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short-term-rentals

Each new generation brings fresh ideas and concepts to our world. Some truly beneficial visions become trends and a new way of life; other ill-conceived notions become thankfully just fads. When a concept involves economic gain, it spreads quickly and often without organization or consideration of unintended consequences. It is the job of government to provide proper guidelines to protect the public and the landscape of its jurisdiction…and to enforce those guidelines.

Short term rentals (STRs) are found in all parts of Denver, but there is a noticeably heavy concentration of them in the central neighborhoods of District 10. Capitol Hill, Cheesman Park and Congress Park have the most STRs but options exist in almost all District 10 neighborhoods. In the Country Club zip codes very few licenses have been issued.

On June 12, 2016, after two years of discussion, Denver City Council approved a measure to allow STRs only in primary residences. The rules took effect on July 1st and gave hosts until December 31, 2016 to obtain a business license with the city, pay the city’s 10.75 percent Lodger’s Tax and come into compliance with the new regulations. Enforcement of the new law began on January 1, 2017. Less than seven weeks into enforcement, the City and County of Denver is approaching 1,000 Short Term Rental licenses issued, or close to one-third of known STR properties in the city. Although more work needs to be done to license hosts, Denver is believed to be a leader in compliance rates, ahead of other municipalities including Austin, Nashville, Portland and San Francisco, in compliance rate and/or number of licenses issued. This is a work in progress with a “host” of moving targets.

During these early stages of STR enforcement, the city is primarily focused on compliance. Excise & Licenses will be sending more than 1,000 Notice of Violation letters to unlicensed operators by the end of February. Those operators will have 14 days to comply before fines are issued. Penalties for operating a STR without a license can be up to $999 per incident, or per day, in the most egregious circumstances.

Although a majority of rentals operate within the law, Denver accepts reports of unlicensed STRs or other complaints three ways: calls to 3-1-1, online reports on Pocketgov (https://www.denvergov.org/ pocketgov/#/report-a-problem) or via email (STR@denvergov.org). If you see anything suspicious in your neighborhood, please report it. The city also proactively tracks and monitors properties using Denver Police calls for service, 311 reports and through a third-party software company called Host Compliance.

Host Compliance scans and monitors all STR websites, including Airbnb, VRBO, Flipkey and others looking for compliance with the requirement that STR operators must list their business license number in their advertisement. Host Compliance uses various algorithms and old-fashioned detective work to provide the operator name and address to Excise & Licenses so the department can issue violations and citations to those hosts who are operating without a license. Citations are sent via mail and in the most problematic cases, a property can be “red-tagged” or physically posted of a violation.

As part of an effort to continually assess the program and make policy recommendations on STR enforcement, Excise & Licenses has convened an advisory committee consisting of hosts, non-hosts, neighborhood representatives and industry representatives. All STR Advisory Committee meetings are open to the public, and presentation materials and minutes can be found on the advisory committee website (https://www.denvergov.org/content/ denvergov/en/denver-business-licensing-center/business-licenses/short-term-rentals/short-term-rental-advisory-committee.html). For more information on the city’s STR licensing requirements, please visit
www.Denvergov.org/ShortTermRentals.

The advancement of technology initiated the need for this STR program. The work of E&L in formulating the policies and procedures to govern this program should help manage this industry and maintain quality of life in our neighborhoods.