Summit County BOCC Meeting Recap 10-5-2021

October 6, 2021

The Summit County Commissioners met on Tuesday, October 5, 2021 to discuss the incentive program to encourage second homeowners' conversion from vacation rentals to long term rentals, and the open house/town hall they are planning to get community input. They also met later in the day to get in to more details about the overlay districts and land use code for vacation rentals.

Incentive program

The first 15 conversions or the first 45 days of the program, whichever comes first

  • Studio                                   6 mo 5,500.00    1 yr 9,000
  • 1 bedrm                               6 mo 6000.00     1 yr 10,000
  • 2 bedrm                               6 mo 12,000        1 yr 22,000
  • 3 bedrm or larger             6 mo incentive $13,000 1 yr 24,000

After initial roll out, the incentive will be lowered somewhat:

  • Studio                                   6 mo 5,500.00    1 yr 9,000
  • 1 bedrm                               6 mo 6000.00     1 yr 10,000
  • 2 bedrm                               6 mo 12,000        1 yr 22,000
  • 3 bedrm or larger             6 mo incentive $13,000 1 yr 24,000

Owner incentive spring/summer program –

  • Studio                                   6 mo 4500           1 yr 7,000
  • 1 bedrm                               6 mo 5000           1 yr 8,000
  • 2 bedrm                               6 mo 10,000        1 yr 18,000
  • 3 bedrm or larger             6 mo 11,000        1 yr 20,000

Property manager incentive (updated structure based on feedback from property managers and the Board)

2 bedrm and smaller       $1,000 add $200 for 1 yr lease

3 bedrm & larger              $2,500   add $200 for 1 yr lease

Also put in a property manager competition –

First PM to convert:

5 units - $5,000

10 units - $15,000

15 units - $20,000

The Board is supportive of the incentives as drafted. Its open to all of the unincorporated areas of Summit County.

Planning to launch this October 15.

What is the marketing plan? Landing Locals will do a marketing blast, we’ll work with Summit County property managers, Open House. Now that you have finalized the details of the program, we’ll hash out a robust marketing plan. Joint program with Breckenridge (they are targeting Upper Blue conversions).

Upcoming Open House – October 7 starts at 5:30p at Silverthorne Library, then formal presentation at 6p (Note to Ashley – it would be good to get notice out to your partners). We haven’t seen it posted yet but can forward it to you as soon as we do.

Follow up town hall on October 14 (the two meetings will be similar – just at different locations in the County, then BOCC will discuss Oct 19.

Two different sections – 1. Incentive program and 2. Regulations

Staff/BOCC will kick it off. Two goals – share information, and get feedback from the public.

Boards/info to be posted at the event:

  • County map with resort zone inserts
  • Neighborhood maps with data (Dillon Valley, Wildernest, Peak 7)
  • STR regulations in other communities
  • Description of proposal: overlay types and license types
  • QR code with links to survey on website
  • Comment opportunities

How are they getting word out about the event? (note – Samantha and I have looked and haven’t been able to find anything about it yet)

Social media

Ads will run tomorrow & the next day in Summit Daily

Sharing with PIOs for neighboring towns

Commissioner Lawrence would like to get responses back especially on the neighborhood overlay and license types/caps proposal.

Commissioner Blanchard wants to make sure we capture who we are getting the input from – are they investors, full time residents, part time residents?

Commissioner Lawrence – we have not made any decisions yet, and I want to make that really clear. We really do want productive feedback.

Later in the afternoon of Tuesday, October 5th, the BOCC took up further conversation regarding STRs. We’ve highlighted a few points specifically as fyi on issues that we may want to have partners weigh in on.  At the end of the conversation, the BOCC talked about grandfathering, Comm. Lawrence seemed for grandfathering in existing STR license holders but the others (and staff) seemed less excited about that and assumed that come annual renewal, all licenses would be under the new license type requirements and caps. This topic will be shopped around at their upcoming Town Hall meetings – first of which is on Thursday at 5:30 pm at the Silverthorne Library.

