The Colorado Senate on Wednesday overwhelmingly passed bipartisan legislation that would prevent counties from regulating backcountry cabins and huts under short-term rental regulations.
“I do think when you have an increased population and you have people discovering your secret spots around the state, part of the secret sauce has the potential of disappearing or getting overturned and ruined,” Colorado Senate President Steve Fenberg, a Boulder Democrat and one of the main sponsors of Senate Bill 213, said at an April 25 hearing for the legislation before the Senate State, Veterans and Military Affairs Committee. “Part of the solution is making sure we are regulating correctly … but not over-regulating in a way that removes that special sauce.”
County commissioners are opposing the legislation, saying they cannot find any examples of a county rejecting a short-term rental license for a backcountry hut or cabin. But the legislation is connected to the wealthy owner of a backcountry property outside Crested Butte who is suing Gunnison County after the county limited occupancy in the remote cabin that rents for $1,500 a night.
“The question we have is what is the issue? What is this thing to solve? We have asked all our hut operators and they don’t say they have any issue with county regulation,” Eagle County Commissioner Matt Scherr said in an interview. He described the legislation’s language as “really sweeping with what it would allow from an operator’s perspective and what it would disallow from a county perspective.”
The lobbyist for the legislation is Denver-based public affairs firm The Capstone Group.
State lobbying disclosures show The Capstone Group’s work on the bill is on behalf of the Connecticut-based investment firm Marshall Street Management, the family investment firm of Jesse Fink, who cofounded the online travel booking site Priceline.
Fink’s son, Drew Fink, lives in Boulder and testified at the April 25 committee hearing “as a hut user and recreation property owner” urging the senators to approve the legislation. He said he had acquired a recreational property to use personally and to share with visitors.
“This bill takes an important step that these remarkable places remain available to everyone and not just those privileged enough to own them,” Drew Fink said at the committee hearing. “It is not a free pass to create unsafe or unsanitary spaces. It simply says if you built it legally, you have the ability to share it.”
Fink is the owner of a backcountry cabin in Washington Gulch outside Crested Butte. It is managed by the new Campfire Ranch, which offers stays and guided adventures at three remote cabins including on the Taylor River and on Red Mountain Pass. Fink is suing Gunnison County after the county concluded Fink’s three-bedroom cabin up Washington Gulch — which is located a 4-mile skin or snowmobile ride in the winter from the trailhead — was operating last year in violation of multiple septic, building code and land use regulations.
The 3,122-square-foot cabin on an inholding at 6001 County Road 811 was a single-family home before Fink purchased the property in August 2022. In late December, the county told Fink that leasing to as many as 12 people violated regulations concerning the capacity of the cabin’s on-site septic system. The county told Fink he could have no more than six people in the home. The county also told Fink that his overnight parking for guests at the Washington Gulch winter trailhead was illegal and the commercial operation in the drainage violated county land use regulations.
The county’s notice of violation forced Fink to cancel reservations at the cabin, causing him to lose $68,000 in booking revenue. Fink sued the county in February and filed multiple open records requests for thousands of pages of documents.
“Mr. Fink currently faces civil and criminal penalties should he use the property for his own personal and family use and have more than six people stay at the property, precluding him from using his own home for family gatherings of which there are more than six members and should he short-term rent the property to more than six people,” reads the lawsuit filed by Fink and Campfire Ranch in Gunnison County District Court.
Fink’s attorneys at Gunnison-based Law of the Rockies and Denver-based Ireland Stapleton Pryor and Pascoe and Campfire Ranch’s attorneys at Holland and Hart argue the county “abused their discretion and acted arbitrarily and capriciously” with its denial of groups larger than six at the backcountry cabin. Fink and Campfire Ranch are seeking a jury trial.
Fink said in an email that his support for the bill is not related to the lawsuit.
“This effort was born out of concerns that I and others shared that regulations designed to protect housing availability would deny Coloradans the ability to enjoy unique properties,” Fink said. “We felt that all Coloradans should have access to amazing backcountry properties and not just those, like me, who are fortunate enough to own them.”
