City Council Study Session Agenda and Packet 2015 11 10

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SUBJECT: RECREATION CENTER EXPANSION AND AQUATIC CENTER OPTIONS DATE: NOVEMBER 10, 2015 PAGE4OF5 Towns and Cities in Colorado 1. Aspen. In 2011, the Aspen City Council adopted an ordinance allowing for residential vacation rentals in Lodging Zone Districts, Commercial Zone Districts, Mixed Use Zone Districts, and Residential Zone Districts. The ordinance also limits rentals to no more than 30 days. It requires that the host obtain a vacation rental permit and a city tax ID and collect tax. If there is a homeowner's association, the host must notify the HOA of the application for a vacation rental permit. The ordinance prohibits a host from renting individual rooms and requires that the host have a local representative to respond to renter issues. 2. Vail. Vail has not adopted any specific regulations for vacation rentals. Vail does not require a business license for persons who rent no more than two units. Vail does require that owners pay sales and lodging taxes. 3. Breckinridge. Hosts must obtain an Accommodations Unit license and pay an annual fee. Hosts must also collect sales and lodging tax. 4. Frisco. Requires hosts to obtain a town business license and pay sales and lodging taxes. 5. Colorado Springs. Short -term rentals are allowed in any zone where single family or multi - family residential uses are allowed. Hosts must collect sales and lodging tax. No signage identifying the property as a short -term rental is permitted. FISCAL IMPACT: Staff conducted an analysis of potential tax revenues from short -term rentals in Louisville based on revenue assumptions generated by the City of Boulder. The analysis showed, based on City of Boulder's visitation rates, that allowing and taxing short -term rentals in Louisville could potentially generate between $20,000 and $60,000 in new revenue. However, since visitation rates in Louisville would likely be much lower than in the City of Boulder, staff believes it is very unlikely allowing and taxing short - term rentals would reach even the lower level of that potential range. Furthermore, staff believes the likely potential revenue would not fully cover additional costs associated with the costs of issuing business licenses, collecting and auditing taxes imposed on short -term rentals, and code enforcement related to short -term rentals if the City adopts and strictly enforces regulations governing short -term rentals. Finally, if the Council wants to change the City's zoning to allow the short -term rentals in residential zone districts, the effect would be to expand the City's tax base on which sales tax and lodging tax is applied. This would require a TABOR election, like Boulder conducted on November 2, 2015. RECOMMENDATION: Staff is seeking a discussion with City Council and the Community regarding the City's short -term rental policies and regulations with the following conversation topics: • Should potential short -term rental regulations be updated for clarification? • Should potential short -term rental regulations be modified to expand, or restrict the activity in Louisville in terms of: • Location? CITY COUNCIL COMMUNICATION 11