Denver Short-Term Rental Advisory Committee Meeting Minutes September 25, V. Public Comment. 1. Attendance

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1 1. Attendance Participant Organization Molly Duplechian Denver Department of Excise and Licenses Brian Snow Denver Department of Excise and Licenses Erica Rogers Denver Department of Excise and Licenses Carrie Atiyeh Visit Denver Susan Bailey STR Host (call-in) Kevin Flynn City Council District 2 Erin Ganser STR Host Jack Garber STR Host (call-in) Buffy Gilfoil STR Host Kemi Lawore AirBNB Amie Mayhew Colorado Hotel & Lodging Association (call-in) George Mayl Non-Host Cindy Sestrich Non-Host Charlotte Winzenburg Non-Host Sabrina Zunker Denver Metro Association of Realtors 2. Agenda I. Introductions II. III. IV. Licensing and Enforcement update Short Term Rental Action Plan Finalizing insurance limits and rules V. Public Comment 1

2 VI. Other Items/Adjourn 3. Meeting Notes Item 1. Introductions/Public Comment 2. Licensing/Enforcement updates (EXL) 3. Licensing/Enforcement updates (EXL) Discussion Introductions Molly Duplechian (EXL) reminded the group that anyone who wants to provide a formal public comment at the end of the meeting should fill out a form and return to Erica. Molly presented the group with an update on the August and September stats, including number of licenses, compliance rates, and notice of violations. While the number of listings is increasing, the number of licenses seems to be remaining stable. The total number of STR licenses in Denver: 2,054. Total number of unique STR properties in Denver: 4,426. This places Denver at a licensing rate of 49%. Molly also provided an update on the number of STR Lodger s Tax Accounts (2,826) and the amount of Lodger s Tax revenue collected through August 2018 ($4.5 million). o This is much higher than where we were this time last year, but this may be due to a change in the way licensees are remitting their taxes to the city. Taking into account the Lodger s Tax Account numbers, Denver is at a 64% compliance rate. Brian Snow (EXL) presented the updated numbers of the Notice of Violations (NOVs) and Admin Citations (ACs) that have been sent out. Brian has started a new automated process for sending out these NOVs and ACs. o Since May 17, 2018, a total of 686 NOVs have been issued. Out of the 487 of these NOVs that are past a cure date, only 180 remain out of compliance, meaning that we are seeing approximately a 63% success rate with NOVs alone. o Since June 9, 2018, 146 first-level ACs have been issued, with a 90% success rate. A second-level AC would include a physical posting at the STR location. Molly then reviewed the data regarding STR complaints received by EXL. Most of these complaints deal with technology, safety, and primary residence. EXL currently has 2

3 4. STR Enforcement Action Plan and Discussion approximately 40 open STR investigations which may be referred to the City Attorney s Office, depending on how the investigations go. Molly reviewed the STR Enforcement Action Plan, which outlined four major issues, each with several solutions and action items. The first area of the plan deals with the issue of unlicensed hosts. EXL is currently working on educational outreach to hosts and making data available for all STR licenses. EXL is also working to increase accountability for platforms who advertise unlicensed hosts and to identify tax licensees who need a corresponding STR license. o Councilman Flynn thanked Brian for the measures EXL has taken to decrease the number of unlicensed hosts in the city. He then asked Kemi Lawore if there were any roadblocks to ensuring that unlicensed hosts would not be able to advertise on AirBNB s website. Kemi stressed that there were some limitations on what AirBNB can do, but that she has spoken with Molly and Ashley Kilroy (Director of EXL) to increase the education and outreach to hosts who are simply unaware of what they need to do. o Councilman Flynn expressed that he believes requiring a license number to advertise on a hosting site would solve a lot of issues, and Erin Ganser echoed this sentiment. Kemi stated that this is something they hear often. o One of the members on the conference line asked Kemi if she was aware of any other cities that have open databases of licensed operators, and wondered if this would open up licensed folks to undue targeting from neighbors even if they are following the rules. Molly stated that this is something the city does for all licenses, and we are just looking at simplifying the data and making it easier to find. Kemi said that she wasn t familiar with many instances of undue targeting in cities with open data. The second area of the plan addresses how to improve applications. To this end, EXL has added guidance on our website addressing lodging license eligibility and current STR application requirements. EXL is also working to improve the lodger s tax license application language to make it clearer that a host needs to renew an STR license yearly, even though they may only need to renew the tax license every two years. The third area of the plan focuses on achieving compliance with the primary residence requirement. To address this issue, EXL has begun requiring certain documentation to be uploaded upon application and renewal and borrowing the definition of person from the zoning code. EXL is currently researching other cities ordinances and considering a limit on the number of days an STR may be rented. 3

4 5. Finalizing Insurance limits and rules o Cindy Sestrich asked if it would be possible for Brian to send out a list of STR applicants to the RNOs to verify primary residence. Brian stated that it wouldn t necessarily be conducive with the timing of a license being issued. o Molly mentioned that EXL is hoping to put information on our website that people can refer to that would achieve the same goal. Buffy thought it might make sense to get RNO s to participate informally. The fourth area of the plan addresses how to deal with bad operators. EXL has begun referring complaints to the appropriate partner agencies and is in the process of promulgating rules to protect the health, safety, and welfare of the community. EXL is exploring the option of occupancy limits and the creation of a complaint portal. o George Mayl asked if citizens still have the right to file a cease and desist order against a licensee who has collected a number of complaints? If so, and if a cease-and-desist order is issued, is that non-compliant person still allowed to continue renting out their property? Brian said he would check with the Neighborhood Prosecution Team, but that the issue is that citations are not often issued. o George also asked how much the City has collected in fines from bad operators and where this money goes. He thinks that licensing fees and taxes taken in from STRs should go to neighborhood inspection services to help alleviate those neighborhood issues, rather than into the general fund. Molly stated that the City has only taken in a nominal amount from fees but a more substantial amount from taxes; Councilman Flynn noted that neighborhood inspection services are funded through the general fund. o Buffy stated that she hoped any rules or standards for revocation could be tied to what was already in place, rather than a different set of standards for STR hosts than what applies to regular citizens. The group discussed the issue of the primary resident not being present during the rental, and the current process for revocation of an STR licenses. Brian and Molly reiterated the point that if an actual citation is issued for bad behavior, it is much easier to revoke or discipline a license. Additional standards would allow the Department to revoke for provable offenses where a citation was not issued. Molly presented the group with some draft language regarding insurance requirements that would be adopted in rule. EXL has looked at several options and Molly noted that the STRAC 4

