This week, Basalt Town Council convened for a very busy night, unable to come to a conclusion on a possible regulatory fee which would cost short-term rental (STR) owners $2,532 per bedroom per year on their rental properties.
For background, the Town of Basalt currently only requires STR owners to pay for a sales tax license, short term business license and inspection, totaling $460 annually. The Town of Basalt also charges a 4% lodging tax on both the leasing and renting of rooms.
On Feb. 11, Ordinance No. 3, series of 2025 was first brought to Basalt Town Council. This ordinance would amend Town Code to include a new regulatory fee of $2,532 per bedroom on STR properties.
The $2,532 per bedroom per year cost was determined using data taken from a report created by financial consultant Economic & Planning Systems, Inc (EPS). The Town of Basalt contracted EPS to conduct an analysis on the effects of STRs on affordable housing demands, weighing the relationship between how guests spend while renting and the number of local employees and households supported by that spending. The $2,532 fee is 50% of the maximum fee that could be charged according to the EPS report.
In addition, the amendment would contain language allowing for the exemption of this fee specifically for STR owners who demonstrate to the town manager that the STR property is the owner’s primary residence, and the STR is not being rented out for more than 60 days of the year.
Basalt staff contact for the citizen committee Basalt Affordable Community Housing group (BACH) Michelle Thibeault introduced the ordinance during this week’s meeting. BACH, which regularly provides recommendations to the Town Council on any project or legislation regarding affordable housing, recommended the $2,532 value as well as the exemption for residents.
According to Thibeault, a nominal part of this fee is to provide revenue for affordable housing projects in Basalt. Additionally, the regulatory fee is also being considered such that Basalt does not remain, according to Thibeault, “one of the only communities in the Valley to not have an STR fee that is appropriate for the current market conditions.”
Brian Duffy of EPS also joined the meeting via Zoom to address criticisms of the STR fee analysis report. Since Feb. 11, citizens have declared the EPS report contains calculation errors and bases its fee study on guest spending data contained in an economic impact report prepared for the Aspen Chamber Resort Association. Citizens argued that data for Aspen visitors does not accurately reflect Basalt visitors.
Duffy acknowledged that tables in the report show calculation errors. However, he stated that while they display incorrect values, the correct values were used to calculate the final estimate. In addition, Duffy explained that EPS assumed Aspen guest spending habits were comparable to those of Basalt guests, both because Breckenridge had a similar spending figure and because Basalt’s market is “considerably more expensive than statewide average markets.” In the meantime, the Basalt Chamber of Commerce has requested spending data specific to Basalt and the Midvalley from the Colorado Tourism Office but has yet to receive it.
About two dozen Basalt residents filled Town Hall and offered their comments on the potential fee. Many criticized the inconsistent impact a flat per-bedroom fee would have on lower-cost rentals, and others argued that STRs are what allow them to remain residents in the Valley and such a fee would endanger their livelihood. Others argued in letters that the fee exemption for residents could result in a lawsuit for discriminating against out-of-state owners.
For two hours, Town Council discussed the potential merits and flaws of this new fee, agreeing that it would be, in the words of Councilor Dieter Schindler, “another tool in the toolbox” for addressing affordable housing, and should be weighed with and against other strategies for the same purpose.
Council was unable to come to an agreement on the amount of the fee, and some councilors desired more information on other affordable housing strategies. Except Mayor David Knight, who wished to approve the ordinance as is, Town Council voted to table the ordinance for a public hearing on April 22.