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After multiple delays and much debate about cost of living and affordable housing, the Basalt Town >Council will again consider a per-bedroom annual fee for short-term rental license-holders.
The council is considering levying a $2,532-per-bedroom annual fee on STR licenses, with exceptions for those who rent for 60 or fewer days each year or those who use the unit as their primary residence. The issue returns to the councils agenda on Tuesday evening.
After hours of discussions that go back to January, the parameters and exceptions to the fee are subject to change. The proposal now alternatives of $750 or $1,670 per bedroom, and council members have discussed widening the criteria for exceptions. Council members could scrap the fee ordinance entirely or continue the conversation for a third time and a vote at a later date.
The fee and its suggested amount is the product of a STR Regulatory Fee Study from Denver-based Economic and Planning Systems. The study analyzed the effect of STRs on cost of living and affordable housing demand.
Using local economic data on the workforce, affordability gap and occupancy rates, the study concluded that the town could levy a fee as high as $5,064 per bedroom per year. After churning through the Basalt Affordable Community Housing group and the Basalt Planning and Zoning Commission, the proposed fee was reduced.
After it passed unanimously on first reading earlier this year, some council members soured on the fee, saying it was too high. Others dug in their heels, saying the fee could be easily passed to customers without being too impactful.
With only around 40 STR licenses within the town borders, the $2,532 fee is estimated to generate about $100,000 annually not even close to the cost of construction of a single affordable housing unit.
At an April 8 council meeting, Brenda Wild, a real estate broker and Basalt resident, urged the council to reject the fee ordinance.
What youre proposing will raise prices in the real estate market, disable owners to be able to rent their properties by imposing the highest fees nationwide, she said. This move will not add rentals to the employee housing market. The units most likely will sit vacant and not generate tax nor revenue dollars for the town.
Tucker Knight (no relation to Basalt Mayor David Knight), a teacher at Basalt Middle School, highlighted the affordable housing crisis facing nonprofits, schools and all businesses in the region.
We need nonprofits and public schools as much as we need local businesses. All of these things work together to create a really strong community, and affordable housing is a really key part of that solution, she said. You have presented a potential solution to the problem. It wouldnt solve everything, but it would really help in a really tangible way.
Julie Wycoff said the fee would impact license-holders ability to afford the local cost of living and that long-term rentals arent a good option for some property owners. For her, the STR market allows her to keep the space she owns open for her daughter and family to visit on short notice.
There are a lot of people that have bought property with and made it affordable by having the ability to rent short term, she said. And with this increase, it changes a rule. I appreciate where youre going with this, but then will it be more next year?
Councilor Angela Anderson has been a staunch supporter of the fee as first proposed throughout the discussions.
I think whats before us today is STRs are commercial businesses operating in residential neighborhoods that have an impact on the people who live here, she said at the April 8 meeting. I dont see it as a penalty for STR operators. The good news about this fee is that you can pass that on to the people who are renting your property.
She calculated that a three-bedroom unit, rented out 120 nights a year, would only need to increase the price by $40 per night to absorb the fee.
Councilor Rick Stevens noted that not enough council members were ready to pass the fee at the April 8 meeting, with just Anderson, Mayor David Knight and Councilor Hannah Berman supporting the ordinance as written. They ultimately voted 6-1 to continue the discussion, and Knight cast the dissenting vote.
I do believe there needs to be a fee. Im fine with the timing. I think it should be much smaller, said Councilor Dieter Schendler, who brought up the possibility of a fee be close to the $750 option listed on the Tuesdays agenda.
Berman said that its OK to have half of license-holders exempt from the fee, because its about more than raising funds. A goal is to encourage owners to rent longer term to the local workforce.
Its not just about raising funds, which it does to some smaller degree here, but it could curb behavior, she said. Even if it curbed behavior in just a few instances, youre creating long-term housing, and that has financial and community benefit to the town of Basalt.
Front of mind for the council is the possibility of going to voters for an increase in lodging tax, which would impact hotels in addition to STRs. The town collects a 3% sales tax and a 4% lodging tax.
Councilor Angele Dupre-Butchart worried that too strong of a fee would alienate some of the electorate in a potential lodging tax increase ballot question. Colorado law requires that municipalities ask voters for tax increases.
Im afraid that if we go too big on this and we dont get it right, and people do feel penalized even though it is not our intention, of course, for this to be a penalty or feel like one then we might skew voters away from catching the big fish, which is what I would like to catch: an increase in overall lodging tax by the voters, she said at the April 8 meeting.
The town of Carbondale instituted a per-bedroom fee for its STR license holders in 2022. For owner-occupied units, the fee is $100 per bedroom to a maximum of $400 per license. For non-owner-occupied units, the fee is $175 per bedroom to a maximum of $875 per license.
The town imposes a 6% tax on the gross rental price paid by STR customers, which is inclusive of any service charges or fees and is in addition to their 2% lodging tax.
According to Patrick Thibault, Carbondales town clerk, the fee structure allows the STR license program to pay for itself, not generate meaningful revenue for affordable housing projects.
It wasnt [meant] to really be a huge generator of revenue for the town, Thibault said in a recent interview. The fees were really instituted to make sure that the town was able to cover the staff cost, and also the cost of the software usage and things.
The 2025 Carbondale budget predicts $20,000 in STR fee revenue. The town collected $15,525 in 2024, $1,750 in 2023 and $18,925 in 2022.
Currently, there are about 50 active STR accounts, Thibault said, which includes 11 applications working through the approval process.
If the higher fees in Basalt pass, Thibault said it would likely influence Carbondale to take another look at its fee structure.
I do believe that if it was successful, we would most definitely want to re-examine those fees, he said. And there could be folks that potentially were thinking about doing an STR in Basalt that would then shift their focus to Carbondale because of affordability.