Summit County Board of County Commissioners Work Session | October 5th, 2021

The work session started with a recap from staff of the September 28th discussion. Overall, we see a connection between the rise of STRs and the loss of LTRs and ownership housing. In 2020, 65% of STRs were in resort communities and 35% were located in neighborhoods. The percentage of STRs in resort communities now is about 55%. Most complaints about STRs are from those located in neighborhood areas and the number of STRs are rising faster than we are building homes. There are positive benefits to STRs but we are just looking at a different approach for STRs in neighborhoods v. those in resorts.

Summit also wants to look at fees currently charged to make sure the county is covering the cost of administration. We also want to look at waiving fees for someone who is allowing long term rentals.

There is not a lot of concern about the STR use in resort areas. The resorts areas are considered Keystone, Cooper, Peak 8, and Tiger Run. This comprises 65% of all STRs. Commissioner Lawrence asked why Peak 7 wasn’t included in the definition of resort area and how many STRs are in that area. The staff said they did look at Peak 7 but will speak about why it isn’t included. Staff shared that only 14% of our complaints come from the resort areas. Most of the STRs that already exist will continue to exist in the current regulations. The first aspect of this proposal is an overlay district. In the resort overlay zone, all the license types would be allowed in an unlimited basis in the resort zones. There could be a conditional use permit for those houses that have an occupancy over 19. There could be some areas where that is a touchier proposition.

As we look at those regulations, they apply to Summit County in its entirety. The reason for the overlay zones is we have defensible regulations that can be applied locally. The licensing requirement coupled with the overlay zones allows us to drill down into more specific regulations and how they apply to locations in the county so we are not trying to do fancy or unique spot zoning. With the overlay zone and licensing regulations we can capture those unique circumstance and we can address them in the various neighborhoods. It is super challenging to write a land use regulation that does not have uniform application so what we’ve done is a little bit of hybrid where we have the uniform application of the regulations with the other component that helps us be more specific and targeted in how it is applied.

Commissioner Lawrence said it would be helpful to have a definition of the resort zone. Staff replied that this will be done via a GIS map location so we can specify exactly where the limits of the resort zones are.  We are going to work to get more specific with the regulation and detail out how each of the overlay zones apply to the community in general. There are two overlay zones, resort zones and non-resort zones. Within both you can apply for three different license types no matter what zone you are in. If you want more than 19 people in your house you can apply for a Conditional Use Permit (CUP). There are 19 CUPs and 2 have been denied.  The CUP looks at not just occupancy but parking availability too. There are a handful of CUPs in Lewis Ranch. It isn’t the parking/limitations of four space but any occupation of 19 requires a CUP. With Lewis Ranch, it is an administrative, looking at it, yes approve it. Cooper handles the parking plan internally. They allow for some overflow in their larger parking lots. The question is whether we need a CUP in occupancy for over 19. It goes back to the compliant number and compliant percentage. We are seeing a small number of complaints so the question is how concerned are we of doing an additional review in the resort zones since they are designed for transient tenancy.

Cooper seems very straight forward when you think of the homes, while Keystone is more diverse. We’ve denied two houses in Keystone Ranch because of the neighbors (there are 19 approved right now). There is some value in having a system of being able to look at case by case.

There are a wide variety of reasons that might kick people out for getting a CUP granted i.e. ability for sewage system to handle the number of people. Given the context of where these properties are in resort zones, do we want to continue to evaluate them for occupancy. It seems like a good process to keep from looking at it.

About 1,500 properties are being affected by the 35% of STRs in neighborhood communities. There are three categories of operation: primary, second-homeowner, and lodging unit.  Most STR complaints are in neighborhood areas. Most units are property managed. If you are rented more often there is a higher likelihood of complaints. There is a lot of conflict between STRs and the neighborhood on Peak 7 which is why we consider it a neighborhood community. This shows that the frequency of complaints in neighborhood zones are higher and this might not be compatible.

Current trends in neighborhoods show that local ownership has dropped over the last few years and the change in the median value of houses has really skyrocketed. The county overall was a 69% increase in change of median value. Dillon Valley was 124%. Staff isn’t saying this is due to STR but that is a huge shift. This is before COVID. If you add in what COVID has done to real estate the percent value would likely sky rocket further.

