Short-term rental owners in Denver are forfeiting extra income to avoid criminal charges.
The city has been getting tough on owners of Airbnbs, VRBOs and other rentals since new rules were enacted in 2016, requiring residents to get a license and prove that they're using their primary residence as a rental rather than a secondary home.
These regulations aim to prevent short-term rentals from decreasing Denver's overall housing supply and thus potentially raising rents and home prices.
Toward the end of 2017, an auditor criticized the city, saying it didn't execute the rules effectively and could be putting itself at risk for legal action due to "public confusion on how to stay in compliance."
Denver now is pursuing criminal charges to enforce the regulations, prompting more rental owners to surrender their licenses. So far this year, 154 people gave up their licenses compared with 93 in all of 2018, say data from the Denver Office of Excise and Licenses.
The crackdown is in response to residents' noise and safety complaints about short-term rentals. The city gets about three complaints a week and has a duty to respond, said Eric Escudero, spokesman for the Office of Excise and Licenses.
After repeated violations, owners are asked to sign affidavits, putting them at risk of criminal charges if they're untruthful. Escudero said this is a last resort.
"Our goal is compliance and nobody facing fines or criminal penalties," he said. "However, the recent media coverage about the Denver DA charging people for lying on a sworn affidavit about their primary residence has resulted in a surge of people turning in their STR license or not going forward with their application because they become aware that Denver takes rules for short-term rentals seriously.
"The affidavit has been a hugely successful tactic because it has resulted in more people getting their required STR license, more people in compliance with the rules, and more people surrendering their license if they are operating illegally. I wouldn’t be surprised if this tactic is eventually copied in other cities across the U.S. who are also facing challenges regulating the internet business of short-term rentals."