Read the first part
Following Mona Cayard’s testimony on Tuesday morning prior to the Archuleta Board of County Commissioners (BOCC) working session cited yesterday in Part Five, another motel manager stepped forward to share a similar perspective on the dangers posed to our community by the uncontrolled The holiday apartments grow.
Tom Inman, General Manager of the popular Springs Resort, thanked the two Commissioners present – Warren Brown and Ronnie Maez – for inviting them to speak publicly on the controversial issue.
Springs Resort, Pagosa Springs.
Mr. Inman said he represents “corporate groups and the hospitality industry”.
“As a group of companies, we are not against short-term vacation rentals. The challenge is to strike a balance with the impact of short term rentals on our community. And I’m sure that’s what everyone is trying to find out right now.
“This balancing act is certainly a topic in [residential] Neighborhoods and the Negative Impact of Short Term Rent on Neighborhoods. There is certainly a need for balance when it comes to tax laws. “
With regard to tax laws, vacation rentals and motels, and bed and breakfasts, all guests must collect and transfer the “Lodgers Tax” from their guests – a tax that reduces the customer’s bill by 4.9% within city limits and without its own in the county Legal personality increased by 1.9%. (Whether the numerous “unregistered” vacation rentals in Archuleta County actually transfer these taxes is currently an open question.)
A slightly bigger tax problem makes itself ugly when we talk about property taxes.
I own an older home in downtown Pagosa and have the right to allow friends and relatives, or even strangers, to stay in my home. However, if I convert my home to a “bed and breakfast” and start billing people for the stay, my property will be converted from residential to commercial – under Colorado law – and my property tax rate will change from $ 7 , 15% to 29%.
These prices are set by the state of Colorado.
But the state of Colorado offers a huge void for vacation rentals. If I rent out all or part of my house but don’t serve breakfast, the state regards my house as a “short-term rent” and continues to tax it at the residential tax rate: 7.3%
What a difference does breakfast make!
Of course, the Springs Resort is a motel and as such pays the 29% business tax rate. Motels are obviously commercial establishments. Obviously, if you ask me, vacation rentals are commercial too, but the state of Colorado hasn’t realized that yet.
Mr. Inman continued his testimony:
“It is clear that there is a need in the community for a stronger balance when it comes to long term housing and affordability for service workers, hospital staff and teachers – I think you have all heard the stories.
“In 2019, the Economic Policy Institute, a nonprofit, impartial American think tank, found that the economic costs of short-term rentals outweigh the benefits.
“In summary, it can be said that short-term rents continue to exceed long-term rental supply, which leads to an increase in long-term rents …”
From this 2019 study:
Since the demand for housing is relatively inelastic (people’s demand for housing doesn’t decrease when prices go up), even small changes in housing supply (such as those caused by converting long-term rentals to Airbnb units) can result in significant price increases. High-quality studies show that, for example, the introduction and expansion of Airbnb in New York City could have increased the average rents for city dwellers by nearly $ 400 a year.
The rising cost of housing is a major problem for American families. Housing costs have risen significantly faster than total prices since 2000 … and housing makes up a significant portion … of total household consumption.
We don’t have solid, high-quality data for Archuleta County, but anecdotally, rents in our community have skyrocketed in recent years. These increases would certainly be expected due to “supply and demand” if – as Mona Cayard, owner of the High Country Lodge, the BOCC announced on Tuesday – the number of holiday homes operating in Archuleta County rose from 620 in 2017 to 1,119 ‘ in the last quarter of 2020.
Mr. Inman continued:
“In addition, short-term rents are low [positive] economic impact on our community. In terms of impact, it is often overstated as it fails to take into account the fact that travelers who stay now on short term rentals would have stayed in hotels and motels before, so the overall growth is nowhere near as significant.
“Short-term rentals have a negative effect on the neighborhoods. It is a residential commercial use. Commercial zoning, on the other hand, avoids many of these negative effects.
“The county is proposing increased permit fees and we believe this is a start. In the end, however, it doesn’t achieve the balance we all want. One thing that corporate groups would like to see in my opinion is the formulation of an upper limit on the number of short-term rents in the community. This wording could be based on the availability of [rental] Housing, in a mathematical percentage of how many short term rentals are in the market.
“We also believe that affordable housing is currently a crisis in Pagosa. I want to mention that many sub-tenants are actually moving staff or building apartments at this point. We would like an income tax of 2.5% on short-term rents. These taxes would be paid by the people who come here and enjoy these properties. And this tax could in turn be provided for affordable housing … “
An affordable housing tax of 2.5%? That seems pretty shy. Why not dream big?
I believe the city of Oakland, California is considering a 14% “temporary occupancy tax.” That sounds closer to the correct number.
I suspect the majority of Archuleta County’s voters would be happy to approve a 14% TOT tax on vacation rentals … but even that amount would hardly affect our current (and deepening) housing crisis.
Bill Hudson
Bill Hudson founded the Pagosa Daily Post in 2004 on the belief that community leaders often only tell one side of the story … while the public deserves to hear all of them.