Douglas County approves short-term rental regulations

BY ELLIS ARNOLD EARNOLD@COLORADOCOMMUNITYMEDIA.COM

Douglas County became the latest local government in the Denver metro area to approve a policy that regulates short-term rentals — short stays at a property booked through sites like Airbnb or Vrbo — allowing the rentals only in certain parts of the county.

Douglas County Commissioner George Teal, who supported the policy, said he heard from a household that lives on a xed income who wanted to take advantage of the opportunity to o er a short-term rental.

ey want to “augment an already limited income as they go into their twilight years,” Teal said at the July 11 commissioners meeting.

e new ordinance requires owners to apply for licenses to operate homes as short-term rental properties.

e ordinance de nes a short‐term rental as lasting less than 30 consecutive days. It applies to unincorporated parts of Douglas County

— areas outside of municipalities.

Douglas County hasn’t had a general prohibition on short-term rentals for at least the past 20 years, but there were only a few small areas where they were explicitly allowed, according to county sta .

As of early 2020, Castle Pines and Parker prohibit short-term rentals, Colorado Community Media reported at the time.

After “substantial community engagement,” in February this year, Lone Tree City Council approved two ordinances to prohibit the creation of new short-term rentals and regulate existing ones, the city’s website says.

Castle Rock does not regulate short-term rentals, but all businesses there must obtain a town business license and collect applicable lodging and sales tax.

Public airs opinions

One member of the public, speaking at the meeting, argued that short-term rentals should be allowed based on “the principle, simply, of private property rights.”

“Especially people with acreage, this is a way for us to preserve our land on our own dime,” he told the commissioners.

On the other hand, the Happy Canyon Homeowners Association was among those opposing shortterm rentals, arguing they could a ect the housing market.

“We believe the (ordinance) will encourage outside residential investment rms such as Blackstone to purchase more homes in Douglas County, resulting in a depleted inventory for the general public and inadvertently creating rental communities,” wrote Richard West, president of the Happy Canyon HOA, in a letter to the county.

A board member of the Happy Canyon group came to the July 11 meeting and expressed concern about the impact of short-term rentals on the supply of a ordable housing, fearing that investors would take housing units out of the long-term rental market.

Research published in Harvard Business Review in 2019 suggested that Airbnb listings may have a relatively small amount of e ect on housing prices.

As background information, the article argues that if an area has a lot of restaurants and bars, and if awareness of Airbnb increases — measured using the Google search index for the keyword “Airbnb” — then any jump in Airbnb supply in that area is likely driven by an increase in demand for short-term rentals through Airbnb, rather than local economic conditions.

“Under this assumption, we show that a 1% increase in Airbnb listings is causally associated with a 0.018% increase in rental rates and a 0.026% increase in house prices,” the article says. “While these e ects may seem very small, consider that Airbnb’s year-over-year average growth is about 44%.”

But how any e ect could play out in rural areas of Douglas County is unclear.

“Folks, we’re not a tourist mecca,” Teal said.

Many areas of the county, including highly populated spots such as Highlands Ranch and the Pinery area south of Parker, are among the places where short-term rentals would be prohibited under current rules, even under the county’s new law.

‘Capitalize on their properties’ e Happy Canyon board member argued the county should not allow short-term rentals by “non-resident” owners — people who own properties but don’t live in them. ere is not an owner-occupancy requirement in the new law, according to county sta . e law allows for local “agents,” such as an individual or the representative of a property management company, who may be someone other than the property owner, to serve as the management of the short-term rental unit.

( e property owner may appoint themselves as the local agent.)

Despite the concerns, Teal said he’s heard support in the community for short-term rentals, adding that those who run agricultural businesses could bene t.