Aspen voters will decide in November whether guests of vacation rental properties will face a new tax of either 5% or 10%.

The Aspen City Council unanimously approved the ballot language at a special work session Monday, after making their own adjustments to the question, for a tax on rental units lasting within 30 days.

“I think that this is a proposal our community was asking to see. They want an opportunity to vote on this,” said Mayor Torre. “I think we’re doing our job by returning this to the community.”

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The question will ask voters to decide on a proposed tax rate of 5% for both condo-hotels and rental properties that are owner occupied. The same question will ask for a 10% tax rate for guests of homes that aren’t full-time residences and homes used for investment purposes.

The City Council has been wrestling with the impact of short-term rentals, commonly called STRs, over the past few years as the industry has boomed in Aspen and elsewhere. In July the city commissioned a survey to check the public appetite for a tax on STRs. Nearly two thirds of Aspen voters surveyed said they would support a tax on STRs.

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The proposed tax is the council’s latest effort to better regulate the industry, which council members say has taken away residential housing for people wanting to live and work in Aspen full time. STRs also have changed the fabric of residential neighborhoods and strained services, critics have said.

Opponents of an STR tax have argued it will deter visitors and hurts an industry that provides vacation opportunities for people who might not afford to stay in an Aspen hotel or lodge. Local residents also rent out their homes to make ends meet, and a new tax could harm their income potential, those against the tax have said.

The council agreed that a minimum of 70% of the tax revenue would go to the city’s housing program, and they would have flexibility to use the remaining 30% on environmental efforts and infrastructural improvements.

If approved, the tax would take effect May 1. City officials estimate the tax would bring in $9.14 million in its first full year of implementation.

Councilman Ward Hauenstein said he didn’t support taxing condo-lodges because of their contributions to the Aspen community over the decades. But the three others in attendance — John Doyle, Rachel Richards and Torre — said the condo-hotels should be included. Councilman Skippy Mesirow did not attend the meeting,.

“This is the part of the cost of doing business here,” said Councilwoman Rachel Richards. “It’s part of maintaining the benefits and the attraction and the things that generate the high demand from our guests and from guests across the world to come here. I think we have an obligation to keep both our community and these amenities.”

Doyle added that all STR properties have to do their part to offset their impacts.

“I do agree that our condo-hotels that have been in operation for years and have provided a necessary bed base for our tourists who come here to enjoy what we have to offer — a lived-in community, a place that has excellent infrastructure that they’ve come to expect at other high-end resorts,” he said. “And some of these hotels do house a portion of their workers, but currently they’re not contributing as much to the current shortfall in housing and the current shortfall in infrastructure that’s necessary and the environmental issues this tax is trying to address.”

City Council in October 2020 adopted legislation requiring owners of STR properties to have a business license and a vacation rental permit filed with the city. The business licenses require the property owners to pay the city’s 2% lodging and 2.4% sales taxes. A City Council moratorium placed in December on new STR license applications expires Sept. 30.

rcarroll@aspentimes.com