Staff have developed three proposed license types – Type I: Locals, Type II: Second-Home STR, Type III: Lodging Business STR.

Type I: Locals (7% of STRs)

This is the most often used by other jurisdictions – Denver/Boulder. It assumes this is where someone is living and then they are using an extra room as an STR.  You prove this through local mailing address, drivers license + either tax return, W2, motor vehicles registration, voter registration, and/or confirming child is in school district. The pros are that this supports locals and local workforce housing, tourism, mitigates negatives of displacing locals or loud parties. The draft contemplates no limit on nights rented by potentially limiting entire unit rental to no more than 30 days. This would be unlimited in neighborhood and resort communities. This is supposed to be a locals friendly regulation. There were concerns about whether someone rents out three of their bedrooms is that more like a hotel. There is interest in a limitation about only allowing one booking party at a time to avoid that from happening. They acknowledged enforcement could be an issue. Commissioner Lawrence was really pushing for limiting room nights for rental like 50 days per year. You could either limit if you are renting your entire unit or the number of nights you rent a bedroom. There were concerns around the ability to enforce this. It would be nice if there was an evaluation tool on the front end to enforce this. Staff said if we are going to cap renting out a portion of the house or unit that becomes challenging for those doing it year around. Staff also reminded the BOCC that we are only talking about 7% of all STRs in this conversation.  Staff said we should ask for input on this specific issue of limits on booking parties or night limits during the open house on Thursday.

Commissioner Lawrence liked the suggestion on limits between renting one room v. the entire house. Someone asked of the 7% do we know the average number of nights and whether it is one room or the whole home. Staff didn’t have an answer to that. They’d like an answer to that because it is a major source of revenue for folks. There seems to be general support for this license type.

Type II: Second-Home STR (highest % in neighborhood zones)

The impact on neighborhoods is medium. This is a proposed cap on nights rented to reduce conflicts. Based on a housing survey, STRs are currently renting between 135-180 nights a year. We recently got access to Host Compliance data to review in more detail and our proposal will be a cap between 90-120 days a year. The pros are that the cap still allows property owners to STR but tamps down in the intensity of STRs outside the resorts. The cap also naturally incentivizes LTR and the county wants to look at exploring a fee waiver with the lease. The zones this would apply is unlimited in neighborhood and resort. Other cities have capped between 90-120 days a year. We don’t think it makes sense to go higher.

Someone said these nights per year is interesting as we think of seasonal rentals. If there is someone who wants a seasonal rental for six months and then use STR in the other months they can absolutely hit the 90, 120 nights a year. These nights aren’t spread out for a whole year and we might want to encourage people to focus the nights they use the rentals. The commissioners like to focus on the regulations in concert with the incentives they are rolling out. Where can someone take advantage of the incentive program and the rest of the time they have a soft touch approach so it will incentivize LTR for the other part of the year. The appropriate cap number is part of the feedback we are trying to understand and pursue. A commissioner asked if there was data to see if the complaints are seasonal? Staff said there is an uptick of complaints during the holidays and high impact times. Hot tubs are a big source of complaints. Fire pits are in the summer are also a big source of complaints. All the commissioners agree there has to be a methodology used to determine the cap. We know people are using STR because we don’t have enough lodging without them so where is the balance. The Commissioners want there to be a reasoning behind the cap. Someone said maybe through an open house survey question we can draw answers to this – ask the question like “in your opinion, how many nights would you be comfortable with.” One of the comments at countywide is whether we should differentiate between building types i.e. single family, condos, apartments etc. Should there be a differentiation in the cap between the two building types? The Commissioners expressed a concern that at some point we run the risk of making this too complicated and then we can never possibly enforce this.

