Trials set for two Stapleton realtors accused of violating Denver’s short-term rental regulations

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Alexander and Stacy Neir arrive at Denver’s downtown detention center for a hearing, June 21, 2019. (Kevin J. Beaty/Denverite)

Two Stapleton realtors accused of violating Denver's short-term rental regulations failed to persuade prosecutors to reduce the charge they face and are now hoping jurors will believe they should not have a felony on their records.

Stacy and Alexander Neir each pleaded not guilty Monday to a charge of attempting to influence a public servant by means of deceit. Stacy Neir's jury trial was set to start April 7 and her husband's April 14.

The Neirs are the first of four people charged since June with the same felony for violating the requirement that owners of a short-term rental unit live at the site as their primary residence. The charge stems from allegations that the four individuals made false statements in notarized affidavits about their residences in order to obtain or retain licenses to rent their property for short periods.

Dan Recht, the attorney representing Alexander Neir, has argued that the Neirs' actions do not amount to a felony and said he has tried to persuade prosecutors to reduce the charge.

"We wouldn't mind avoiding a trial with a very lenient plea bargain," Recht said after the couple's brief court appearance Monday. "But otherwise we are prepared to go to trial and think we will prevail."

Denver's primary residence provision adopted in 2016 was meant to ensure investors didn't buy up and convert so many units for the use of vacationers or other short-term renters that the city's stock of permanent housing would be reduced, making it even more difficult for moderate- or low-income families to find a place to live.

In March, Denver's Department of Excise and Licenses began requesting affidavits of applicants for short-term rental licenses in cases in which agents strongly suspected the person applying was not planning to rent his or her primary residence. Department officials say that in most cases, requesting an affidavit was enough to persuade a prospective landlord to abandon an application that was not in line with the law. City officials say they turn possible violators over to district attorneys only as a last resort.

Licenses to operate short-term rentals have been required in Denver since Jan. 1, 2017 and cost $25. Hosts must also pay lodger's and other taxes.

Denver is not the only city to have found it a challenge to address a business model popularized around the world by AirBnb and other online companies.

Vrbo, one of the companies that allow homeowners to rent out their homes to vacationers, commissioned the research firm Oxford Economics to study the impact of short-term rentals on housing affordability. Oxford Economics looked at 2,500 counties across the United States between 2014 and 2018. According to the results of that study released last week, short-term rentals accounted for less than 1 percentage point of a 4.3 percent increase in rents and about 1 percent of a 14.9 percent increase in house prices. Factors such as increasing employment and wages played bigger roles in increasing housing costs, the researchers found.

"Adopting stricter regulations on short-term rentals is unlikely to solve the housing affordability crisis faced by many American households," Alice Gambarin, who led the study for Oxford Economics, said in a statement. "It is important to weigh these potentially modest affordability benefits against the associated negative consequences for the local economy, including lower levels of tourist expenditures and tax receipts."

Denver's economic development office conducted a local analysis released in April that concluded that it did not appear that short-term rentals had so far influenced housing costs here, in part because they made up just 1 percent of the city's housing stock.

The city's analyst, Katherine O'Connor, also said that a key factor mitigating the influence was the primary residence requirement.

"This prevents investors from purchasing housing that would otherwise be used for normal, long-term residential purposes, thereby decreasing the housing supply and inflating prices," O'Connor said.

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