Summit County homeowners sue to overturn short-term rental rules
A group of 101 Summit County homeowners are suing to overturn regulations on short-term rental homes approved this year, saying county commissioners’ “blunderbuss response” to vacation rental homes has created “successively more severe, wide-ranging, misguided and unlawful regulations.”
The lawsuit filed in U.S. District Court by the homeowners said the Summit County commissioners’ “justifications for its excessive STR regulations, including that STRs deprive the County of local workforce housing, are fabricated and seek to involuntarily enlist private homeowners to solve the county’s failure to adequately address the workforce housing shortage.”
“Who says you have a right to live where you work?” said Todd Ruelle, a Virginia resident who has rented a home he bought in Summit County near Breckenridge since 1990 and is spearheading the lawsuit. “You live where you can afford to live. I wish I could live in a penthouse in New York City. Does that mean I’m entitled to a penthouse because I work there?”
Summit County, and just about every other mountain community in Colorado, has imposed new, strict regulations and caps on short-term rentals since the pandemic. As hordes of new residents — many fleeing pandemic challenges in urban communities — flooded mountain towns, home prices reached all-time highs. A labor crisis followed and community leaders cracked down on the growing wave of short-term rental homes in the hope of keeping more homes in mountain valleys available for long-term rental by local workers.
The new regulations follow several years of increased permitting and requirements for short-term rentals that required homeowners to follow rules around noise, trash and tax collections. Following the pandemic, regulations have capped and increased taxes for short-term rental properties.
Summit County’s commissioners rezoned areas to identify neighborhoods where renting to vacationers should be restricted while focusing vacation rentals in zones closer to ski areas and resort-town downtowns. The Summit County commissioners in fall 2021 imposed a limit of 135 rental nights for owners of homes in neighborhood zones. A month later they added more stringent regulations. In 2022 the commissioners imposed a moratorium on new short-term rental licenses and earlier this year adopted caps on licenses that are below the number of existing permits in several areas of the county. The latest regulations limit rentals to 35 nights for nonresident owners in neighborhood zones.
The lawsuit details situations involving homeowners who are unable to rent to vacationers and are renting their homes to locals. One owner “will be forced to sell” unless he can rent on the short-term market. Another couple “will need to liquidate other assets or use their retirement savings” to pay the mortgage after losing their short-term rental license.
Last year Airbnb released a study that showed home-renting vacationers spending $1 billion a year in Eagle, Grand, Pitkin, Routt and Summit counties and supporting 14,700 jobs. The report suggested that the lack of workforce housing in Colorado’s mountain towns was not connected to increased numbers of short-term rentals, pointing to the price of homes and rental costs that were out of reach for local workers.
A group of 15 commissioners from seven mountain counties blasted the report, saying Airbnb “narrowly focused” on select facts and it was “misleading to claim there is no relationship” between short-term rentals and workforce housing. Summit County Commissioner Tamara Pogue said the intent of the report was “to further support a multimillion-dollar industry.”
Pogue was unable to comment on the specifics of the lawsuit but said in an email that her county’s short-term rental rules were created with “a thorough and thoughtful regulatory approach that included a tremendous amount of input from all sides.”
She said work with homeowners, short-term rental industry representatives and locals struck a balance between those who wanted to end all vacation rentals and those who wanted zero regulation.
“I believe the regulations are fair and reasonable and protect the interests of the community as a whole,” Pogue said. “Our actions are reflective of the efforts made by communities across Colorado and the nation. We are all attempting to address the valid concerns of our citizens, neighborhoods, and industry participants in this dynamic, ever-evolving aspect of our economy — especially in highly desirable resort communities.”
There are 101 members in the newly formed Summit County Resort Homes Inc., a nonprofit that formed to fight the Summit County short-term regulations.
“And we are adding new members every day,” Ruelle said.
A group of homeowners in Breckenridge — calling themselves Colorado Property Owners for Property Rights — also formed recently to fight short-term regulations in that Summit County resort town.
Homeowners have attended many meetings in the past few years, but are limited to only a few minutes of public comments. The lawsuit filed this week seeks to overturn the Summit County regulations and force the county to pay for the group’s legal fees.
Ruelle said the group is gathering data — including lodging tax revenue reports — that will show the regulations slowing the region’s tourist-based economy.
“They don’t use data,” he said, describing a meeting where a county commissioner said the 35-night cap “feels good.” “They pull these numbers out of their back end and try to sell the public that it’s the truth.”
Ruelle bought his home near Peak 7 in 1980 for $80,000. He was 23 and making $18,000 a year. He paid 17% interest on the loan and started renting to visitors through a management company in 1990 to help pay down his mortgage.
“If you work in a resort community you try to figure out how to buy a home through hard work, creativity and entrepreneurship so you can get yourself a place to live,” Ruelle said. “We want to make Summit County ground zero for this fight and make it a focal point for the nation. Many of these resorts started when there was no place to stay except people’s homes and owners rented to visiting skiers. We helped start these economies and we continue to drive local economies.”