AURORA | City officials have agreed to allow residents to rent out their homes as vacation rentals using services like Air BnB, but hosts of the increasingly popular short-term rentals must obtain business licenses and pay municipal lodger’s tax, ending a months-long logistical quagmire.
The policy is not final. It’s unclear who would have to comply, and there are no details about how the proposal would be implemented. Still, the first permit has been issued.
On Friday, Nov. 6, the city issued its first vacation rental business license to Saurabh Chawla, an active Airbnb host who was barred from renting out his home on East Dry Creek Place in April after a neighbor complained about the amount of people frequently coming in and out of his east Aurora home.
“It was a long road, but I’m glad we got to this point,” Chawla said. “I’m glad that (the city) made this a priority over the past seven months — they did a pretty good job and they listened.”
A city council committee has given tentative approval to the issue, but it’s unclear whether implementing the permit and tax program requires formal city council approval.
The decision means that all vacation rental hosts with an Aurora address will have to apply for a $38 Aurora business license and collect an 8-percent lodger’s tax from each guest they host, according to Trevor Vaughn, manger of the city’s tax and licensing division. The business licenses must be renewed every two years for a $25 fee.
“It’s going to be an allowed home occupation,” Vaughn said.
He added that people who rent out all or a portion of their home to travelers may still be subject to a separate, state lodger’s tax of 4.25 percent.
Had the city not elected to pursue the current plan, Chawla and his wife, Neha, would have had to pay upward of $4,000 for a conditional use permit and attend a public hearing to receive the approval of all residents and Homeowners Associations within one mile of their home.
The Chawla’s re-listed their house on Airbnb early Friday, and Saurabh said that he plans on charging guests $45 per night. That price includes the now-mandatory lodger’s tax, which he will remit to the city on his own — not through the Airbnb website.
Vaughn said that the city has continuously pursued negotiations with sites like Airbnb to get them to agree to charging the required taxes at the point of sale instead of having individual hosts remit the city fees themselves on a monthly or quarterly basis.
“At this point, we are looking for more cooperation form the website providers in collecting and remitting the tax,” he said. “That’s something that we’ve been in touch with Airbnb about, but they haven’t cooperated yet. But I think that would be easier for all parties involved.”
Saurabh said that he’s proud of Aurora’s decision to allow vacation rentals by owners in the city, although he’s not certain how cozy other area Airbnb hosts will be to the notion of having to apply for a business license and charge guests an additional fee.
“Other hosts may not be too happy, but at least it will be an even playing field at that point,” he said.
There were about 40 Airbnb hosts serving Aurora visitors as of July, according to anecdotal data collected by the tax and licensing division. That’s a number nearly 10 times what it was early last year.
Prior to being shut down this spring, the Chawlas had hosted about 55 guests in their Aurora home, according to Saurabh. He said that the majority of their visitors were people looking to stay close to Denver International Airport, students in town to interview at the University of Colorado Anschutz Medical Campus, and younger professionals flying in for job interviews at in Downtown Denver.
Saurabh said that barring any loud or cantankerous behavior, city officials have told him that any future grievances from the next-door neighbor who lodged the initial complaint will be ignored.
“In regard to who’s coming in and out of our driveway, that’s not really that person’s concern,” he said. “We’ve been told that if they do complain it will be ignored unless something crazy happens with loud noise, music or a party. But just with people coming in and out, we’re free to do it.”
Despite Aurora’s new plan regarding Airbnb, a slew of other cities around the state and the country are still wrestling with how to regulate the ballooning sharing economy. Following a months-long moratorium on the practice, Boulder voters approved a 7.5 percent tax on short-term rentals in the city earlier this week. In the metro area, the Denver City Council is in the process of considering its own regulations on Airbnb and other vacation rentals by owner there.
Enterprising homeowners have every right to host guests in their homes, even for hire. I hope Airbnb is a wake up call to the hospitality industry.
Joe, here’s one place where we agree. We just got back from France where we spent a month and had an Airbnb apartment that was wonderful and wonderfully located. The price was fair and extremely reasonable, and our host was incredibly nice.
This is great news! Homeowners should take advantage of extra space they have or investment properties they own. Effortless Rental Group helps setup and optimize your property to make the most money! it’s easy and the return on investment is incredible! visit our website for more information http://www.EffortlessRentalGroup.com We are a local based business here to take all the hard work out of having a vacation rental.
Every other Colorado city that has applied a lodging tax to STRs obtained voter approval under TABOR. Aurora may need to refund all that it collects now. Aurora should have followed Boulder’s lead and left legalization of STRs up to Aurora voters. Residential property owners should have a say in protecting their property rights to live in a non-commercialized zone and not near pseudo-hotels.
Who care about other hosts. It’s the neighbors who now have been sold out by their greedy city for a few bucks. Neighbors don’t want out of town strangers lurking around their homes. They bought their property with the understanding the area was zoned Residential !!!
Welcome to the new economic paradigm called the ‘ownership’ society where folks are encouraged to enter into self employment or sole proprietorship as a counter to ever increasing tax burdens. The city just wants a share of the economic activity to keep their bureaucrats well fed.
Exactly.
Naturally, if there’s an enterprise involving private property and private money, the city – indeed any government – will get its tax tentacles into it. The Taxman cannot stomach the fact that all money does not belong to him.
First, the new city ordinance supporting motels in the middle of residential neighborhoods
is apparent the Aurora city council now considers the practice of rulemaking an inconvenient but a useful opportunity.
However, the conflict between the city allowing the new overnight crowd under the auspices of
a $38 business license plus a little cut of the action thus seems to put out of
sight the obvious problem. Despite the consequences of this, the message is clear.
For that reason, if all it takes for the city to support notions such as this, then the consistent thinking to justify this rule and not discriminate, the local street Panhandlers should also follow this rule. Is there a problem with the same $38 deal to do business in the city plus a little more skin, think again?
Now watch that happen and you will see the City Council manufacture reasons to reverse their expedient earlier thinking.
I have a feeling a very mad attorney out there somewhere will file a suit. You see, if a home buyer purchases a home zoned R-1, and now it is the equivalent of down-zoned to commercial or multi-family without due process. Hmmmm. that could turn into a test case I’m betting.
Before the city feels that they accomplished something, wait and see how many of those 40 rentals actually apply for that license. In other cities, about 10% of the rentals come forward. And you can’t find them without a complaint or a lot of investigation as Airbnb’s system keeps them anonymous. Best of luck Aurora.