DENVER — An analysis that compared the number of short-term rentals in the city to the housing supply concludes short-term rentals have very little impact on the cost of housing.
The report was generated in April and was recently obtained by 9Wants to Know as it looked into how the city has been trying to regulate the short-term rental industry.
A 9Wants to Know investigation found entities that appear to be businesses were issued short-term rental permits when they should go to actual people in their primary residence. The city said the compliance system now requires names on permits to match names on driver’s licenses. In some situations, a business may own a property but give someone living there permission to legally run a short-term rental, the city said.
The report by the Economic Development department said short-term rentals make up only 1% of the housing supply in the city, which is 306,714 home units.
“Short term rentals in Denver do not appear to have an impact on housing costs at the citywide level. A geographic concentration of short-term rentals is moderately positively correlated with increased home values, but not increased rents,” Analyst Katherine O’Connor wrote in the report.
Denver’s Department of Excise and Licenses, which issues short-term rental permits, said the “primary residence” rule has helped reduce the impact of short-term rentals on the housing market.
“It does not allow people to buy up additional units, a bungalow next door or a condo across town. It doesn’t allow companies to come in and buy multiple units and start short-term renting them,” Ashley Kilroy, executive director of the Excise and Licenses department, said of the rule.
The city began enforcing its primary residence rule in 2017, prompting 267 people to either withdraw their permit applications or surrender their licenses as of Sept. 5.
The city claims 75% of the short-term rental ads online are in compliance with the law, the highest compliance rate in the country, city officials said.
The economic development report also credits the primary residence rule for helping reduce impact.
“This prevents investors from purchasing housing that would otherwise be used for normal, long term residential purposes, thereby decreasing the housing supply and inflating prices,” O’Connor wrote in her report.
9Wants to Know also compared a list of properties from 2015 that were used for Section 8 housing to properties currently used for short-term rentals. No properties from the 2015 list are being used for licensed short-term rentals.
Lisa Calderon, chief of staff for Councilwoman Candi CdeBaca, believes short term rentals still impact neighborhoods on a deeper level and can accelerate gentrification in neighborhoods.
“We have an affordable housing crisis in Denver and the fact that they’re used to be working class families living here, I would love to see a return to that,” Calderon said of the home next to her house.
A home at 3420 Marion St. was featured in 9Wants to Know’s report on Sunday, which revealed it was owned by a real estate agent who ran it as a full-time short-term rental. The agent gave up his short-term rental license after Calderon complained, prompting city investigators to see if the agent lived at the property, as required by law.
9Wants to Know found the home is owned by "Marion House, LLC."
“We know that there are students who need housing, and this would be a great student living place. But ultimately, we need more housing options. I’d love to see this landlord be in tune to that and it reverts back to an affordable housing property,” Calderon said.
“This report confirms what we’ve long maintained: short-term rentals are not impacting housing prices in Denver. Meanwhile, Airbnb helps Denver families earn extra money to offset rising housing costs and infuses visitor spending to neighborhoods that haven't typically benefited from tourism,” an Airbnb spokesperson said. We remain committed to working with the City to ensure Denver receives the full economic benefits of short-term rentals."
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