Boulder County has a similar type 2 license and they got to 60 nights as a cap because they wanted those to be available in the summer specifically. We want to make room for an owner to occupy their house too so we are presenting this number of nights. The Commissioners would like to know if the majority of complaints are from multi-unit STRs or single family STRs. She’d like this information for the open house. There was also discussion about maybe utilizing a range for a night cap. One of the commissioners wondered how to use a room cap as an incentive to rent to locals the other part of the year. Staff said this might be hard data to get. Working backward, if we want to prioritize a 6 month lease, the lower number this gets capped, the higher incentive to rent. The IRS definition of primary residents is 183 days so we need to assume that folks in their second home are using 182 days or less so does that incentivize anyone at all to LTR because if you take those remaining half the year and 120 you can rent out so you can use 60 nights a year, she just isn’t sure this will incentivize. A lot of second homes are not conducive for LTR i.e. they are too big or whatever else.

Our two goals are the LTR issue and local housing and the impacts that these significant number of units are having in the neighborhoods. One of the commissioners said they’d support a 90-100 day cap as a discussion for the community and if we can dig into some of the data that would be preferred.

Type III: Lodging Business STR – This is about 6% of the license types.

The impact is high in neighborhood zones. All STRs currently operating in this manner can still STR as type II. The pros are that it helps to alleviate conflicts in neighborhoods (complaints and housing) and restricts true lodging businesses to appropriate areas. The zones are unlimited in resort and limited in neighborhoods. The potential exceptions in neighborhood zones are properties over 5 acres that can apply for a class 2 CUP, over 2 acres a class 4 CUP. This number would jump up if we added a sentence about whether the owners uses the property once a year. One of the pros of this license type is it moves the intense use to resort zones with some exceptions. As we look at these, there are properties that all come to mind. There are lots with huge houses we’ve never gotten complaints about. There is a home in Peak 7 but with an occupancy of 8 there have been multiple complaints. In Dillon Valley we get parking complaints.

We heard about the lots off Tiger Road last week. We are proposing that if a lot is over 5 acres it can be a class 2 CUP. Lots of three acres and lots of two acres, we can draw the line and say if it is over 2 acres it is a class 2 CUP. Staff explained that if you have a lot under two acres this use is not allowed but if you have a lot of two acres is might be allowed with a review by staff. She wasn’t there on it until she looked at some of the complaints. We got to two acres by looking at neighborhoods with lots of complaints. We have a lot of half acres subdivisions and one acre subdivision.

Of the total number of investor units, how many are on over two acres lots and how many are on under two acres lots? Moving forward with the type 3 non resort use STR, do the two acre and 5 acre sound reasonable or are they not differential. Is there a concern over trying to look at them segregated separately?  If you are telling us the majority of complaints are on 2 acres and below we don’t need to separate the 2 and 5 acre. The 5 acre or above is a decision on a staff level but can we post a sign. The goal is to ensure the neighbors know what is going on.

The commissioners agreed they need to figure out how to provide notice of when CUPs are under consideration. Commissioner Lawrence likes the class 2 and 4 proposal. Another commissioner supports either but to the transparency piece, it is important to provide neighbors a chance to weigh in. Commissioner Lawrence wants to understand how many 1 acre lots have STR licenses in the non-resort areas. Like single family homes not condos. If we are going to go to those sized lots would you entertain some sort of land use review? Staff said that creates a huge burden on our planning staff because a lot of those properties will come in pursuing a type three license. She is looking for data and information to understand how many STR licenses we have on one acre lots in unincorporated (single family non resort, one acre lots and this would be unincorporated summit county) she is sure that is a lot but we wouldn’t take away an active license. We can track that. Do you want to know half acre as well or just the half acre? Peak 7 is all half acre lots, Quandary is also mostly half acre lots. We can get that data. All the commissioners would like to see it. We’d like to see the number of lots and current STRs for one acre and half acre.

The next discussion was on neighborhood zone occupancy. Usually there are limits on 2 people per bedroom plus 2 for a maximum of 12.  We are seeing mostly 2 people per bedroom, the plus two we don’t see as much. Right now everywhere we have the CUP process we are doing away with it in the neighborhood zones unless it is part of the CUP process. When these regulations were established there was a significant amount of conversation about whether you can put 2-3 kids in the room. Defining occupancy numbers with a maximum is critical for the regulations and how to enforce and structure them on a broader scale. As you’ve seen, multiple bunk beds in every bedroom in the house, people do that. They also put bunk beds in closet to max out occupancy. Staff wondered if a maximum occupancy in neighborhood zones of 10-12 seemed appropriate.  Commissioner Lawrence would like feedback on this for the open house. There is also difference on bedroom size. Depending on the area, we might want different occupancy so we need to get feedback on this. Commissioner Lawrence asked if we can have a conversation about the ten maximum or do we not want to put a number of it. The only thing about ten maximum, I guess it depends on what size home it is. We can also get rid of the maximum and say two per bedroom.

