More Colorado cities raised taxes on short-term rentals this election — and are using the money for affordable housing

Housing affordability is a big issue for all Coloradans, which is evident from the slew of housing ballot measures in state and local elections this year.

An increasingly popular proposition in resort communities is to levy higher taxes on short-term rentals like Airbnbs. On Tuesday, voters in several Colorado communities — Aspen, Carbondale, Dillon, Salida and Steamboat — supported increasing the tax visitors pay when staying in a short-term rental in their communities. Other cities, including Crested Butte, Ouray and Telluride, passed similar measures last year.

In all of these locations, at least some of this money will be used to fund affordable housing initiatives.

The biggest increase in this year’s election was by steamer, where, starting next year, people will pay an additional 9% to stay at an Airbnb. The city estimates it could bring in around $11 million a year for the next 20 years.

“It’s a major local investment in housing and it’s going to open a lot of doors for us,said Jason Peasley, the head of Yampa Valley Housing Authority.

A significant portion of the revenue generated by the new tax at Steamboat will likely fund the housing authority’s Brown Ranch project – a plan to build more than 2,000 homes on 530 acres just outside the city limits. town. The project master plan includes both single and multi-family homes, shops, medical practices and open spaces. It also includes major infrastructure investments to expand the city’s water supply system and build roads.

The total development price for Brown Ranch is approximately $400 million. The money will come from various sources such as federal and state grants. It would have been much harder to raise funds if voters had rejected the short-term rental tax, Peasley said, in part because the government requires cities to invest their own money in such a project in order to receive grants. subsidies.

“I don’t think that would have completely eliminated the possibility that we could fund it. It would only delay the moment,” he said.

The explosion in the number of short-term rentals in Colorado resort areas – amplified by the pandemic – some residents blame them for gobbling up housing that would otherwise go to locals, and worsening a chronic housing shortage.

“[Short-term rentals] are an important part of our visitor accommodation and our tourism-based economies…but undoubtedly have many impacts on communities, on housing stocks,” said Margaret Bowes, Executive Director of the Colorado Ski Towns Association.

Higher taxes aren’t the only option to manage the growth of short-term rentals. For example, some communities have chosen to limit the number of short-term rentals allowed in town.

“There is no one-size-fits-all solution“, Bowes said.

Opponents of imposing higher tax rates say the added cost could scare away visitors and ultimately hurt tourism. But taxing short-term renters has so far garnered fairly broad support in Colorado’s resort areas. Final tallies for the 2022 election are yet to be certified, but it appears Grand Junction was the only city this year to vote against higher taxes on such visits.

Offie Clark is a snowboard instructor who lives in Carbondale. He was unaware of the short-term rental tax on the ballot, but said if he had, he would have voted for it. He doesn’t think the extra cost will make a difference to most people visiting Aspen and Snowmass.

“They will be able to absorb the price and will absorb almost any price increase,” Clark said.

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