Short-term rentals, those mini-motels that the City Council authorized to operate in residential areas and other parts of Colorado Springs, are concentrating in four sections of town — the Broadmoor, Old Colorado City plus the west side, downtown and the Old North End.
The vast majority of the short-term rentals (STRs), many of them operating in residential areas, do not have the owner living on the property and are being operated full time as stand-alone businesses.
In addition, almost one-third of STRs are being managed by professional real estate companies rather than a live-in property owner. Adjacent residents with complaints about noise, trash and garbage and parking problems find themselves complaining to unconcerned property professionals rather than a live-in next-door neighbor.
In 70% of short-term rentals in Colorado Springs, the entire house is available for rental and often stands empty between rentals, even though in a residential area. Only 30% of STR rentals are in rooms or a converted garage or a cottage in or adjacent to an occupied home.
These facts about short-term rentals were presented to the City Council in early June during a work session, which allowed no public participation or response. Morgan Hester of city planning presented a “midyear update” on how the new STR ordinance is working.
STRs are better known by the internet sites that arrange the rentals — Airbnb, HomeAway (part of Expedia), FlipKey (part of TripAdvisor) and Booking. Marriott has announced plans to offer STRs on its hotel room booking site, thereby bringing a major international hotel company into the industry. Other major hotel chains, such as Hilton, are expected to follow.
One of the major problems with STRs is that they tend to concentrate in those parts of a city most attractive to travelers, such as downtowns, national historic districts and major tourist attractions. A study of STR locations in Colorado Springs by postal ZIP codes found 161 in 80904 (Old Colorado City plus the west side), 72 in 80906 (Broadmoor and Cheyenne Road), 106 in 80903 (downtown and Colorado College) and 66 in 80907 (Old North End).
These four ZIP codes are just 20% of the 19 in Colorado Springs, but they contained 60% of the short-term rentals.
From January through April of this year, the city required operators of STRs to get a permit and pay a fee. City planning prepared a “heat map” based on the location of the various permits. The highest concentrations of STRs showed red on the heat map, and the second highest showed yellow. Old Colorado City plus the west side and downtown showed red on the map, and the Broadmoor area and the Old North End came in yellow.
The majority of STR permits are in residential zones, even though STRs are clearly a commercial activity. A total of 204 were in single-family residential zones (R, R1-6 and R1-9), and 235 were in two-family zones (R-2).
Of the 679 total permits for STRs issued in the four months from January to April, 413 of the owners (61%) acknowledged they did not live on the property. A total of 240 owners (35%) said the STR was their primary residence, while 26 (4%) said they lived in the home but rented it out while traveling.
The Planning Department also kept track of whether an entire house or just rooms within a house were being made available as short-term rentals. Entire houses were being rented in 70% of the cases, and 30% were rentals of rooms or separate cottages on the property.
When it came to professional management of STRs, 471 (70%) were managed by the STR owner, and 208 (30%) were in the hands of a professional management company.
The Planning Department’s midyear update on STRs noted there were some problems getting STR owners and operators to get the required permits. In 28 instances, complaints from neighbors led to STRs being permitted. In 142 cases, the existence of STRs was discovered by city government officials with permits being issued as a result of code enforcement.
The City Council listened to the update but did not spend much time discussing all the statistics. There was a brief talk about there likely being many unpermitted STRs in the city and the fact that there is much money to be saved in permit fees by those who skip getting a permit.
We question whether short-term rentals are appropriate uses in single-family and two-family residential zones. This is particularly true in light of STRs mainly being an entire house being rented as a “party” or “entertainment” house with no owner occupant living on the property who is readily available to take complaints.
Colorado College political scientists Tom Cronin and Bob Loevy live in ZIP codes loaded with short-term rentals.