Commentary: What's the Future for Affordable Housing in Lyons?
By Amy Reinholds
The Lyons Planning and Community Development (PCDC) heard input on Monday evening from Lyons area homeowners who rent out rooms or their homes as short-term vacation rentals, few of them following current
regulations for their zoning or locations.
According to current Town of Lyons code, short-term (shorter than 30 days) vacation rentals in residential zoning districts in Lyons are not allowed unless homeowners have been approved as a bed and breakfast through a conditional use review. No homeowner in a residential R zone has applied for this conditional use since the code was created.
About twenty people attended the PCDC informal workshop on Monday, January 30, and several spoke about the built-in safeguards of renting their rooms through websites like AirBnb.com and VRBO.com. They also spoke about their interest in only renting out their rooms some of the time, instead of to full-time roommates. Most of the people who spoke said they rent out only one room or suite with a private bath and they are usually home.
Apart from a business owner of commercial property in Town of Lyons, and a Town of Lyons resident who lives in an Estate Residential (E) zone (where a bed and breakfast is allowed as a principal use for less than six units, with a business license), all other vacation rental hosts in the Town of Lyons who spoke are not following current Town of Lyons code when they rent out rooms or their houses for short-term vacation rentals.
A woman who spoke at the meeting who lives in rural Larimer County said there were no regulations for short-term vacation rentals in Larimer County. However, when I called the Larimer County Community Development department, I was told that short-term rentals of rooms, part of a house, or the entire house, are not allowed unless approved in the appropriate zoning district by special review as a “resort cabin or cottage.” A Town of Lyons homeowner who spoke said he had rented his home on VRBO.com in another Colorado town, but now in Lyons, his neighborhood homeowners association doesn’t allow short-term vacation rentals.
Several vacation rental hosts who spoke Monday said they have purchased required homeowners insurance coverage for short-term vacation rentals, but the rest might be at risk for uncovered costs of damage or maybe at risk for losing their homeowners insurance. Some of the hosts said they liked the idea of a checklist resource of what each guest host should do for safety.
PCDC Commissioners wanted to know if short-term vacation rentals on residential zones were made legal, what limits the homeowners would find reasonable – a safety registry, a flat occupancy fee per night that goes to the Town of Lyons, inspections, requirements of owner occupancy, requirements to provide an off-street parking space, and limits of number of rental nights in a calendar year.
So, why am I interested in writing about short-term vacation rentals in my affordable housing column?
Back in August 2016, the Board of Trustees directed the PCDC and Town of Lyons planning staff to draft a policy for short-term vacation rentals in Lyons. After reading a document presented by consulting Town Planner Bob Joseph, there was consensus from the Mayor and Trustees that there should be some limits on short-term vacation rentals on single-family home zoned residential lots.
The main reasons discussed for this direction was the shortage of year-round rentals for people who work in town, and the goal to keep Lyons residential neighbors as residential. Joseph’s document stated “Although not mutually exclusive, the goals of increased housing (especially rentals) and the possible goal of allowing short-term vacation rentals are at odds with each other. Short-term vacation rentals will consume available housing stock, and might act to drive up housing costs in the long run.”
A common argument that proponents of no restrictions to short-term vacation rentals give is that it helps people afford to buy homes in Lyons. But that approach applies to only people who can qualify to purchase the mostly $400,000 to $500,000 range of homes available in Lyons. Not everyone can afford to buy a house at that price, even if the Town of Lyons granted unlimited, no-cost ways to make money renting out rooms on AirBnB year round. How many local Lyons businesses pay enough for employees to be able to qualify to buy a $400,000 or $500,000 home ?
The PCDC sent a Town of Lyons email inviting the community to this week’s workshop, stating that the current regulation against short-term vacation rentals without a conditional use as a bed and breakfast “has not been enforced since code updates are needed.” The statement said the commission is interested in making recommendations to the Lyons Board of Trustees that would make short-term vacation rentals legal in residential zones while also providing some stipulations that would work to maintain the character of Lyons neighborhoods.
Before those decisions are made, the PCDC Commissioners said they want to hear from residents who have an opinion on the topic or experience with short-term vacation rentals.
PCDC Chair Gregg Oetting said at the workshop that under current code, if a homeowner in a residential areas doesn’t get a bed and breakfast license and neighbors complain, the Town of Lyons has responsibility to do something about it.