5 6. Proposed property tax bill at the state level came to a consensus on the one-million-dollar limit. She proposed moving forward with this draft proposal and scheduling the public hearing for the November STRAC meeting. One of the members who called in asked for language clarifying whether coverage provided by a platform would fulfil the insurance requirement. Cindy echoed these concerns, stating that the coverage a hosting platform provides would not be the same as the coverage in a homeowner s policy. Molly noted that we can look into this and make explicit what is required. Cindy stated her concerns with where liability falls in a large condo building, where a particular condo-owner is running an STR but has not notified the HOA. She was concerned that if the HOA s insurance carrier does not know about the STR, it could deny claims filed by the HOA that arise out of the operation of the STR. Cindy suggested adopting an insurance rule requiring applicants to prove that they have contacted their HOA or neighbors in a multi-family structure. Molly stated that EXL will research this more and take public feedback at the hearing. The group agreed that the November meeting could be used for the public hearing on STR rules regarding insurance. Notice and draft rules will be posted and the public will have opportunity to make formal written or spoken comments. There is an interim legislative committee at the state level looking to make changes to the Gallagher amendment and the option of treating STRs as commercial, rather than residential, property. One member asked if such a change would automatically classify those properties as commercial properties for zoning purposes. Cindy mentioned that she had read about this, and that it was being considered by resort communities as a way to collect more money for affordable housing in those areas. Molly noted that any changes enacted would be in effect at the state level. Molly stated that EXL will stay up to date on any STR proposals that will be considered by the state legislature and send out links to bill drafts that become available. 7. Public Comment Bridget Brophy stated that STRs have had a negative impact on the residential block where she has lived for 23 years. She would like to see a limit on the number of days a home can be rented out because without a limit, they can essentially be run as a business. She would also like to see a requirement that the owner be onsite. She said it is unfair that adjacent neighbors have to 5

6 spend money and resources to protect their properties from STR guests while the owner of the property incurs no additional costs. Specifically, she asked for the following requirements: o A 60-day limit on the number of days that a property can be rented out; o Any smoking must be inside; o Parking only in front of the STR property; o Privacy fencing and enhanced security; and o Zoning restrictions. Jack Walker, president of a residential condo association on Larimer Street, discussed the problems associated with STR guests who treat the properties as a flop house or frat house. He stated that most of the issues in his building come from STR guests, and include problems like noise, debris being thrown off of balconies, and broken smoke detectors. They are requiring hosts to meet their STR guests in person, which he thinks will cut down on problems. He also suggested a limit on the number of days a property could be rented and tougher enforcement of the primary residency requirement. Michael Murphy reiterated some of the concerns already addressed. He also advocated for a defined period that a host would have to live at a property before it can be rented. Thayer Hirsch stated though Brian has been very helpful, his entire neighborhood in the Highlands has changed and he has seen a dramatic increase in STRs. He stated that he can t sleep with the windows open anymore, that his children have trouble sleeping, and that he and his family have been bothered by marijuana smoke and urine on the sidewalks from STR guests. He would like to see EXL and Brian have more resources to enforce the rules. Eric Lowe expressed concerns with the compliance rate. He echoed the request for a limit on the number of days a property may be used as an STR. o Brian responded regarding the compliance rate, stating that the department has issued over 400 NOVs to get places into compliance, but the missing piece is the help from STR hosting platforms to require a license number in order to publish. o Cindy asked Brian if there is anything citizens can do to help with enforcement. He said keep calling and documenting problems he reads every complaint submitted. Sabrina Zunker asked Kemi what AirBNB does when a person complains. Kemi responded that they have a neighborhood tool on the website where a member of the public can submit a complaint. AirBNB does track complaints, and their customer service team will escalate a 6

7 complaint if a particular property has more than three. She will share the link with the committee. Sabrina asked if a property is ever removed for receiving too many complaints. Kemi said yes, but she is not sure how often. Sabrina asked if a customer could see information about complaints when booking, and Kemi said no. Carrie asked if we can link to the complaint portal for hosting sites on the Denver website. Taylor Hills asked how Denver sorts through complaints to make sure they are legitimate, and what is to stop someone from calling into complain. There was a discussion regarding what type of evidence would be necessary at a hearing to prove a violation of the primary residence requirement. Sabrina outlined the importance of protecting all parties in making sure that our primary residence rule is fair. Erin asked about violations regarding smoking in back yards. Molly informed the committee that this was discussed at length when the city developed marijuana regulations, and that nuisance complaints about odor are referred to the Neighborhood Prosecution Team, who engages in mediation between neighbors to come to an agreement on schedules for certain activities. Molly closed the public comment portion of the meeting and invited people to stick around if they had further questions. 8. Next Meeting The next meeting will be on November 27, 2018 at 4:00 p.m. The main agenda item will be a public hearing on the insurance limit rules and any other proposed STR rules. If time remains after the public comment portion of the hearing, EXL will provide licensing and enforcement updates. 7