On Monday, Denver City Council approved a short-term-rental bill 9-2 largely out of respect for the two years it took to craft the ordinance, which was spearheaded by councilmember Mary Beth Susman.
The bill legalizes and taxes STRs in Denver's residential neighborhoods and requires operators to get a business license and a tax ID. A controversial provision would only allow a renter or homeowner to operate an STR out of their primary residence. If said property is a rental, tenants would need to provide proof that their landlord approves.
After hearing more than sixty speakers during the five-and-a-half-hour hearing, many councilmembers expressed disagreement with the bill. They acknowledged the compromises made by both sides; however, it seemed all for naught, as the compromises crafted a bill that ultimately nobody is really happy with. But some members and speakers mentioned that it is easier to pass more restrictive legislation up front with the opportunity to shed provisions down the road.
”Right now I think Airbnb’s chairman is the only person happy with this,” said councilman Kevin Flynn, who joined Rafael Espinoza in voting no. Flynn proposed an amendment earlier in the year that he felt would have given neighborhoods more of a voice in the matter. The current bill failed in that respect, he said.
Espinoza showed little confidence in the enforcement process and frustration that many details were left out in the ordinance as he questioned Denver's Department of Excise and Licenses for nearly a half hour. He said that a law needs to be created “that’s going to capture 100 percent of the industry with strong streamline enforcement...and this law does neither.”
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Representatives of Excise and Licenses explained that two to three of its existing six inspectors who monitor the department's 100 license types will be dedicated to working with neighborhood groups and others to enforce and perform audits and spot checks on about 20 percent of the estimated 2,000 STRs in the city. Inspectors will also comb through online ads to make sure a listing's registration number is posted. But the department's efforts seemed more reactionary than proactive, according to some councilmembers.
Business licenses should be available as early as July. Hard enforcement won't begin until January 1, 2017. Until then, the Excise and Licenses department will set up a detailed fee schedule and citation process, which could require delinquent operators to answer court summons and hire legal counsel if necessary.
District 9 representative Albus Brooks voted in favor of the legislation. He said that over the past two years, he’s been “on the front lines” as his family watched an STR operate just down the street from their home. While his neighbor vacationed in Bali for eight months, Brooks saw people in and out of the house and never saw a reason to complain.
“My mind changed in two years,” said Brooks, who suggested he was open to introducing language to the bill that would let residents operate STRs out of a secondary property or a primary residence, but just one.
District 10 representative Wayne New said that all the talk about enforcement gave him a “real bad taste in my mouth." He encouraged the Department of Excise and Licenses to hire more inspectors if needed and avoid “crisis management.”