We might look at lot size again and only have the max in the smaller lots in the two per bedroom. We could certainly try to figure out how to tie these occupancy limits back to the lot size. I’d rather go with lot size than neighborhoods. The reason these occupancy limits are so high is because of houses that are set. Is there a reason we wouldn’t have the proposed occupancy limits for type 2? This would be the proposed occupancy for type 1 and 2? This would all happen in the 90 day moratorium. There was also clarifications that any changes made would be an amendment to the code not a new code.

In terms of next steps, there will be BOCC work session in October and November, open houses on October 7th and 14th to received feedback. On November 1st there will be consideration of the code amendment with countywide planning commission. The first reading of the ordinance will be on November 23rd or 30th. The BOCC preferred November 23rd because the CCI conference lands on November 30th.  The second reading of the ordinance and public hearing for the adoption of code amendment will be on December 14th. There was a note at the bottom of the slide that the software will take a minimum of 8-10 weeks to implement. Each one of these dates are specific to the previous date. We only get to the 23rd if there aren’t any questions at the county wide meeting on the 1st. Comm. Lawrence requests a timeline based upon staff, if we have two commissioners available, we want to conscious of the staff time around the holidays. If we need another special meeting, we could do it the week of the 30th. If there are revisions recommended in countywide we may need to call a special meeting. CCI is the 29th – noon 1st. Which is the following week from Thanksgiving, therefore staff and commissioners will be out. Let’s all come back together on staff schedules and commissioners travel plans etc. so we can nail down a better timeline. Software timeline is 8-10 weeks staff clarifies.

Staff shares that all new licenses will be reviewed for compliance with new regulations, and all existing licenses renew in September, compliance with new regulations required a time of renewal in Sept. 2022. This would be an involved conversion. Comm. Lawrence asks if existing licenses will be grandfathered in. Staff says that after September 2022 the new regulations would go into effect, for example a Type III that doesn’t meet the requirements wouldn’t be able to continue to operate. Comm. Lawrence requests that we strike that and grandfather in STR licenses that have been existing. An existing license in Summit Cove would be able to continue in the same fashion without the limits. She confirms that they would have to keep their permit active and continue in the current fashion. Comm. Blanchard shares that he isn’t comfortable making this decision until we see the launch of the incentive program, Comm. Pogue says that she would need to understand the number of STRs that would consider. Comm. Lawrence asks if it is even legal, which she thinks it is but she didn’t imagine that we’d be going back and amending current licenses, but we’d wait for the attrition. Staff comments that two sets of rules in the software would be challenging, and that the goals would be achieved much further in the future. That is why a license is only one year and requires renewal. On average a home sells every 7 years.

Comm. Blanchard asks if this decision can be pushed off or it needs to be in the coming months. Staff shares that we need to think about it, but we could push to December. Comm. Lawrence thinks with the spirit of transparency we need to bring this topic of conversation to the town halls seeking feedback. They agree that they need comments from folks, but we also need the data. Staff comments that they won’t have this data on Thursday.

They conclude the presentation and ask for other questions or topics not covered.

Comm. Lawrence asks for more investigation on Peak 10 and the overlay decisions. She also wants to bring forward the “fractional ownership” as it relates to STR ownership. You can now buy a fractional ownership piece to a large home. Staff comments that time shares are exempt. Picasso is one of the models that they buy a home and split it up under and LLC. It is a model of fractional ownership. There are some municipalities that have restricted this use. Staff shares that she doesn’t think it really is a STR.

Staff is going to dig into the data requests and get back to them and looking forward to getting comments at the open houses.

The meeting is concluded.