Basalt Town Council voted 4-3 to impose a $2,532 per-bedroom fee on its short-term rental license-holders.
The Tuesday night vote ended a months-long debate over mitigating the impact of STRs on housing in Basalt versus protecting some local homeowners’ income stream. The decision could face a legal challenge from some license-holders.
Owners and non-owner occupants who use the property as their primary residence and rent the space as an STR for 60 days or less annually will be exempt from the fee. It will take effect in 2026 as the town issues STR licenses in the beginning of the calendar year.
As of May 1, the town has 39 active STR licenses, with seven licenses still under review. The fee is expected to bring in about $100,000 annually, which the town will use for affordable housing initiatives.
Councilors Dieter Schindler, Angela Anderson and Hannah Berman voted with Mayor David Knight to approve the STR fee ordinance as written. Anderson said that by her count, only 19 STR operators gave public comments criticizing the fee. Given that Basalt has more than 4,000 residents, she said any concession to such few people would amount to special-interest-group politics.
“I consider the noise made by this group in opposition to this fee to be a good thing,” Anderson said. “It tells me that it will give a homeowner pause before they decide to utilize their residential property as a commercial business, because absorbing the financial burden that has thus far been absorbed by the community is too high of a price for them to pay.”
At the April 8 meeting, Schindler indicated that he supported a fee but felt the $2,532 could be too high. On Tuesday night, however, he supported 50% of the proposed fee.
“The movement here needs to be bold and so I think I’m in favor of this ordinance as it’s written,” he said.
The fee itself is a product of a STR Regulatory Fee Study from Denver-based Economic and Planning Systems. The study analyzed the nexus between the economic impact of STRs and housing costs. It recommended the levying of an annual fee for $5,064 per bedroom to defray the impact of STRs on housing affordability for employees generated by those rentals.
The study came under fire by some critics for its use of Aspen Chamber Resort Association visitor spending and other data they said cannot be applied to Basalt.
At the recommendation of the Basalt Affordable Community Housing group, the fee was cut by 50% to the $2,532 amount.
Councilors Angèle Dupré-Butchart, Rick Stevens and Ryan Slack voted down the ordinance, saying the fee is too high for local homeowners. They instead voiced support for an increase in the town’s lodging tax, which is currently 4% and applies to STRs and hotels. The state Taxpayer’s Bill or Rights, more commonly known as TABOR, requires voter approval for a new tax or tax increase.
“If this ordinance harms even one current longtime local homeowner and forces them to be in a financially precarious position where they have to consider selling their home, then, as it is drafted, I cannot support it,” Dupré-Butchart said. “That I’m aware of, we don’t have large-scale, institutional-scale size investment in our community where multiple homes are being bought by business enterprises in order to run them like many hotels.”
Stevens worried about legal risk, as some residents and STR license-holders hired an attorney to submit public comment on their behalf through a letter that alleged the fee would be found unlawful in courts.
“If we enter into litigation because of this process being flawed in some way or another, which I think it could be, then everybody pays. And these things are protracted,” he said. “At the end of the day, what’s it worth?”
The attorney, Jordan May of Boulder-based law firm Frascona, Joiner, Goodman and Greenstein PC, said on Monday there is interest in filing a lawsuit. He did not respond to a request for comment following Tuesday’s vote.
Town Attorney Jeff Conklin previously told the Aspen Daily News the town believes the law supports the ordinance. At Tuesday’s meeting, he said the nexus study from EPS is key.
“It establishes what the costs are that we are attempting to offset. In the letter that you received and those in your packet, there’s a reference to one case related to fees out of Pagosa Springs,” he said. “They ultimately lost in court because they didn’t have a study. There was not a nexus between what the fee that was proposed and adopted and the cost that it was proposing to offset.”
During public comment, former Councilor Auden Schendler urged the council to adopt the ordinance as written.
“There are a lot of different ways to argue it, but I think that in its essence, there are impacts to short-term rentals,” he said. “They increase the price of property. They increase the price of rentals. They change the character of neighborhoods. Houses become more like hotels.”
Michael Schoepe said the STR license he holds is a crucial piece of affording life in the Roaring Fork Valley, despite living in a dual-income household and having housemates. He criticized the fee for applying to smaller, less expensive properties the same as higher-dollar STRs.
“The Airbnb allows us to live here and to pay our mortgage every month, and it allows us to collaborate and support local arts organizations for concerts, performances, summer camps and all those things,” he said. “I feel that is a punishment and it is a punishment that very unequally punishes houses that are not rich.”
Homeowner Jess Portmess has an STR license for a unit in the detached garage on her property. She said the revenue from it is crucial for her family but long-term renting is not an option because visiting family members use the unit.
“What we would do, very likely — what has been mentioned today and suggested previously — is we would convert our STR to a longer-term rental, rent it for over 30 days to short-term Aspen SkiCo employees or traveling nurses,” she said. “Which, as I understand, would mean that we don’t have to get an STR license, and we don’t pay the STR lodging fee. So that’s our reality.”
The council received legal counsel from Conklin during an executive session for about 20 minutes at the beginning of Tuesday’s meeting. Executive sessions are closed to the public.
