An update on Denver's Airbnb law & enforcement

[James Carlson]

 I continue to sit in on Denver's Short-Term Rental Advisory Committee meetings. (Because I'm just that cool.) 

Thought I'd share what came up for any of you out there who are interested in Denver and Airbnb. What I found most interesting is that the city's Excise & License department has no plans to address instances where a husband and wife go through the process of putting their identifying documents under different addresses to get around the primary residence rule. (READ: Creative workaround for investors??)

Here are some other items I noted.

• 35% of STR hosts are licensed, a pretty damn good compliance rate compared to other cities with similar ordinances
• The Excise and Licenses department recently issued 1,000 notice of violation letters to those who had NOT obtained a license. Those hosts have 14 days to comply or else the fine structure kicks in ($150 for first fine, $500 for second, $999 for third and subsequent violations).
• Maybe most interesting to me was a discussion about enforcement of the primary residence rule. As background, Denver's law allows Airbnb or short-term rentals -- that is, fewer than 30 days --- only in your primary residence. The ordinance says that if E&L suspects a host is in violation of the PR requirement, the host will have to provide two of a long list of documents -- driver's license, voter registration card, utility bills etc. -- that show the listing's address is the primary home. 
  • E&L is currently conducting primary residence audits only based on complaints. After this initial enforcement period, E&L will conduct proactive and random PR audits.
  • Of the 18 listings so far subjected to a PR audit, all have provided sufficient evidence to prove primary residence.
  • When a committee member asked what E&L could do to stop a husband and wife from putting one home in one spouse's name and another home in the other spouse's name, the E&L guy basically shrugged. This might be of interest to investors looking for a creative workaround.