Landlords Respond to Summit Lease to Locals County Short-Term Rental Conversion Program
Summit County’s short-term rental conversion program has been a hot topic since Summit County Housing Director Jason Dietz first suggested the idea during a Council of Commissioners working session. of Summit County during the summer.
Since the inception of the program, the subject has generated a lot of buzz, especially from property managers. Many of these speakers contributed to the conversation about the impact of the program on their businesses.
Now that the program – which is a partnership between the County and the Town of Breckenridge – is a tangible thing, what do these business owners think?
Toby Babich, president of the Summit Area Alliance of Vacation Rental Managers and owner of Breckenridge Resort Managers, was one of the few stakeholders who began discussing the proposed program with the county early on. Now that he’s deployed, Babich said he’s happy to see that there are a few different phases of the program and a varying degree of incentives depending on the length of the lease and the number of rooms.
“I think it’s the amount of flexibility and the amount of options that they’ve built into the program,” Babich said, pointing out the positives. “It wasn’t just a small amount of money for a one-year lease. They had different lease terms, they had different levels of room counts, and they all have different amounts built in.
Peter Reeburgh, owner of SummitCove Vacation Lodging in Keystone and a board member of the Alliance of Vacation Rental Managers, said he was initially skeptical about the financial suitability of the program for owners. Reeburgh said he was looking for ways to provide housing for some of his employees. So he was brainstorming ideas for his own conversion program alongside the county in case his proposal didn’t make sense for his business.
“Once this program was deployed, I redid all my spreadsheets and calculations, and it’s pretty good,” Reeburgh said. “Some selected properties would really benefit the owner, and it would be a good living space for the employees. “
Reeburgh noted that property management companies are not immune to local workforce challenges. He was very interested in the program to see if any of its owners would be interested in converting their properties into long term housing that could be occupied by his own staff.
While both hope the program is successful, they say it’s too early to tell. Reeburgh noted that this was a pilot program and he remains skeptical beyond this first year.
“I have concerns about what happens beyond a year and what kind of funding is available beyond a year,” Reeburgh said. “What I don’t want to do is go back to my own model where it was getting pretty hard to get the math to work without being prompted to convert a short term rental into a long term rental.”
Babich also noted that unknown long-term funding is cause for concern. Due to the county’s highly regarded real estate market, Babich said the county will likely need to develop some sort of long-term incentive to keep the program running.
Babich also cited other grounds for concern, particularly regarding Breckenridge. Before the program rolls out, the city has put a cap on the number of short-term rental licenses, which will go into effect on November 2. The cap is set at around 2,200 licenses, and Breckenridge City Manager Rick Holman said the city currently has 2,795 non-exempt licenses. This is worrying for Babich, who said he was hesitant to encourage his owners to participate in the program.
“The cap they put in place unfortunately created an environment in which I cannot, in good conscience, ask one of my owners to go from short term to long term knowing that they cannot then get a short term license. come back next year if they want to go in that direction, ”Babich said especially of the Breckenridge units. “The hat really stopped Breckenridge property managers from participating in this program.”
Babich said that according to his understanding, owners of short-term rental licenses would convert to long-term licenses, meaning they would forfeit their short-term rental license. After renting their homes long term, they would no longer have the option to rent short term in the future due to the city cap.
According to Holman, that’s not quite how the program would work. Holman explained in an email that nothing says owners have to give up their license in the short term. Holman said they can keep their license as long as they don’t rent short-term during the period they’ve agreed to rent to a local worker and can switch back to short-term rental once their lease is over. long term expired.
To be eligible for the county program, owners must be based in Breckenridge or unincorporated Summit County.
Babich believes the Breckenridge cap severely limits his level of participation. He said only about 15% of his wallet is outside the city limits, most of which is near Copper Mountain and Keystone. So far, he has identified two properties that might be suitable for the Lease to Locals program, although he said he is working on marketing campaigns to disseminate information about the program to his clients.
As for Reeburgh, he said he had identified around 10 properties that might be suitable. Reeburgh said he was exploring these units for one-year leases and they would be reserved specifically for his workforce. Reeburgh said he had around three employees who needed housing before December.
If those owners are interested in the program, Reeburgh said he plans to take additional steps to ensure the units are well maintained while his staff reside there. He plans to use the incentive money to pay for monthly cleaning services as well as regular inspections and deep cleaning at the end of the lease. Reeburgh noted that the move will not be profitable for him, but his need for employees outweighs the costs.
As the program gathers momentum, Reeburgh and Babich said they would be interested to see how it plays out over the next year or so.