Aspen voters will decide in November whether customers of vacation rental properties will face a new 5% or 10% tax.
Aspen City Council unanimously approved ballot wording at a special business session on Monday, after making its own adjustments to the question, for a 30-day rental housing tax .
“I think it’s a proposal that our community has been asking to see. They want the opportunity to vote on it,” Mayor Torre said.
The question will ask voters to decide on a proposed 5% tax rate for condo hotels and owner-occupied rental properties. The same question will ask for a 10% tax rate for guests of houses that are not full-time residences and houses used for investment purposes.
The city council has struggled with the impact of short-term rentals, commonly known as STRs, in recent years as the industry has boomed in Aspen and elsewhere. In July, the city commissioned a survey to ascertain the public’s appetite for a DOS tax. Nearly two-thirds of Aspen voters polled said they would support a tax on STRs.
The proposed tax is the council’s latest effort to better regulate the industry, which council members say has cut residential housing for people who want to live and work full-time in Aspen. STRs have also altered the fabric of residential neighborhoods and strained services, critics said.
Opponents of an STR tax have argued that it will deter visitors and hurt an industry that provides vacation opportunities for people who might not be able to afford to stay in an Aspen hotel or lodge. Local residents are also renting out their homes to make ends meet, and a new tax could hurt their earning potential, those against the tax said.
The council agreed that a minimum of 70% of tax revenue would go to the city’s housing program, with the option of using the remaining 30% for environmental efforts and infrastructural improvements.
If approved, the tax would come into effect on May 1. City officials estimate the tax would raise $9.14 million in its first full year of implementation.
Councilman Ward Hauenstein said he doesn’t support taxing condo lodges because of their contributions to the Aspen community over the decades. But the other three people present – John Doyle, Rachel Richards and Torre – said condo hotels should be included. Councilman Skippy Mesirow did not attend the meeting.
“That’s the cost part of doing business here,” Councilwoman Rachel Richards said. “It’s part of maintaining the benefits, the attraction and the things that generate the high demand from our customers and customers from all over the world to come here. I think we have an obligation to maintain both our community and these amenities.
Doyle added that all STR properties need to do their part to offset their impacts.
“I agree that our condo hotels which have been in business for years and have provided a necessary bed base for our tourists who come here to enjoy what we have to offer – a lived-in community, a place with ‘great infrastructure that they’ve come to expect at other high-end resorts,’ he said. “And some of those hotels house some of their workers, but currently they’re not contributing as much to the current lack of housing and the current lack of necessary infrastructure and the environmental issues that this tax is trying to address.”
The October 2020 City Council passed legislation requiring owners of STR properties to have a business license and vacation rental permit filed with the city. Business licenses require property owners to pay the city’s 2% lodging and 2.4% sales tax. A City Council moratorium placed in December on new STR license applications expires on September 30.