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New short term rental rules spark debate

City Council votes on short term rental ordinances
Posted at 10:32 PM, Dec 06, 2019

COLORADO SPRINGS — Big decisions were made by the Colorado Springs City Council this week about the future of short term rentals.

News 5 spoke with Councilmember Don Knight, who said they focused on two main issues. The first was occupancy, which is how many people can stay in a home. The new rule is two per bedroom, plus two more people. The second was density, which involves how many rentals can fit into a certain area. The restrictions will only apply to those homes where owners do not live there for more than half of the year, and new properties like that will no longer be allowed. The already existing ones will be grandfathered in, as long as they keep their permits active.

Short term rentals can be found on websites like Airbnb or VRBO. Ryan Spradlin, the founder of the Colorado Springs Short Term Rental Alliance, said the new rules make it close to impossible for new listings to come online. "To a large degree, the city just stripped single family residential homeowners of the opportunity of renting a house on a short term basis, should they change their living situation or buy a second house," said Spradlin.

The new restrictions will only apply to homes where the owner does not live there for more than half the year. Councilmember Knight said any new rentals of that kind, called non-owner occupied rentals, will not be allowed. He said that rule is for areas like neighborhoods, where it's only single family homes. "If you don't actually live in that house, it's a second home, it's an investment, it is a business. And city code does not allow businesses inside residential districts," said Councilmember Knight.

However, if non-owner occupied rentals are in different areas, like apartments, then the rentals must be at least 500 feet away from each other. "I think it's to control the number of permits in the city, and that's I guess maybe where our biggest conflict was. Over the past year, the number of active listings has declined, even in the last month it declined by more than 5%," said Spradlin.

Spradlin said the rules will hurt the local economy, especially small businesses. "People who stay in short term rentals spend more at local businesses than people who stay in hotels because they've saved money on their accommodation, and so they spend it out in the city... There's a lot of businesses in town that are set up around this. There's cleaning businesses, there's property management businesses, there's contracting businesses, there's all sorts of businesses who work specifically in this market and it will definitely hurt them," said Spradlin.

Knight said the markets for those businesses already existed prior to short term rentals, and he does not believe it will impact tourism. He said it could actually help neighborhoods. "When you've got a short term rental right next door to you, every day is out of the ordinary, so it totally goes against everything we teach in neighborhood watch," said Councilmember Knight.

The occupancy issue was passed, and is heading to the mayor to be signed. As for the density rules, the second reading for those will be on December 19 at 2 p.m. The density rules were approved in a 5-4 vote on December 5. If their vote holds, both issues should be effective before the end of the year.