Wednesday, September 16, 2015

Short Term Rentals and Over Occupancy Enforcement [Council Watch]

by Osman Parvez
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We attended last night's City Council meeting. Council approved an ordinance limiting short-term rentals to primary homeowners for up to 120 days. Rental licenses would be required. Once implemented, second home owners will not be able to rent their property legally. Implementation won't begin until January.


Council's supposed intention is to encourage long term rentals. While council members considered the impact to second home owners, and acknowledged it would catch some people in the net they didn't want, they passed the ordinance anyway.  

I expect the impact will be a new revenue stream for the City (7.5% tax on short term rentals), higher short-term rental costs for visitors to the city, a small bump in the number of long-term rentals available, and a small number of new listings as some Landlords sell their properties. Airbnb and other online marketplaces scrub the address information. Thus, actual investigations and sting operations will likely be conducted by city staff in the near future. Don't be surprised if a staffer comes knocking on your door sometime next year, pretending to be a potential tenant.  
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If you've lived in this town for a while, you know that there are a huge number of over occupied properties in the City of Boulder. For many, living in Boulder would not be possible if they couldn't share housing with more than the allowed limit. This has a particular impact on the creative class. After listening to the public speak, Council tabled the vote on increasing enforcement of occupancy regulations.  

It's curious that Council is even driven to consider the new ordinance. There have been only 30 criminal cases in the last decade and 65% of investigations found no violation of the rules. Current rules state that no more than 3 or 4 unrelated tenants may occupy a residence, depending on zoning.  

The new proposal would shift more responsibility onto landlords by elimination of an affirmative defense (i.e. they didn't know, only three people were on the lease). It would also more than double fines for first and second offenses.   
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Last night, City Council also unanimously passed authorization of up to $41MM in Certificates of Participation (COP) to purchase BCH's campus in downtown Boulder (COPs are a legal maneuver to circumvent TABOR). The City is far from sure what it will do with the property. Expect it to be a much debated and potentially contentious issue in coming years. Closing is scheduled for early December.


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