residential neighborhoods and the availability of long-term housing options, ordinance language states that two of the reasons for the consideration of these changes are that “the number of vacation rentals in the city has increased by over 1,000% since 2013” and that “the Regional Housing Study concluded that the city currently has a shortage of 2,000 housing units.”

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The agenda item was a continuation of a February 18 work session on existing short-term rental regulations. Prior to these conversations, the last major change to regulations was in 2019 when the city council added requirements for building inspections and instituted a 250-foot buffer rule which required a new permit to be located at least 250 feet from the nearest existing permit, according to information from the May 2 city council staff report.  

The buffer’s purpose was to disperse the impacts of short-term rentals throughout the community. However, any short-term rentals that acquired a permit before the 2019 changes could continue operating even if they were closer than 250 feet apart.

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Permits located within the General Improvement District (GID) are also exempt from the buffer rule. The GID is a special tax district encompassing roughly 10 full blocks (and some partial land blocks) from 7th and 10th Street between Pitkin and Bennett. 

The buffer rule currently only limits Short Term Rental (STR) Permits, which allow for the rental of an entire dwelling unit for a period of 30 days or less (without an on-site property owner). The same rule, however, does not apply to Accessory Tourist Rentals (ATR), which are a rental of one bedroom in a home (with shared access to a kitchen) for a period of 30 days or less, with a property owner present on the property. 

Currently, there are 121 STR permits in the city, with a cap of 5% of free market units for citywide permits (approximately 210 units) and a cap of 18% of total market units for permits within the GID (36 units), compared with 10 ATR permits with no maximum caps, according to the May 2 staff report.

Code amendments

The code amendments, passed by city council, will impact the following vacation rental regulations: 

Permit caps: Currently, the citywide permit cap (5%) does not include existing permits within the GID (18%). The code change will include GID permits in the total permit count. This means the city is close to 60% capacity for STR permits, rather than 48% before GID permits were counted with the total. 

“We’re quite far from being at capacity with (the cap) part, but the buffer does a good job at dispersing everything,” City of Glenwood Springs Planner Emery Ellingson said during his presentation to council. “We’re not telling people, ‘You’re not ineligible because there’s no more permits left, you’re ineligible because you’re too close to an existing permit.” 

General Improvement District cap: The code amendment would also reduce the GID cap to 15% of free market units from 18%, with rationale to help alleviate possible parking issues downtown and help preserve residential units. This will decrease the total permits allowed within the GID to 31 from 36 (based on available number of free market units, which can increase as new units are built). 

Application timelines: Current code does not specify a timeline for the permit process. The now-approved amendments will apply a six-month period to complete the permit process, with possibility for a six-month extension. It will also require a Certificate of Occupancy prior to application for a permit. 

Penalties and violations: This section of code amendments addresses some gaps in the code language, according to Ellingson. It was changed to read that, “A short-term rental permit shall be revoked automatically upon third cumulative conviction of a property owner, tenant, or guest (as opposed to just a property owner) for a violation occurring upon the premises … with respect to the short-term rental.” 

“There already is a lot of teeth (in the code), but the changes would just help tighten that up a little bit,” Ellingson said. “Fortunately, we’ve not had to use it much.” 

Ownership models: Current code prohibits the transfer of an STR or ATR when a property is sold. When properties are bought and sold between LLCs, trusts or other group ownership models, it is less clear to whom the ownership is being transferred. Roughly 18% of total permits in Glenwood Springs are held by an LLC or trust. Approved changes to the code include: 

• Any permit held for a property owned by a trust or LLC will be required to designate a natural person as the permit holder, which would constitute a transfer of ownership if that person no longer holds an interest in the trust or LLC. 
• The natural person applicant must be 18 years or older and hold a 33% or greater interest in the ownership of the property. They must also submit their ownership information at the time of permit application and renewal. 

Councilor Sumner Schachter made a motion to accept all recommendations from the city’s Planning and Zoning Commission as listed above, which passed unanimously, (Councilor Marco Dehm recused himself from the vote due to a conflict of interest).

“I feel like this embraces both community need and opportunity for our current residents to engage in (a) small business model, and to recognize the evolving nature of vacation rentals,” Councilor Erin Zalinski said.  

“A lot of people don’t want a short-term rental next to them, and that’s the reason that we pull it in a little bit,” Mayor Ingrid Wussow said. “From a real estate perspective, in the last year, I have sold homes that were short-term rentals, meaning that that permit ceased to exist at the transfer of ownership … so I think it’s a pretty organized system, I think it’s actually working well.” 

Wussow said she approved of the proposed code amendments being close to existing regulations, as they provide a balance between letting private owners handle their property how they want, while making sure that the number of short-term rentals remain the minority among single and multifamily residential housing. 

“There’s private ownership,” Wussow added. “People should be allowed, to a degree … to use their home in the capacity that they want to.” 

Ellingson said Glenwood Springs currently has 4,211 free market units. 

“Knowing that there’s 125 (short-term rentals) in town, that’s negligible,” Wussow said. “I live next door to one, so I know what the impact of them is.”