In general, from the ten to fifteen vacation rental hosts who spoke to the PCDC Commissioners at the workshop, safety registry and owner occupancy requirements were acceptable to most, and several expressed that a flat occupancy fee for lodging in Town of Lyons was also acceptable. State law says Colorado sales tax should be collected and paid for short-term vacation rentals.
In the future, if there is a local occupancy flat fee for vacation rentals and lodging in Lyons, AirBnB could collect and distribute that fee as well as the state taxes.
The PCDC Commissioners expressed interest in policies that might allow renting out just one room at a time, with an on-premise homeowner, and requiring the bed and breakfast conditional use application if more than one bedroom is rented out simultaneously. AirBnB hosts who spoke mentioned that they want quiet tenants and require quiet times and limited access hours because they live in the house while guests are there.
One thing that won’t change is that short-term vacation rentals are not allowed in accessory dwelling units (apartments in a house, garage, or outbuilding that are allowed to share utilities with the main house but are intended to encourage more long-term rentals for people who work in town).
PCDC Commissioner Neil Sullivan said there were concerns by the fire department that short-term vacation rentals are safe and public safety officials know where they are located. Discussion centered around minimum requirements like a smoke detector and a carbon monoxide detector.
One vacation rental host asked why only short-term vacation rentals would have regulations but not all rentals in town. I expressed agreement that these safety issues should be looked at for all rentals in Lyons. The PCDC did discuss this issue last summer and an overall rental policy is on the PCDC’s to-do list. See my past columns at lyonscoloradonews.wordpress.com/2016/07/28/planning-commission-supports-licensing-vacation-rentals-for-safety/ and lyonscoloradonews.wordpress.com/2016/08/05/trustees-direct-pcdc-and-staff-to-draft-short-term-vacation-rental-policy/.
The PCDC and Lyons planning staff Matt Manley and Bob Joseph compiled information from other communities about short-term vacation rentals, including those that charge a local community occupation fee, a flat fee per night, around $25 or $50 to cover administrative costs of running the registration program. I expressed support for a suggestion from one AirBnB host who spoke that maybe the community occupation fee could also support affordable housing, such as additional grants to encourage landlords in town to take Section 8 or Veteran’s housing vouchers for long-term rentals.
Some questions that I think the PCDC and the town planning staff should be asking the other municipalities is why they decided to create the short-term vacation rental policies for residential zones that they did, instead of requiringspecial use reviews to operate lodging businesses in residential zones.
Also, did the other communities determine per-night occupancy fees based on visitors’ additional use of town infrastructure or safety costs, such as fire and police?
Also related, I think both Town of Lyons residents and business owners would greatly benefit from knowing some basic numbers of both 1) how much additional revenue comes in to local business (and generated sales tax revenue to Town of Lyons) from tourism related businesses, including lodging and entertainment and wedding venues, and 2) how much additional costs to the Town are incurred from the number of tourists who come to those destination businesses. Then our Town of Lyons leaders can set goals and strategies for the town based on data. I know I live in a tourist town. I accept that fact, and I enjoy many of the aspects of living in an area that draws visitors, whether they are here to enjoy our Town of Lyons parks for free, to spend a little money on a meal or drinks and a live band, to pay hundreds of dollars for an outdoor festival experience, or to spend thousands of dollars on a wedding celebration. But our Town leaders need to make decisions that are based on facts and data, not just a general feeling that anything that encourages visitors who have money always benefits the Town of Lyons.
If any changes move forward in Town of Lyons code, there will be official public hearings for both the PCDC and the Lyons Board of Trustees. Because these codes are under review right now, Town of Lyons staff said that the Town of Lyons is not reviewing any requests for conditional use reviews or business licenses for bed and breakfasts until any code changes are finalized.
Also on Monday, the PCDC Commissioners reviewed another Lyons Primary Planning Area Master Plan draft, which will give guidance for future annexations to the Town of Lyons. They determined next steps should be one more round of edits, a workshop for Commissioners to discuss on February 13, and then notifying Boulder County for participation in a public hearing (required because the Primary Planning Area is set by an Intergovernmental Agreement with Boulder County and the Town of Lyons). The Master Plan must be adopted before any new annexation process is completed.