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FRISCO approves at first reading STR caps and further amendments and requirements.
Last Night the Town of Frisco approved a 25% cap on Short-term rental licenses within the Town on first reading. The current level is at just under 22%, leaving little room for growth in license applications.
Summit REALTORS® President Steve Fisher commended the Frisco Town Council for their efforts to collaborate on this substantive piece of STR regulations. Summit REALTORS® advocated for a cap higher than 25%- such as 30%- but is pleased with ongoing conversations about the issue and that we were able to provide suggested changes that Council accepted. The Council clarified that they would actively monitor the cap, and if the policy needs to be adjusted, they will look at it. The final vote on the ordinance will occur on Thursday, October 11th. The ordinance will go into effect in November, after a 30-day curing period. Many thanks to the REALTORS® who attended the meeting, in-person and virtually, and made cogent arguments regarding the ordinance.
SAR Leadership is happy that thanks to meaningful conversation, the Town is allowing properties under contract before October 11th to obtain a license. The Town allows units under construction to get STR licenses as long as they are submitted for a building permit and under review by October 11th. We are also pleased that the transferability of STR licenses is fairly defined in the ordinance. Again, pointing to the diversity of the financial stack and the varied ownership structures, closing the door on transfers of licenses in unique circumstances, such as LLC's and family situations, would be an unnecessary market disruption.
As REALTORS®, we like to find solutions to complex real estate and property issues such as these. We fully intend to work with the Town of Frisco in a positive manner in the months and years ahead.
The Frisco Town Council voted to approve with one dissenting vote by Council Member Andy Held, at first reading the following:
Agenda Item #2: Estimated Start Time 7:20pm First Reading Ordinance 2210, an Ordinance Amending the Code of Ordinances of the Town of Frisco, Colorado, by Amending Chapter 110, Concerning the Licensing of Business, at Section 11038, Concerning the Requirement for a Short Term Rental License; and 11039, Concerning ShortTerm Rental License Application, Term, Renewal and NonTransferability; all in Order to Establish a Limit on the Total Number of ShortTerm Rental Licenses Issued by the Town.
A copy of the full ordinance 22-10 can be found on page 158 of the Town of Frisco packet which can be found here:
You can view the testimony here:
The vote begins at the 4:00 mark.
Short-term Rental (STR) Regulations are still changing here in Summit County. The next Domino's to fall will likely be the towns of Silverthorne and Frisco. If you're looking to buy real estate and become a short-term rental host, I would encourage you to act quickly. Existing license holders are likely to have a leg up on holding their licenses while new applicants will face new challenges or be barred completely.
Short-Term Rental licenses are controlled by the officials in the jurisdiction of the property. Please keep in mind that the towns only control within their own town limits and some properties may appear to be in one town but are actually in Unincorporated Summit County. For example, many properties have a Breckenridge address but are not in the town limits of Breckenridge. If you're ever unsure just reach out and I can look up what jurisdiction a property is in or I can set up a search for only rental eligible properties.
Please also keep in mind STR licenses are subject to various license fees and sales taxes on rentals.
The Town of Breckenridge has capped rental licenses at 2,200 non-exempt licenses. There are currently around 4,000 STR licenses issued, meaning new applicants will need to join a wait list for what will likely be several years before new licenses are issued.
There are however "exempt" properties which do not contribute to the cap of 2,200 licenses. The town has stated that they recognize these buildings were built for the intent of short-term rentals. Many of these properties function more like a hotel than a condo building and must have an on-site front desk, 24-hour monitored phone system, and a 24-hour on site security. Due to being exempt, these properties have recently experienced a disproportionate price appreciation. The exempt condominium complexes are listed below:
For more information on Breckenridge Short-Term Rentals visit: https://www.townofbreckenridge.com/your-government/finance/short-term-rentals
The Town of Blue River has so-far resisted the pressure to restrict short-term rentals. However, the town limits of Blue River are a relatively small area. Areas people refer to as Blue River may actually be in Unincorporated Summit County. Permitting is still required.
