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Mountain towns wrestle with short-term rentals

New report looks at how different communities are addressing illegal nightly rentals


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With the explosion of home sharing sites like Airbnb and HomeAway, communities across the globe are scrambling to find ways to regulate an underground economy that's keeping money out of local government coffers and placing pressure on already strained housing markets.

Some cities, like Santa Monica, Calif. and New York, have taken the iron-fisted approach, cracking down on short-term vacation home rentals (VHRs) through outright bans and stifling fines.

The results have been mixed, with many cities struggling to find ways to rein in a booming industry that some feel is stripping away the true character of communities.

In many mountain towns, however, where tourism and housing have been so closely intertwined for years, a wide range of tactics have already been adopted, and a new study shines a light on some of those strategies.

The 57-page report was commissioned by the Colorado Association of Ski Towns (CAST), and found that when it comes to VHRs, there is no one-size-fits-all approach.

"There's no simple silver bullet here," said Melanie Rees, a Colorado housing consultant who carried out the study. "It does require a concerted effort and a multifaceted approach that lasts over the years."

For many resort communities, the way to regulating VHRs began through a desire to bring these illegal nightly rental properties into the tax base. The problem, however, was finding them, a challenge when most home-sharing services do little to ensure the homes listed on their sites abide by local zoning laws.

Some towns have taken an aggressive approach, even issuing subpoenas to procure ownership and rental information from home sharing sites.

In Breckenridge, Colo., officials were able to track down illegal VHRs by using proprietary software that was offered to all CAST members.

"As far as the taxing issues goes, the town of Breckenridge is way on top of this," said Joyce Burford, executive director of CAST. "Now they feel they have captured more than 90 per cent of the short-term rentals in their area. They got them to get a business license and got them to pay the proper taxes."

However towns ultimately track down VHRs, it's essential to have a centralized database where the full scope of legitimate rental accommodations can be accessed, Rees explained.

"Tracking them is no small feat and communities have approached that as time permits with existing staff and that's not really good enough," she said. "It needs to be a continual thing and the communities that have mapped them have found it as a very effective tool both in educating neighbours and elected officials."

It's a move Sue Chappel, owner of Whistler-based vacation rental site alluraDirect, continues to push for.

"I think Whistler Blackcomb and have to become the top Whistler accommodation marketplaces in the world by profiling everything that's legal and available here," she said. "A booking from one of the local channels somehow has to become more desirable or profitable or easier than a booking from or Airbnb."

Other ski towns are less concerned with the loss of revenue than they are the potential loss of community character.

Durango, for instance, after much public consultation, decided to limit the number of VHRs to just one per block.

Jackson, Wyo. has taken an even stricter approach, and has, for years, completely prohibited short-term rentals from residential zones — despite recent pushback from home-sharing sites.

It's resulted in a housing trend that goes counter to what most mountain resorts — Whistler included — are currently experiencing.

"This one single zoning position has done more to help the market provide workforce housing than any other single thing I've ever seen," said Rees. "And that's because, in the absence of being able to build units that second-home buyers can buy and rent out when they're not using them, (developers) are building apartments, they're building housing for year-round locals."

Meanwhile, other mountain communities have found a kind of roundabout way to regulate short-term rentals not by prohibiting them from residential zones, but by instituting strict nuisance ordinances that come with hefty fines for things like noise complaints, parking infractions and over-occupancy.

"I think there's a lot to learn from the nuisance ordinances that have been put into place by ski communities," Rees said. "Neighbourhood impacts have been an increasingly big issue, and this is what's really come to the forefront in many cities."

Despite the varying approaches, Rees believes there are a couple "key ingredients" to regulating VHRs and ultimately ensuring a healthy, stable housing market. One is for officials to adopt "a long-range vision" to housing needs, something she feels fell by the wayside in many jurisdictions when the global recession hit in 2008.

The second is having a reliable revenue source that can support the housing needs of a community.

"Towns that have a tax dedicated to affordable housing... can plan ahead," she said. "They know their revenue, they can count on it and they can get these projects in the pipeline and have a steady stream of housing."

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