Read part one
“I think you have to be in possession for two years before you can get yours [vacation rental] License is a good idea. I think that will cool the speculative market … “
We hear here from Councilor Nicole Pitcher who works in a real estate agency and has some personal experience with our hot and speculative housing market in Pagosa Springs. Ms. Pitcher and her husband Chris – who works on the town planning committee – own rental property and are currently building a house that they want to use as a vacation home.
It responds, in part, to a series of statements we have just heard from Councilor Shari Pierce. Ms. Pierce explained why she could not support any of the planning commission’s recommendations. Councilor Pitcher felt different.
Mrs. Krug:
“I agree that by just laying something [vacation rental] Regulations in place, it’s not like anything [the vacation rentals] will be converted to “long-term rentals”. But I’ll say I’ve seen bidding wars where people from the neighborhood who work in our community have been pitted against investors [from out of town]. “
Ms. Pitcher claimed that with stricter regulations, at least some of the available apartments will become long-term rent.
“So it’s not our ‘answer’ to workers’ housing, but I think there will be some owners who will leave. ‘Okay, well, I was able to make that margin earlier … But I still have no intention of living in Pagosa … so I’ll take this margin instead … “And it will be long-term. So I think the introduction of these restrictions contains an element that will increase our long-term housing stock.
“But it is not our ‘answer’ to manpower accommodation.”
Downtown Pagosa Springs, August 2021.
Ms. Pitcher then discussed the planning commission’s proposal to increase the approval fees for vacation rentals by “at least a factor of 12” if the landlord does not live on the same property. Currently, all vacation rentals within the city limits pay the same annual fee of $ 500 per year. But many Colorado communities have made a distinction between an owner who lives full time at the address where the vacation rental is operated – and thus runs a “home business” – and an owner who lives elsewhere and has therefore converted a former residential property to convert it into a purely commercial business. Increasing the vacation rental permit fee by a factor of 12 would increase the fee to US $ 6,000 per year.
Councilor Pitcher:
“Speaking of fairness between commercial and non-commercial real estate: I pay a property tax of 29% for my commercial rental, compared to 7% property tax for residential properties. We are not responsible for that. “
Right. Property tax rates are set by the Colorado Constitution and state laws.
“Some people wonder how we can make this more fair with fee structures. And I think we come up with constitutionally questionable reasons. I think we’re talking about introducing a tax without going to the electorate. I think the way to do this is to impose an excise tax on short term rentals.
“$ 6,000 is not a ‘fee’. We cannot tell how much it will cost to manage the program. I think we have to go to the voters and ask, ‘Do you want an excise tax on short term rentals?’
“And I agree with Councilor Pierce on the same idea. When [the Lodgers Tax] was originally chosen, the idea was to promote tourism. So we are talking about fundamentally changing this. And I want to say that this is probably one of the biggest talking points that I get from the voters. People don’t want to be a tourist community anymore, and I don’t think we can just turn that on and off. But if we no longer want this to be our mission, then I think we have to change something [the Lodgers Tax] was originally chartered.
“So I think both should go to the vote. Are we ready to abolish lodgers tax and external marketing funding? And do we want to impose a consumption tax on short-term rents? …
“I think protecting our neighborhoods from deteriorating is important. I think I would support that by introducing density restrictions. “
Ms. Pitcher also advocated changes to the current Accessory Dwelling Unit (ADU) regulations. Several new ADUs have been built since the city began waiving ADU development fees, but most of the new housing units have simply become vacation rentals. As Ms. Pitcher pointed out, this was never the intention when the city council agreed to waive development fees for ADUs. The intention was to encourage long-term rentals.
Councilor Maddie Bergon agreed that ADU fee waivers should only be allowed if the units are occupied by full-time residents.
We heard from other council members who shared different perspectives, and then Mayor Don Volger spoke up.
“We should make a decision tonight. One of the things that I keep hearing or heard more than once is that we have to stop kicking the can down the street. Time to make a decision? I think we are past the crisis point in many ways. And people need information. If they want to invest in short term rents or invest in other ways, they need to be certain of what is going to happen, sooner rather than later. “
But as far as I could tell, no decision was made that night.
Our mayor must mean well when he speaks of giving timely assurances to people who want to ‘invest’ in Pagosa Springs. At first glance, there is nothing wrong with this feeling.
But we are in a situation in which the people who already live here and have invested their lives in Pagosa Springs for 10, 20, 30 years are quickly challenged by the community.
The factors that cause our local businesses to suffer from a shortage of loyal employees and our local workers and families to suffer from a lack of available housing are many and complex and the city council will not be able to deal with that deal with most of them.
But the same city council had unanimously voted at the same meeting on August 3rd to approve an estimated $ 15.6 million for new pickleball courts and new baseball fields in the planned Yamaguchi South sports park …
Voting on the allocation of funds to help our troubled businesses and working families … it seems much more difficult.
Read part four tomorrow …
Bill Hudson
Bill Hudson began sharing his opinion on the Pagosa Daily Post in 2004 and cannot break that habit. He claims that Pagosa Springs opinions are like pickup trucks: everyone has one.