Salida Seeks Short Term Rental Policy Solutions to Help Address Workforce Housing Crisis

Though certainly not the only factor, the workforce housing shortage in Salida has been exacerbated by the large and growing number of properties being converted to short-term rentals (STRs) in both residential and commercial areas. As part of a series of steps to address the housing crisis, City Council recently adopted a 90-day emergency moratorium on the issuance of new STR licenses to give the City time to create and implement new policies.

Exceptions to the moratorium were made for licenses negotiated specifically through planned developments, annexations, and other agreements. 

Since 2016, when the existing policies were implemented, the percentage of STRs in commercial and industrial zones has risen from 9% of the residential stock to approximately 30%. A majority of this increase has occurred in the Historic Downtown District and immediate surrounding area. This rapid rise signifies a reduction in the number of potential long-term housing options. The profitability of STRs is also having an impact on the quickly rising sales price of residential units. 

“Short term rentals in the downtown district, the majority of which are owned by individuals who live outside Chaffee County, have greatly reduced the number of available long-term units in that area. This has had many downstream impacts not only on availability but also rental and sales,” said Bill Almquist, Community Development Director. “So we’re looking at what we can do before the downtown and surrounding areas turn entirely into short term rentals.”

The City’s policy goals focus on preserving long-term housing and creating a level playing field between STRs and other short-term lodging options such as hotels and motels (most of which are subject to higher, commercial property tax rates). 

Feedback regarding STRs was solicited from the public via an online survey from August 10th - September 3rd, 2021. The results will help inform potential policy changes that will be considered by Planning Commission and City Council in late September and early October. A summary of the nearly 750 survey responses can be viewed below, in chart form. Additional long-answer written responses may also be viewed by contacting the Community Development Department. 

Potential solutions proposed in the public survey include: 

• Apply caps to the number of STR licenses within commercial and industrial zone districts to distribute the short-term rentals more evenly throughout Salida.
• Limit all new licenses to Chaffee County residents, either primarily or entirely.
• Standardize the initial application fees for all STR licenses in all zone districts, and enforce the Occupational Lodging Tax based upon the number of bedrooms offered in the unit.