Many homeowners are seeking vacation rental permits in historic Durango, so the city plans to create a wait list.
The need became clear when a permit-holder sold a home on East Fifth Street, and competition for that vacation rental permit in an otherwise maxed-out zone created confusion. Durango City Council may settle a dispute with a coin toss.
The city caps the number of vacation rentals allowed in certain areas, and no permits were available in the neighborhood east of East Third Avenue and north of First Street until recently, when a home sold and the buyers of the home were competing with others for the permit.
“There really wasn’t a process that anticipated an obvious problem,” said James McManus, a vacation rental applicant.
Vacation rental permits are not directly transferable between the buyer and seller of a house. However, the buyers have knowledge of when the sale will close and can beat out others who may be interested, McManus said.
Even if the buyers are not interested in the vacation rental, the sellers could make a deal with someone else interested in the permit, he said.
“There’s all kinds of shenanigans that could happen,” he said.
McManus and his family tracked the sale of the house with the vacation rental permit closely through La Plata County’s website and tried to turn in their application to the city Planning Department shortly after the sale closed in January.
But when they came to the office, they were told the buyers of the home had already turned in their application.
A third party also was interested in the vacation permit and had been trying to turn in an application as well, Planner Craig Roser told City Council.
Others have also inquired about vacation rental permits, Director of Community Development Kevin Hall said.
Hall decided in February to put a moratorium on accepting vacation rental permit applications and issuing permits until a wait list process was established.
In the interim, another coveted vacation rental permit became available because another home sold.
On Tuesday, the council decided to give a vacation rental permit to the buyers of the East Fifth Street house.
One of the buyers, Rich Myers from Ohio, said he was informed of councilors’ discussion, but he had not been officially notified about the permit.
Myers is not in the vacation rental business, and the vacation rental permit would not have changed his plans to move to town and live in the house.
He also said a wait list will create a more equitable process.
“I think it’s a good development and makes the city planner’s life a lot easier,” he said.
As for the other applicants, the board decided to ask McManus and the third applicant to flip a coin for the second permit. The loser of the coin flip will be first on the new wait list.
McManus said he plans to challenge the coin toss for several reasons.
If the city is trying to award applications based on when they were intended to be filed, he believes he should receive a permit.
A wait list would eliminate the rush to apply for permits when homes are sold.
“It won’t happen again to anybody else,” Councilor Sweetie Marbury said during the meeting.
The city plans to accept applications during a specified period for those who want to be on the wait list. It would hold a lottery to determine each applicant’s place on the list, Planner Scott Shine said.
The initial application period, which would be widely advertised, would be for those who do not have vacation rental permits, he said.
The council will consider a resolution to create the wait list at 6:30 p.m. Tuesday during the regular meeting at City Hall, 949 East Second Ave.