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Photo by Visit Colorado Like many of the mountain towns in Colorado, Crested Butte was known for its mining workers and the town initially made its mark by being a supply town for hard rock mining.
Editor’s note: Highlands is not the only town struggling with an influx of people due to COVID-19, lack of affordable housing and a short-term rental situation on its hands.
Resort towns across the United States are scrambling to find ways to house employees and appease both sides of the aisle when it comes to short-term rentals.
In “Short-Term Rentals Causing ‘Peak’ Problems”, The Highlander is taking an in-depth look at different resort mountain towns to see how different local governments across the nation are dealing with these issues.
This is the third in the series.
The “Gateway to the Elk Mountains,” or the Town of Crested Butte, Colorado, sits at an elevation of 8,885 and has a population of close to 1,400.
Like many of the mountain towns in Colorado, Crested Butte was known for its mining workers and the town initially made its mark by being a supply town for hard rock mining.
Cracking down early
Noticing the influx of short-term rentals, the Crested Butte Town Council acted quickly back in Sept. 2017. The town approved to put a cap on STRs at 30 percent of all homes in the town, as well as put a 12 month suspension on all vacation rental permits.
Crested Butte Mayor Ian Billick said one of the main concerns with short-term rentals is that they jump around property tax, as well as zoning.
“Property tax is a state by state issue, but here, they are taxed as residential and not commercial,” Billick said. “That is a pretty big deal in terms of the tax burden they carry. The big question is if they are allowed in residential areas because they bring commercial activity into residential areas.”
When the council began considering a moratorium on issuing any more STR business licenses, homeowners rushed in and increased the percentages to 38 percent in the historic core and 21 percent in the newer residential areas. The committee had voted 4-1 to try to get the percentages back down to pre-summer numbers.
Doing that would essentially mean not issuing any more such business licenses until the number of active licenses was reduced, and not allowing the STR licenses to automatically transfer with the sale of a house in town. As expected, that was the most controversial element.
Along with the cap and moratorium, the town council increased the fees for STRs. The council basically agreed to higher fees for STR business licenses to help offset costs of hiring an employee to oversee the businesses and, for instance, inspect the properties. Those fees could be adjusted annually by the council.
With a cap, an ongoing moratorium and an excise tax, Billick said Crested Butte is trying to make sure they have a handle on STRs, but there has been push back.
“We definitely have firms that specialize in managing short term rentals, so some of the push back is that it harms their business,” Billick said. “There are also individuals who are buying homes and maybe they want to retire here, but they can’t necessarily cover the purchase price of the mortgage without having that second STR income to cover it.”
Being newly elected in Nov. 2021, Billick said he came into office with the thought process of STRs being a part of a bigger picture in the community.
“I think there are two things, one being how do we build community,” Billick said. “What do our communities look like? What do our neighborhoods look like? It’s a completely different community if you’re living here full time, but you’re surrounded by people who are on vacation and turning over every two or three nights. Second, obviously, is the housing. The reality is that our housing prices are escalating so high that even if we drove down some of the housing values it’s not like those houses are going to be affordable for our workforce. We’ve got lots that are selling for close to $3 million so even if we took away 90 percent of those lots, it’s still going to cost $300,000, plus construction cost at $450 per square foot, that’s eight or 900,000 and our workforce can’t afford that. There’s no obvious solution just by regulating short-term rentals that it’s going to turn the housing issue around.”
The workforce housing issue in Crested Butte
As is the issue across the nation, Billick said Crested Butte has had its fair share of workforce housing problems.
“Nationally, resort communities across the nation have had issues with keeping their workforce,” Billick said. “When you throw the two issues of short-term rentals and affordable housing together, it is pretty challenging.”
According to a report by Rocky Mountain PBS, the town took steps to a ballot measure for this November that would create a second-home tax. The wording isn’t final, but the idea behind it is to provide money to the town if a home is bought but is left empty for the majority of the year.
In July 2021, the town declared an emergency for the housing situation. Crested Butte Community Development Coordinator Troy Russ said the emergency declaration will allow the town to bypass some zoning and government bureaucracy because the town needs housing now.
“So, on June 7, when we did our analysis, we had 115 job openings, full and part-time openings listed in different sources, and we only had one unit for rent,” Russ told PBS.
Advice to Highlands Town Board of Commissioners
Billick said when it comes to short-term rentals and housing, it gets a little confusing.
“There is a relationship there, but I think the most important thing is, how do we build community,” Billick said. “I would look at the short-term rental issue through the lens of community. Not just on housing, but the community as a whole.”
- By Christopher Lugo