Fenberg told The Sun that Fink approached him as a Boulder constituent with the concerns about his struggles in Gunnison County. He told The Sun he’s surprised by the opposition from counties and he has narrowed the bill based on their concerns.
Commissioners worry about unintended consequences
The legislation says that “recreational structures” in unincorporated areas of Colorado that do not rely on public water, power or sewer infrastructure and are not primary residences should not be regulated under county rules for short-term rentals. Thomas Davidson, the executive director of the 22-member Counties and Commissioners Acting Together nonprofit, warned Colorado senators at the April 25 committee hearing that the legislation could “inadvertently throw open a very big loophole” for all short-term rentals in unincorporated areas of counties.
Gunnison County Commissioner Liz Smith testified at the committee hearing saying the county “has serious concerns” with the legislation and that “nearly every short-term rental in unincorporated Gunnison County” could fall under the definition of offering recreation access and having its own heat, water well and septic system. The legislation could prevent the county from enforcing regulations around wildfire mitigation, wastewater treatment and parking, Smith said.
Gunnison County Attorney Matthew Hoyt sees similarities between the Fink lawsuit and when Texas Attorney General Ken Paxton threatened the county with legal action in April 2020 if it kept discouraging some 4,000 second homeowners from moving into the county during the early days of the pandemic.
“Starting with COVID and the Texas Attorney General, we have begun to see a trend where well-resourced and well-connected property owners attempt to strong-arm local government into getting what they want, regardless of the adverse effects on public health, water quality, wildlife and local values,” Hoyt told the Colorado Sun. “We see this latest legislative effort as more of the same — using power and influence in Denver to overcome local control and stakeholder input on the Western Slope. Gunnison County is not going to take this lying down. We will continue to oppose such misguided legislation.”
Marco Vienna, with the Steamboat Springs-based Four Points Funding Opportunity Zone investment firm testified in support of the legislation, but making clear he was speaking as an individual, not the investment fund. The fund’s $270 million portfolio includes investments with entrepreneurs offering 198 RV sites, 42 cabins, 29 tiny homes, 43 clamping units and 60 campsites in Buena Vista, Florence, Grand Junction, Meeker, Montrose and Naturita.
Vienna told the senators that while county regulations around short-term rentals have increased lodging tax revenues that have enabled more affordable housing, some policies have hindered hospitality businesses in rural areas.
“The legislation would enable the existing remote recreational accommodations to continue operating, therefore, providing equitable access to the outdoors. The bill does not pave the way for more huts but returns business to usual for some hospitality businesses,” he told The Sun, noting that imposing STR regulations on backcountry huts essentially excludes any public access to remote cabins. “I do believe that more remote recreational accommodations would be amazing for rural economies. It is extremely hard to book these outdoor opportunities because they are so popular. Popular areas of Colorado have been loved to death in many cases and having a hut, yurt or otherwise can create less of a footprint impact on the environment while providing public access where the volume is controlled.”
Davidson, in an interview, said counties are supportive of the short-term rental industry and backcountry hut systems. Counties only learned about the legislation days before the committee hearing where it was unanimously approved.
“The most important thing we want to emphasize is that we cannot find one example of a backcountry ski hut that has been denied a STR license. This feels like a solution in search of a problem,” he said. “Between all the things we are working on with affordable housing and property taxes, this feels like a lot for us to understand suddenly in the last two weeks of the session.”
Scherr in Eagle County wondered why there was urgency with the legislation when there does not appear to be any urgent issue. With Republicans and Democrats supporting the bill this late in the session, Scherr said, “this feels like a freight train.”
“With all the subjective language we see a lot of potential public impact with this bill, particularly with lawsuits,” Scherr said. “We are looking at people with a whole lot of money who can sue, which is what I think we are seeing in Gunnison County. There’s just a tremendous amount of concern around this.”
The bill passed the Senate 28-7 on May 1. It now heads to the House for debate. The legislative session ends Wednesday.