Auditor: Denver doesn’t know if short-term rentals are hurting neighborhoods and affordable housing

Identifying how short term-rentals hurt or benefit neighborhoods and affordable housing was one of the goals City Council outlined in 2016.

A home in Kansas City, Missouri listed on Airbnb by John Legend and Chrissy Teigen. (Courtesy of Airbnb)
A home in Kansas City, Missouri listed on Airbnb by John Legend and Chrissy Teigen. (Courtesy of Airbnb)
A home in Kansas City, Missouri, listed on Airbnb by John Legend and Chrissy Teigen. (Courtesy of Airbnb)

The Denver Auditor’s Office knows that the nearly 2,000 short-term rental business licenses issued from January through August brought in about $49,000 to the city’s coffers.

What the city watchdog department is less sure about is how those licensees are impacting Denver’s 78 neighborhoods and the cost of housing.

Identifying how short-term rentals hurt or benefit neighborhoods and affordable housing was one of the goals City Council outlined in 2016 for why the people listing homes on sites like Airbnb and VRBO need to get a  license. But the Department of Excise and Licenses lacks an approach for tracking and analyzing data, according to the audit released Dec. 21.

Between January the end of August, Denver 311 received almost 1,100 inquiries related to short-term rentals. Roughly 70 percent of the calls and written correspondence involved complaints and possible violations of the ordinance, according to the audit.

Opponents to short-term rentals complain nationwide their property values are in jeopardy when their neighbors rent to vacationers and travelers. Others say those visitors are taking space that could be rented further limiting the home supply for residents and driving up costs.

The Short Term Rental Advocacy Center and proponents rebuff criticism by saying the rentals “are such a small fraction of the total residential housing inventory in a given market” and that some landlords are fixing up dilapidated properties to rent out on short-term bases.

“A central goal in the ordinance is to determine the impact on neighborhoods and affordable housing, and some agency needs to be working on it throughout the process,” Auditor Tim O’Brien said in a statement. “If the Department of Excise and Licenses does not track and analyze the data, officials should work with City Council to determine who is responsible.”

A snapshot of different regulated short-term rental markets in the United States as of December.(Courtesy of Denver Excise and Licenses)
A snapshot of different regulated short-term rental markets in the United States as of December.(Courtesy of Denver Excise and Licenses)

The executive director of the Excise and Licences, Ashley Kilroy, said her team has created a strong base of short-term rental hosts from which to collect data.

“We are tracking the data,” Kilroy told the Independent Audit Committee this month. “Short-term rentals are about 1 percent of the overall housing stock in our city. We as a business licensing department don’t have the expertise to analyze how that one number might affect affordable housing when there is a myriad of factors… ”

“I would feel we were being irresponsible if we tried to draw any conclusions from what we saw from short-term rental data on affordable housing,” Kilroy added.

Kilroy said she’s been in discussions with Councilwoman Mary Beth Susman, the Office of Housing and Opportunities for People Everywhere (HOPE), Office of Economic Development, and Denver Department of Finance to provide the analysis. It’s unclear if City Council will take action to officially make one of these organizations responsible for providing a report on how short-term rentals impact neighborhoods.

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Business & data reporter Adrian D. Garcia can be reached via email at agarcia@denverite.com or twitter.com/adriandgarcia.

Adrian D. Garcia

Author: Adrian D. Garcia

Adrian D. Garcia is on business and trends for Denverite, serves as treasurer for the Colorado chapter of the Society of Professional Journalists and on the board of the Denver Press Club. He can be reached at agarcia@denverite.com.