The proliferation of nightly rental properties in Salida

I have been thinking a lot about the recent proliferation of nightly rentals in Salida. (For full disclosure, my family owned a nightly rental about 10 years ago for a brief period of time. Also, my husband and I build homes in Salida and make our living from selling houses. There. That is all I need to say about me. )

I think that a few nightly rentals can be good for a community, because they increase the options available to people who want to come visit our town. I also think that when they are numerous, they are detrimental to a community for the following reasons:

  1. People like to know their neighbors. It increases a sense of community, and also a sense of security. You can build relationships with your neighbors in a small town, but not if they are only your neighbor for a few weeks.

  2. Nightly rentals remove housing from the housing stock that is available for long term members of our community. It is no secret that it is difficult to find an available rental, much less one that is "affordable" for a working family. If you like having teachers and police officers and waiters and children who live in town to make your life better, then you need to know that it is very hard for these people to live here, and it is getting more difficult by the minute.

  3. I think that the growth of nightly rentals is one of many factors that are driving up the cost of living in Salida. People will pay more to purchase a home if they can rent it out over the summer at $200 a night (that's $20,000 in income for the 100 nights of summer - that will cover a mortgage for a year for a $350,000 home before expenses). I have heard of people who want to spend two weeks a year here and buy a home and rent it for 50 weeks a year. It would be awesome if they would rent an existing nightly rental instead and keep that other house on the market for rentals.

I know that this will come across as Big Brotherish, and I guess it is. I believe people have the right to use their private property for profit if they choose. I also believe that the City could try a few things to make the nightly rental business slightly less desirable and maybe convince some people to turn their nightly rentals back into housing that people who live here can actually access. Or, failing that, tax the tourists to generate some income for creating some affordable housing here in Salida.

Here are a few ideas:

  1. Tax vacation rental property as commercial property. In Colorado, property taxes for residential property is very low compared to other places. Commercial property tax is what pays a lot of the bills in Colorado. I think that if a property is rented out 100 nights a year (pick a number, 100 is a starting point) and the owner is making $20,000 (this is conservative: most properties rent for more than $200 per night) then this property is a commercial enterprise and should be taxed accordingly. A commercial property pays 3.6 times the property tax of a residential property (I verified this with someone at our local Assessor's office). Boulder is considering some legislation in this area. Follow this link if you want to learn more about this: http://www.dailycamera.com/news/boulder/ci_28240692/boulder-short-term-rental-owners-plea-flexibility. You will find many more stories in Boulder if you do a quick google search.

  2. Add a $20 surcharge per night for every night of rental in a nightly rental. Yes, I think it is okay to tax the tourists. We collect a tax for lodging for hotels and nightly rentals owners are also required to pay this tax. But if we take this $20 per night and funnel it into a fund for affordable housing, we would have a fund that might actually be able to make a difference. Let's just assume that there are 40 nightly rentals in Salida town limits (a quick look at VRBO showed there are at least this many) and they are full for 4 days at FibARK. This would be 3 nights times 40 rentals times $20 which would yield $2400 in just a weekend. I believe this would add up quickly enough to be meaningful.

  3. License nightly rentals and put a cap on how many are allowed in the City or in a given geographical area. I would certainly grandfather in the rentals that are currently in operation, but I think that it would be fair to not allow any more, especially in areas that have a high concentration. I have heard that the city of Santa Fe disallowed all existing nightly rentals, which I believe is a pretty big violation of property rights. But if going forward homebuyers know that they cannot rent their new purchase on a nightly basis, you have not taken anything away from them.

  4. When new subdivisions are created, have a "no nightly rental" requirement in the HOA. This would ensure that new housing in new neighborhoods will not be added to the nightly rental stock but will be added to the housing stock for those who live and work in our community.

I know this is a controversial topic and there are a lot of factors to consider. I hope that those of you who read this will jump into the conversation in a constructive and friendly sort of way. I would love to hear from those of you who have seen your neighborhoods transformed into rentals and hear how that changes your experience of living in a small town. I would also love to hear from those people who own nightly rentals and hear your side of the story. And I would really love to hear from some of our City Council candidates. I think the issues of affordable housing and nightly rentals are intertwined and should be considered together.

One site that is used to advertise nightly rentals is vrbo.com. Take a look at it and see how many houses you recognize. Some of these are full time rentals, some are part time and it is impossible to know which are which from the website. But the fact that a search of Salida on just this one website brings up 87 rentals means that it is past time for a public discussion about how the proliferation of nightly rentals is affecting our community.

Thanks for reading, and have a wonderful day.

Paige Judd

Comments

    There may be other comments on this topic on our Facebook page.

  • ...There is a vibrant discussion on this topic on The Salida Citizen Facebook page:

  • Paige, Thank you for your comments and suggestions. This is a important topic that needs to be addressed soon. I agree with your statement that the proliferation of vacation rentals in Salida is one of the reasons for the increase in real estate and cost of living in this area. We want to have the housing for workers and future employees who need and want to live here. I think your suggestions in how the City can begin to balance this situation is a good start. PJ Bergin

  • People aren't allowed unlimited use of their private property if it is in an incorporated municipality. Using one's private dwelling for a vacation rental business is simply that; business, and as such can and will be regulated by the city if it so chooses. It's not a matter of 'private' property at all; cities regulate the number of taverns, drug stores, gas stations, etc.; so there should be no problem with limiting the number of vacation rentals in town. It's all legal, folks, and is done in towns across America.

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