Airbnb-style rentals may be impacting neighborhoods and affordable housing 

click to enlarge Some Manitou motels want to offer long-term rentals. - J. ADRIAN STANLEY
  • J. Adrian Stanley
  • Some Manitou motels want to offer long-term rentals.

For Welling Clark, a certain west-side duplex is the poster child of what can go wrong with increasingly popular, Airbnb-style, short-term rentals.

Clark, who is president of the Organization of Westside Neighbors (OWN), owner of an Old Colorado City bed-and-breakfast and husband of County Commissioner Sallie Clark, says neighbors of the duplex griped to him after strange cars started parking along the street. Street parking is a big issue in that area, because many older homes were, as he puts it, "built for horses, not cars."

In his capacity as OWN president, Clark investigated the complaints. He found the duplex listed online, advertised as sleeping up to 22 people. Neighbors said it looked like about 20 guys — apparently a construction crew from Utah — had squeezed into both duplex units. Clark says they stayed for weeks, annoying neighbors.

That's just one example of the negative feedback Clark says he's heard about some short-term rentals. Neighbors grumbled about noisy late-night parties and trash dumped in their yards near another OCC short-term rental. Clark also heard about a short-term rental in the Cedar Heights gated community that caused concern because of raucous parties and guests being given security codes to the gate.

"In general," Clark says of short-term rentals, "the experiences we have, is when I find out about it, we have problems."

The growing popularity of short-term rentals — marketed on popular Internet sites like Airbnb and VRBO — apparently is beginning to change neighborhoods, putting a squeeze on affordable housing as landlords find they can make more money renting short-term than long-term. In cities like Colorado Springs and Manitou Springs, which already lack adequate affordable housing, that shift could further exacerbate the problem.

Randy Hodges, a Manitou City Councilor who owns the Avenue Hotel B&B with his wife, says he's heard a lot of negative feedback.

"I hear my constituent concerns about increased traffic in residential areas, strangers in the neighborhoods where usually there are few, parties where there were never any before and the general feeling that businesses should stay in the commercially zoned areas of the City where it has always been," Hodges writes in an email to the Independent.

Additionally, as reported in last week's Independent, the rentals create competition for traditional hospitality businesses, which some view as unfair because short-term rental owners often do not meet the same regulations or pay the same taxes and fees. That can also cut into governments' bottom line.

On the other hand, renting out a home, or even a room, can be a great moneymaker for a landlord, while providing a service to travelers who prefer not to stay in a hotel or motel. Short-term rentals are often also economical.

In Colorado Springs, Airbnb lists more than 300 short-term rentals at an average price of $129 per night. But a private room for $25 per night and a "writer's cabin" at $75 per night immediately pop up.

Colorado Springs has cracked down on some short-term rentals to ensure they are paying taxes, but has otherwise declined to regulate the rentals so far.

That's disappointing to Dave Munger, president of the Council of Neighbors and Organizations (CONO), who says he would like to see short-term rentals "treated like any other business," meaning, among other things, that they would have to seek a variance to operate in a residential area.

Jan Doran, past president of CONO and current administrator of Discovery Homeowners Association in the northwest part of the city, says HOAs often ban short-term rentals (hers does), but she doesn't think that's enough.

"I am a firm believer that they need to be regulated by the city," Doran says, "because you can still have the HOA regulations if the HOA chooses."

Other cities are taking more action. On April 14, Manitou Springs' one-year moratorium on new short-term rentals will expire, but the town's City Council quickly plans to consider an ordinance capping the number of rentals at 2 percent of the housing stock, or 56 rentals. Twenty-five of those slots are already taken. Short-term rentals would also have to be spaced at a set distance, to limit impact on neighborhoods.

Alan Delwiche, Manitou's Planning Commission chair, says he met with residents several times over the past year before preparing the proposed ordinance. His main concern, he says, was the impact of short-term rentals on neighborhoods.

"This is happening all over the country, where communities are trying to deal with it," he says. "And one issue is loss of neighborhood."

Manitou Planning Director Wade Burkholder adds, "We found people that were renting out their couches for $80 a night, and that's where we thought this really isn't in the best interest of the city or its residents."

Michael Clark owns one of the few legal short-term rentals in Manitou Springs to be "grandfathered" in: a large, stately Victorian.

The home, a long-term rental until four years ago, might seem like the type of place that would attract large, noisy parties — it is listed on various sites as "420-friendly," meaning Clark allows guests to smoke recreational marijuana on the premises.

But Clark says over the years he's received just two calls from neighbors, who know to contact him with any problems. Generally, he says, he ends up renting the home to families. His acceptance of marijuana, he says, tends to attract mellow Baby Boomers looking to smoke a joint in peace.

Clark says he doesn't understand why a short-term rental like his, following all applicable laws, is deemed any more disruptive.

"Whatever we do with that house, there's going to be renters there," he says. "And sometimes you get a renter that's got a barking dog or they're loud late."

Even Welling Clark (no relation) is willing to admit that not all short-term rentals are disruptive.

"The good ones," he says, "you probably don't even know they exist."

But Michael Clark's story hints at another problem with short-term rentals — his property used to be a rental home. Both Manitou and Colorado Springs have a shortage of affordable housing that could be exacerbated if landlords start switching long-term rentals to more lucrative, short-term rentals.

The 2014 Colorado Springs and El Paso County Affordable Housing Needs Assessment compared distribution of household incomes to housing unit prices in El Paso County and found an estimated gap of 24,513 affordable units.

"Given the market tendency to produce higher-end housing rather than affordable housing, the gap is expected to grow over the next five years," the report stated. "The largest gap in terms of sheer number of units is within moderate-income households making between 80 percent and 120 percent of the area median income."

The situation is not improving. According to the April 2016 National Apartment List Rent Report, Colorado Springs had the fastest-growing rent in March (compared with a year before) with an 11.4 percent increase. Nationwide, rent increased an average of 2.7 percent in the same time period.

(On the bright side, a median one-bedroom in the Springs still costs a relatively affordable $790 a month compared to $1,350 in Denver.)

Delwiche says when Manitou's team was drafting the town's proposed ordinance on short-term rentals, affordable housing was a consideration. Interestingly, he says the town just wrote an ordinance to deal with the opposite problem — aging motels renting long-term apartments. The town's new ordinance on that issue is meant to ensure old motel rooms are converted into safe, long-term dwellings.

Like short-term rentals, motels-turned-apartments is a national trend.

"It's like the paradigm shift," Delwiche says, "where long-term residences are being converted to short-term rentals, and meanwhile we have a lot of aging motels ... that are struggling because there is not a year-round market for that type of property, so they end up wanting to do long-term rentals of their property."

"In a way," he adds, "it's humorous."

This is the last in a two-part series on short-term rentals. Last week, we explored issues of fairness between short-term rentals and the traditional hospitality industry, including taxes.

  • A certain west-side duplex is the poster child of what can go wrong.


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