For more information on Blue River Short-Term Rentals visit:https://townofblueriver.colorado.gov/lodging/short-term-rental
So far Frisco has yet to restrict short-term rentals but that is about to change. The town is expected to pass measures limiting short-term rental licenses to between 22-25% of the total number of housing units. Currently Frisco's housing is about 20% short-term rentals. Meaning if this measure passes there will be a small amount of growth still available but expect it to be absorbed quickly.
For more information on Frisco Short-Term Rentals visit: https://www.friscogov.com/departments/finance/sales-and-lodging-tax/short-term-rental-license-application-process/
Like Frisco, Silverthorne has so far not enacted a restriction on STR's but are expected to do so soon. Silverthorne is expected to cap STR's at 50% of total housing in the downtown corridor and only 10% in most other neighborhoods. If this plan passes, there will be approximately 400 new STR licenses up for grabs.
For more information on Silverthorne Short-Term Rentals visit: https://www.silverthorne.org/town-government/finance-administrative-services/short-term-rental-licenses
The Town of Dillon has yet to restrict STR licenses and is currently not expected to do so. However, the town did take a hit at occupancy on March 1, 2022. Rentals are now restricted to an occupancy of 2 persons per bedroom + 2 additional people. So a two-bedroom condo is restricted to a maximum of 6 occupants. That alone is as much occupancy as a reasonable host would want in their property anyway. However, to further limit occupancy the town also requires the owner provide 1 parking space per bedroom or reduce occupancy. I will note that most three-bedroom properties only include 2 parking spaces. Owners can rent an additional parking space from the town at a rate of $300.
Compared to other towns the Town of Dillon has a higher percentage of locals or second home-owners who do not rent which is why the focus was on occupancy. Limiting occupancy reduces the complaints of issues arising from STR's. However, as other towns limit STR licenses Dillon will undoubtedly become a focus for buyers looking to rent. In the coming years I predict more pressure will come on the town to limit licenses.
For more information on Dillon Short-Term Rentals visit: https://www.dillonco.gov/business/dillon-short-term-rental-str
Although Keystone technically falls under the jurisdiction of Unincorporated Summit County, the county has recognized Keystone as a Resort Overlay Zone. This means they recognize the area was built and intended for visitors. Thus, properties are eligible for short-term rental licenses with no cap and no cap on nights.
For more information on Keystone Short-Term Rentals visit: https://www.summitcountyco.gov/1221/Short-Term-Rentals
Copper Mountain falls into the same regulations as Keystone.
Although Copper Mountain technically falls under the jurisdiction of Unincorporated Summit County, the county has recognized Copper Mountain as a Resort Overlay Zone. This means they recognize the area was built and intended for visitors. Thus, properties are eligible for short-term rental licenses with no cap and no cap on nights.
For more information on Keystone Short-Term Rentals visit: https://www.summitcountyco.gov/1221/Short-Term-Rentals
On December 19th, 2021 Summit County passed new rental regulations which capped the number of nights for most properties. Those rules can be found here. These rules seemed like a very reasonable approach to STR's but unfortunately the county officials quickly decided not to give them a chance to play out.
On May 24th, 2022 the county placed a moratorium on new licenses until February 24th, 2023. No new licenses will be issued during this time frame. The moratorium does not apply to properties in a Resort Overlay Zone including Copper Mountain and Keystone. The county is expected to pass new stricter rules prior or subsequent to the expiration of the moratorium. These rules will probably include caps on the number of licenses.
For more information on Unincorporated Summit County Short-Term Rentals visit: https://www.summitcountyco.gov/1253/STR-Regulations
*Information is subject to change and should not be relied upon. Please consult the appropriate jurisdiction before making any real estate or financial decisions. A directory to each jurisdiction can be found here.
From our friends at Fairview Lending. All opinions are that of the author.
The towns of Frisco and Silverthorne will be the next to crack down on short-term rentals. Here's an update from the Summit Association of Realtors Executive Director about what to expect.
