Imagine that you’re part of a large audience at the May 3, 2018, meeting of the Archuleta Board of County Commissioners, held at the County Fairgrounds to accommodate the public attendance. The three commissioners — Ronnie Maez, Michael Whiting and Steve Wadley — are apparently going to approve some changes to the County Land Use Regulations (LURs), related to vacation rentals. Short-term Rentals. STRs. At this point, in the spring of 2018, STRs in Archuleta County are basically unregulated and required no special permit to operate.
The audience is riled up, and divided in its opinions.
Commissioner Michael Whiting states that he did not want to get into a debate of “locals versus visitors” about STRs. But that was exactly what the public wanted to debate.
John Shepard, the Archuleta County Planner, explains his staff had been working on the proposed changes since they were instructed to do so by the BOCC. The ideas for the changes, Shepard explains, had come from looking at other counties in which STRs had been “somewhat successfully dealt with”, such as Ouray County.
The main change in the Land Use Regulations would be to define an STR as a ‘use by right’ for a single-family home.
The BOCC listens to the public on both sides of the issue. One of the objectors is former County Commissioner Bob Moomaw, who addresses the idea of ‘zoning’.
“The original idea of doing zoning, and I was on a city council back in the ’70s when we first wrote these things, was to separate business and residential… And, clearly, these short-term rentals are businesses…
“One of the jobs of government is to do the best for the majority… Yes, tourism is a major part of this community, but the larger part is that this is a community…
“We’re creating a special group who runs a business that does not pay commercial real estate taxes…”
The BOCC directs staff to make some minor changes to the proposed LUR amendments, and bring the issue back at the May 15 meeting.
At the May 15 meeting, the BOCC tables the decision to their June 19 meeting. At the June 19 meeting, the BOCC tables the decision to their July 3 meeting.
At the July 3 meeting, some new regulations are finally approved. STRs are defined as a “residential use”, but they now require a permit, and must pay an annual permit fees. They will be inspected by the County, to ensure they meet the new requirements, such as parking spaces and number of bedrooms. Other, minor requirements are included.
The public comments from people in the industry — the STR industry — and their friends in the real estate industry, indicate unhappiness with the strict new requirements.
The public comments from ordinary residents, who live in neighborhoods getting overrun by STRs, indicate unhappiness with the lenient new requirements.
That was 2018.
In the four years since, the BOCC has seen its sales tax revenues increase by 75%.
Over the same four years, the price of a typical home in Pagosa Lakes has increased from $309,000 to $450,000.
The monthly rents on long-term rentals have followed the same upward spiral as home prices.
Extraordinary changes.
Has our worsening housing crisis been caused, partly, by the STR industry? No doubt. But no one yet has presented a credible analysis, accurately quantifying the true effect caused by the STR industry on Pagosa home prices and rents. Earlier this year, the Pagosa Springs Town Council contracted with Denver-based Root Policy Research to develop just such an analysis. That report will presumably give the Town and County governments some evidence-based data to consider, as they make further updates to their land use codes.
A couple of things are worth noting, the meantime. As former Commissioner Bob Moomaw noted in 2018, the BOCC was creating a special class of commercial businesses — ‘vacation rentals’ — that do not pay commercial property taxes. Four years later, STRs still do not pay commercial property tax rates; they pay the current residential rate: 6.77%. All other commercial businesses next year will pay a rate of 27.9%.
This is a massive tax loophole for a ‘special group’.
The rest of us are, of course, impacted by rising real estate values. A friend of mine reminded me of this effect last week.
My friend lives next door to a small one-bedroom house — 800 square feet — that was probably worth about $200,000 a few years ago, when it served as the home for a full-time resident — a local worker. Last year, it was bought up by a vacation rental investor for $345,000.
“You know what that means?” my friend asked rhetorically. “That’s going to drive up the property taxes for this entire (rural) neighborhood. People who claim the STR industry is ‘good’ for Pagosa Springs are not thinking about what it’s doing to our property taxes.”
My friend won’t see that increase in 2023, because the Archuleta County Assessor performs a community-wide re-evaluation of home and business values only every two years. So we will see the increased property taxes in 2024… and we will see that increase, even if the country is in the midst of a recession… even if we see a resulting drop in real estate prices…
…because the community-wide re-evaluation will be based on the (increased) price of properties during 2021 and 2022.
Our Daily Post readers might want to stash away some extra savings, in preparation for their 2024 tax bill.
Finding any extra money to stash away will be more challenging in 2023, however, if the Archuleta BOCC can convince the voters that a $6.5 million sales tax increase is a good idea. As I’ve mentioned before, there are 6,500 households in Archuleta County. Divide $6.5 million by 6,500 and you get the figure “$1,000 per household”.
The commissioners, meanwhile, are doing their level best to convince us to give them more money.
Tomorrow, Tuesday October 4, at their regular 1:30pm meeting, the three commissioners will considera new resolution, aimed at helping to “educate and enlighten” the voters about Ballot Measure 1A.
It reads in part:
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF ARCHULETA COUNTY, COLORADO THAT:
1) The Archuleta County Board of County Commissioners is fully in support of the ballot measure to increase the County sales tax by 1.5% and desire to educate and enlighten the citizens of Archuleta County of the need to vote for a 1.5% sales tax increase in the November 8, 2022 election and the benefits the citizens of Archuleta County will receive from the additional revenue.
2) The Board is in support of a summary of reasons why the sales tax increase will benefit the citizens of Archuleta County, which is attached hereto as Exhibit A.
The resolution’s Exhibit A does mention the figure “$6.525 million” … but it does not mention the figure “$1,000 per household”.