By Lynn R. Frederick
The Archuleta County Democratic Party endorsed a proposal to the state Democratic Party platform to change the way short-term rentals (STR) are taxed at their county assembly on March 5, 2022.
The proposal reads:
Revise Colorado Statues to permit local governments to tax houses in residential zones as businesses when they are used as short-term rentals unless also occupied by the owner.
As it stands now, local governments are not permitted to change the tax designation of short-term rentals located in residential zones. This means that even if houses are owned by corporations or by individuals who are buying up houses to solely use for investment properties, they get the same tax break that individual home owners do. Residential properties are taxed at 7.15% of appraised value. Businesses are taxed at 29% of appraised value. This means that, even though hotels are providing the same service as STRs, they cannot compete fairly.
The proliferation of STR causes many other problems that we are all aware of such as turning stable neighborhoods in transient neighborhoods, pricing middle class families out of the housing market, providing food for wildlife because renters don’t know or care about the rules for putting out trash. While some of the more egregious practices are becoming under better control such as the renting out houses for large parties, remediation takes time and education.
This proposal will also provide some consistency in fees and taxes for responsible STR owners since they will know in advance what the costs of running the business will be, and they can decide whether it will pay enough for the investment they are making.
There are some things that this proposal will not do. It will not prevent individual home owner associations (HOA) from prohibiting STRs. It will not stop you from renting out a bedroom in your house while you are living there to help with your own living expenses. It certainly won’t stop you from providing room and board to a personal care giver should you ever need one.
Many of us would prefer to have STR banned entirely. Until this happens, this proposal will help mitigate some of the effects of STR. We hope that the extra revenue this proposal would provide could be used for affordable housing.
We know that some STR owners plan to retire here in the future and buy property now as a hedge against inflation. If you can afford two houses, you still can do that. If you need some help in paying your mortgage, you can rent the house out to long term renters.
The local Democratic Party hopes that this change in taxation will be supported by both unaffiliated voters and Republicans. We all are looking for ways to make our county more livable for everyone.
Lynn R. Frederick serves as Secretary for the Archuleta County Democratic Party.