AIRbnb tax: Ski towns plan to lobby for tax on vacant, short-term rental homes

(The Center Square) – A group of 28 Colorado resort towns wants the General Assembly to authorize local governments to assess higher taxes on homes sitting vacant or used for short-term rental most of the year.

The Colorado Association of Ski Towns plans to lobby legislators to pass a law allowing municipalities to charge a local vacancy tax. The tax revenue would “incentivize renting those vacant homes to the local workforce,” according to a position paper from the organization. Only workforce and affordable housing would be funded by the tax revenue.

“CAST supports legislation to allow cities, towns and counties to pass taxes on empty homes, with approval of their voters, in order to fund much-needed housing,” Margaret Bowes, executive director of the Colorado Association of Ski Towns, wrote in an email to The Center Square. “Many of our local communities with severe housing shortages have an even greater number of homes that sit vacant most of the time.”

The organization said a significant gap exists between the available housing inventory and the demand for affordable housing and for the workforce. It stated an increase in the inventory of vacant homes is especially prevalent in mountain towns as approximately 40% of homes can be categorized as vacant.

“At the same time, these communities tend to be short on developable land and unable to build their way out of the imbalance,” according to the position paper.

“This kind of tax is not for every community,” Bowes wrote. “But for some of our communities, an empty homes tax will encourage renting homes to locals and will raise money for local housing efforts.”

Homes with no one living in them and homes occupied only by people who have a usual residence elsewhere are defined as vacant, according to the U.S. Census Bureau. Second homes and short-term rentals are included in the definition of vacant homes.

In 2010, Washington, D.C., created a property tax rate for vacant commercial and residential properties and a separate rate for blighted properties. The vacant property is taxed at $5 per $100 of assessed value.

In 2018, 70% voters in Oakland, Calif., approved a vacant property tax. Homes in use less than 50 days a year will be subject to a flat tax of $6,000. The tax revenue is used for homeless programs and services, affordable housing, code enforcement, dealing with blighted properties and illegal dumping. Oakland’s annual tax will sunset in 2038

“CAST is just beginning its work reaching out to potential partners and other stakeholders to explore the details of the proposed legislation,” Bowes wrote.