Rumor has it, that a secret Archuleta County task force, which has been meeting behind closed doors since September, will hold another meeting tomorrow, Wednesday, January 11.
That’s the rumor.
The secret task force was assembled by County Manager Derek Woodman to recommend new policies to the Board of County Commissioners regarding the regulation of Short Term Rentals (STRs, vacation rentals) located outside the town limits in the unincorporated county. The BOCC directed Mr. Woodman to assemble the task force back in August, and to include representatives of various community segments. I served on the task force for about one month, representing the Pagosa Area Water and Sanitation District (PAWSD) of which I am currently a board member, but the PAWSD board pulled me off the committee due to the secretive nature of the group’s deliberations.
The BOCC has a temporary moratorium in place, preventing any new STRs from applying for the permit required to operate within the unincorporated county. The moratorium expires on March 1, and rumor has it that the secret task force will present some suggested policy changes to the BOCC at some point prior to March 1.
No one knows exactly how many STRs are located in the County, or how many are operating without the required permits. As of yesterday, the website AirDNA estimates that about 1,120 STRs are presently operating in the 81147 zip code, earning an average of about $3,000 per month. Most of the Archuleta County homes that have been converted into STRs are two-bedroom (33%) or three-bedroom (30%) with about 20% being one-bedroom.
But those numbers don’t necessarily match the estimates coming from the Archuleta County Planning Department. The software used by the County Planning Department has identified about 1,473 advertisements for rentals — both Short Term and Long Term — and about 1,402 are for STRs. But it would appear that some STRs are running multiple ads. The County estimates that about 1,334 dwellings are being rented Short Term, and 706 of those STRs (53%) have active permits.
Tracking and permitting is tricky, because some STR owners appear to be ‘gaming’ the regulations, which makes it difficult for the Planning Department to put its finger on the exact number of STRs in operation at any given moment. Property managers and homeowners pull their ads to adjust their price point, occupancy, etc, then make ads active again… or only run their ad for a short period of time to secure bookings, then pull them down…
According to the Planning Department, the County recently switched software companies and is working through some bugs in the tracking and permitting system:
We are working with the new software company to prepare letters and begin the process of mailing letters to all of the 100 or so unpermitted properties. We will also be taking all of these properties through to final permitting, or all the penalty steps. We will also be sending new letters to all newly identified properties on an at least monthly basis. Yes, it is accurate that we did not do this last year due to frequent turnover in the Code Enforcement Office…
…We are working through imperfections with the transition, but on a good path. System is available to all for renewal now and the link is live on our Vacation Rental web page.
One issue that has not been solved, and might never be solved, is determining what the impact of this relatively new industry has had on the availability and price of for-sale and for-rent property in Archuleta County.
We know that, during the growth of the local STR industry, the average price of a typical home in Pagosa Lakes has tripled, and the monthly rent for a typical residential home has more than doubled.
We’re not clear exactly how much of the change can be attributed to STR investors buying up houses and converting them to commercial uses, and how much is the result of other factors. We have a recent estimate of the impacts, however.
A 2022 report by Root Policy Research, conducted for the Town of Pagosa Springs, determined that the negative impacts of the STR industry on housing located within the town limits amounts to about $2,700 per STR per year. You can download that report here. The impacts were also calculated as amounting to about $1,100 per bedroom, per year.
What I hope to get across, in this editorial series, is that the citizen-approved ‘Workforce Housing Fee’ was actually well-thought-out, and fair.
That it had some honest appeal, in other words.
In Part One, I discussed the voter-approved ‘Workforce Housing Fee’ that was declared invalid by District Court judge Jeffrey Wilson on January 2. That Town-only fee had amounted to $1,800 annually for a one-bedroom STR; $3,600 annually for a two bedroom STR; and $5,400 annually for a three-bedroom STR.
The Town government has the option of appealing Judge Wilson’s ruling, but has yet to give any indication that an appeal might be in the works.
Our citizen group wrote Ballot Question A to require the ‘Workforce Housing Fee’ to be used for — what else? — workforce housing. We estimated the annual revenue to be in the $500,000-to-$600,000 range, depending upon how many STRs continued to operate within the town. We hoped that some STR owners would decide to switch to long-term renting, as a result of the new fee — which does not apply to Long Term Rentals.
Additionally, we specified that the revenues must be directed at housing that serves working households that earn less than the ‘average’ income for Archuleta County. Looking at the 2021 survey conducted by Pagosa Housing Partners, it was clear that the households suffering most, financially, from our housing crisis were in the ‘less than average’ income bracket. You can review those survey results here.
With the Root Policy study in hand, the Town Council now has reasonable data to justify a $1,100-per-bedroom fee, with some assurance that the fee would not be invalidated by a District Court judge.
Additionally, the Council knows that such a fee will likely appeal to a majority of the town voters.
If the Council heads in that direction, they might want to follow the citizens’ example and direct all of the revenue generated toward workforce housing for households earning less than the Area Median Income. The town’s voters had found that allocation appealing.