Taxing short-term rentals out of existence is a popular notion.
But state Sen. Chris Hansen’s proposed SB33 blocks resort communities from controlling their destinies. His bill renders short-term rentals (residential properties) commercial when rented 90 days, and quadruples their taxes—the largest short-term rental tax anywhere. With these lodging property taxes, short-term rental valuations increase exponentially; new taxes to public schools. All this, proponents contend, for “fairness.”
With Hansen’s taxes, future local government taxation is usurped by the state legislature – dominated by tourism opponents intent on reducing Interstate 70 gridlock. Forget about new local short-term rental (STR) taxes for affordable housing: with SB33 STRs will already be taxed to the limit. And, why does the bill only allow “market ” assessments of STRs, while hotels enjoy “income” or “cost” schemes that tax profitability? What’s “fair” for hotels isn’t “fair” for STRs; what’s “fair” to tax and spend legislators in Denver isn’t at all “fair” to resort communities.
Vail Valley Partnership president, Chris Romer, recently pronounced, “This (SB33) really is a mountain tourism industry killer.”
Some say real estate investment trusts (REIT) are the demon behind STRs and they, too, must be taxed to the max. Perhaps, but a survey of local property managers shows there may as many as eight REIT-owned trophy home STRs in Fraser Valley. At high tax rates, the real estate market floods and private equity firms acquire huge tracts. The anti-REIT clan plays Russian roulette with taxes.
Effective zoning and development policies are lost on the system. (So is tax slippage from STR cheats renting sub rosa.) It’s easier to attack short-term rentals in ways that look and feel good, than fix systemic challenges – like affordable ownership corridors, private investment, finance assistance, leveraging Denver Water Board lands….the list goes on.
Grand Lake resident