Aspen City Council reviews short-term rental program
Madison Osberger-Low/The Aspen Times
Aspen City Council met Monday to review the city’s short-term rental program, focusing on its financial impact, effect on workforce housing, and regulatory challenges.
The discussion marked the first comprehensive evaluation since new regulations took effect in 2022.
City of Aspen Lodging and Commercial Core Program Manager Emmy Oliver framed the conversation as a series of refinements rather than sweeping policy changes.
“We feel that these are relatively minor tweaks that we think will help staff fine-tune some aspects of the STR program,” Oliver said. “We want these potential changes to make the STR program work even better for the customers and staff.”
Oliver led the discussion on key topics, including tax revenue, permit availability, enforcement, and the strain STRs place on local housing.
Since the program’s inception, STR excise tax revenue has totaled $10.3 million, with $7.2 million directed toward affordable housing development. The remaining funds have supported infrastructure and environmental initiatives, with $2.3 million allocated to the city’s Asset Management Plan Fund and $774,864 to the General Fund.
Council scrutinized the city’s permit allocation system, particularly the STR-C permits designated for investment properties.
In several residential zones, demand has outstripped availability, creating a backlog. The R/MF zone alone has a waitlist of 46 applicants, a situation compounded by the number of permits issued before the current cap system.
“Until the additional permits are abandoned in zones like R/MF, and the number of existing permits fall below the caps, the waitlists will only get longer,” Oliver said.
Staff estimated that it could take up to two years before the first applicant on that list secures a permit.
Council members debated whether the current cap system effectively preserves neighborhood character and limits STR expansion or whether modifications were necessary. Despite differing opinions, the council reached a consensus to wait for more data before considering adjustments.
Council member Bill Guth questioned the methodology behind zoning-based caps.
“I am not sure if the intent of cap restrictions is characterized by these zone districts,” Guth said. “I also do not know if there is a better, more scientific way to do this.”
Council member Sam Rose acknowledged the divisive nature of the issue.
“I know there are people in the community who would like to get rid of STRs, and at the same time, they have a benefit to the community,” Rose said. “I definitely need more information to understand the benefits of the zoning districts before making a decision.”
He noted that council feedback on STRs often comes from property owners and managers rather than residents directly affected by them.
Staff reported an 8.9% decline in overall STR units since 2023, largely due to conversions to long-term rentals, property sales leading to permit forfeitures, and some owners exiting the STR market. This raised concerns about the city’s non-transferability rules, particularly in estate planning scenarios.
Under current regulations, if an STR permit holder passes away, the permit cannot be transferred to a surviving spouse. Guth proposed amending the city’s code to align with real estate transfer tax provisions.
“That code is broader than just the death of an individual. It can help with estate planning in advance of death and really help in a lot of events,” Guth said. “It still prevents the transfer to a third party, but we have a process that works for this, and I think we should adopt this for STR permits.”
Council agreed that staff should explore potential changes to the non-transferability code.
Compliance and enforcement remained key discussion points. While 85% of STR operators adhere to city regulations, 15% remain out of compliance. Since 2022, the city has documented 53 violations, mostly related to noise, smoke, and nuisance complaints, yet only three have resulted in formal Notices of Violation.
Another contentious issue was the annual permit renewal process for STRs within homeowners’ associations (HOAs). Currently, STR operators must obtain HOA approval each year, a requirement some council members argued should be managed by HOAs rather than the city.
Council continued to direct staff to explore additional changes to public notice requirements and tax filing procedures, emphasizing the need to streamline the overall STR process.
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