Denver relaxes penalties for Airbnb as compliance soars

Fourteen months after the City Council signed off on fining booking providers like Airbnb and Vrbo up to $1,000 a day for allowing customers to book an unlicensed rental, the city has yet to do so.

“This (policy) has led to the main players stepping up and doing a little more policing themselves,” said Eric Escudero, spokesman for Denver’s Department of Excise and Licenses, which licenses short-term rentals.

Additionally, two-and-a-half years after the Denver District Attorney’s Office charged four landlords with a felony connected to allegedly attempting to rent something that wasn’t their primary residence — charges that were all later dropped — the city has not referred a single additional case for possible prosecution. In Denver only a primary residence can be listed for short-term rental.

Felony charges didn’t stick

The charges against the four landlords in 2019 revolved around the fact they signed an affidavit stating that the unit they were seeking to rent out was their primary residence, as Denver law requires.

The city mailed them the affidavit because it suspected that the unit wasn’t actually their primary residence. When they were returned with a signature, Denver District Attorney Beth McCann charged each of the four with one count of attempting to influence a public servant — essentially making a false statement.

At the time, an attorney for one of the accused said Denver was the only city in America to file felony charges against individuals in connection with listing or attempting to list a property on Airbnb.

The charges against the four were ultimately dismissed in 2019 and 2020. At the time, McCann’s office said it hadn’t determined it couldn’t prove one of the cases. The office attributed the decision to dismiss the other three in 2020 to the need to prioritize cases because of the coronavirus pandemic, saying it felt it could have won in court.

While no cases have since been referred to McCann’s office for possible prosecution, Escudero said Denver still selectively uses affidavits in investigations when the city suspects the property is not the owner’s primary residence or there are complaints from neighbors.

The city hasn’t found any short-term rentals violating the primary residence requirement since 2020, he said.

Industry policing itself

In addition to the $1,000 a day fine for booking websites, Denver has had an ordinance since 2017 that lets it fine owners of problem and unlicensed short-term rental units.

Escudero said those fines have dropped dramatically. Denver issued 1,244 first-warning fines of $150 prior to late 2020, when the city gave itself the power to fine companies like Airbnb. Since 2021, the city has only issued five first-warning fines.

Escudero said Denver’s license compliance rate across all short-term rental companies is about 90 percent. That’s calculated using software that scans listings across the internet to determine whether a property is licensed.

Escudero said complaints about short-term rentals were once the most reported issue to Denver’s 311 assistance number. Now such complaints are rare, he said.

Escudero said after the ordinance to fine companies went into effect, the rental websites started to require short-term rental owners to submit their license number before posting a unit.

“It’s extremely challenging to list a short-term rental without having a city license and subject to regulations and enforcement,” Escudero said.

In 2018 and 2019, the city issued 10 citations that resulted in public hearings related to primary residence concerns, and two for allegedly violating the safety of the neighborhood, according to data provided by Excise and Licenses. There were none after those years.

The reduction in violations also was likely caused by the pandemic, when active licenses also dropped significantly, Escudero said. There were 2,700 active licenses in August 2019, and only 1,877 in January 2021. As of Dec. 1, there were 2,113 active licenses in Denver.

The city denied about 70 license requests between 2017 and 2020.

However, he said there could be more enforcement coming later this year. The department has staff doing inspections every week, Escudero said.

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