The Town of Silverthorne will host 3 Open Houses on Monday, Sept. 12 to get feedback from the Public on a proposal to cap STR's at 10% in most neighborhoods around Town. The other areas in the Town Core and along the river will be capped at 50%. This proposal will allow 400 additional STR permits.
Please plan to attend an Open House on Monday to give your input! There is also a short survey you can take.
Short-Term Rental Open House
Share your thoughts on short-term rentals in Silverthorne by attending an Open House on Monday, Sept. 12 at the Silverthorne Pavilion. Town staff will be on hand to discuss the concept of capping the number of short-term rentals in Silverthorne from:
Light refreshments will be available at all open house times.
The Town of Frisco will have an update on an ordinance to cap short-term rentals at 22%. The staff recommends the ordinance change from a 22% cap to 25% due to a Court of Appeals ruling in New Orleans. The Town previously wanted an exempt status for local homeowners to be able to rent out their properties when they go on vacation. The Court of Appeals in New Orleans struck down a similar ordinance in August. Staff also suggests that Tuesday night's first reading and vote on the ordinance be tabled. The Town currently has 20% STR's.
The Town has made it clear they would like to hear from all affected communities. Please plan to attend the Council Meeting on Tuesday, Sept. 13, at 7:00 pm.
SAR will issue a formal Call for Action on Monday, but we want you to put the date and time on your calendar and plan to attend!
Attached are the staff memo and the Court of Appeals ruling. Below is an article to the New Orleans ruling:
In June 2022 the Summit County MLS had 483 new real estate listings. If you've been subscribed to my real estate listing alerts, it may have seemed like everything is on sale. However, that's only because we were bouncing back from a near record low number of listings and we're finally seeing a slow down in demand. But in reality, June is always the busiest month for new listings in Summit County.
There has not been this many available mountain properties for sale since August of 2020. But the June numbers of 1,110 Active Listings is still relatively low compared to our pre-covid inventory numbers. As I mentioned above, June is always the highest number of new listings so even if demand just stays flat, expect active listing numbers to trend back downward.
Months Supply of Inventory is calculated by determining the number of homes sold per month and dividing by the total number of properties for sale on the last day of the month. Much like above, we're headed back towards a more normal level of supply but Summit County is still historically low.
June 2022 price per square foot is up 19.2% from June 2021 but we are seeing a slight decrease from the April 2022. If I had a crystal ball, I think the April high would be the record for around the next year. We should get back to a place where negotiations can occur between buyers and seller. However, I am not predicting a long-term large price drop.
According to the Pulsenomics 2021 Q3 Home Price Survey. Prices are expected to continue to appreciate until 2025. With most of the appreciation having already occurred, and modest appreciation to follow. If you're looking to purchase, this means waiting will cost you, not just with home price but also with interest rates continuing to rise until Summer 2023.
We're getting back to a more normal market but that doesn't mean we're in a crash. Properties are going to take longer to sell but in the long-term there are still record high prices to be seen in Summit County. If you're ready to buy now, I think you're in a great place to negotiate below list price and look back at yourself like a winner. All that being said, we are in unique times with the treasury raising interest rate while entering a recession (normally it's opposite). I would not recommend overextending yourself for a second-home right now but if something is comfortably in your budget, go for it!
ColoradoHardMoney.com by Fairview Commercial Lending recently named Mountain Resort Communities one of the top real estate investments. A central theme is the amount of cash buyers seeking a hedge for inflation. Summit County's large percentage of cash buyers make our market less sensitive to interest rate hikes.
": Although, the price points in the various resort communities for single family are very high they will not be impacted the same as Denver. In many ski towns 60-75% of the homes are bought in cash so these buyers are not directly rate sensitive. Furthermore, there will be a desire to buy into the various ski towns as a hedge against inflation as other assets lose substantial value (Stocks and Bonds have both lost value this year). Furthermore, build costs will make it prohibitive to materially increase supply."
Take a look at their full blog post here for information on what they see as the best and worst real estate investments in Colorado.