As I talk with potential buyers and existing clients, I realize there are a lot of misunderstandings about what rules are in place, what rules are proposed, and where these rules apply. I am hopeful this article breaks it down for you, so you have a better understanding of Summit County Short Term Rental regulations.
I remember doing a radio interview about 4 years ago when Denver had recently passed STR regulations stating that STRs could only exist in an owner’s primary residence. Now that seemed really weird to me coming from a resort market where STR’s are commonplace and are NOT in primary residences, but are instead in vacation homes. I mean, after all, I can’t imagine some poor guest staying in my house with my kids, dog, home office, overflowing refrigerator and laundry baskets, and just plain overall family frenetics. In this interview, I was asked whether STR’s would ever be regulated in Summit County, and I said something to the effect, “Short Term Rentals are the lifeblood of our tourist economy, and I can’t imagine that they would ever be regulated.” I was wrong.
The landscape changes often with this topic, and there are strong opinions on both sides. Policy makers have to weigh individual property rights of owners with the lack of affordable housing and rentals in our community. Depending on the jurisdiction, your elected officials are taking different sides and some are just waiting and seeing what happens.
Below are updates for each jurisdiction. Breckenridge is by far the further along in passing regulations, and those are outlined below. Summit County (which includes all areas not within town borders and also includes Copper and Keystone), is in the process of designing legislation, and I have outlined their considerations also.
Watch this video below to find out if your property is located in a town or Summit County unincorporated for STR regs.
As expected, on September 28, 2021, after listening to an additional 3 hours of public comment, the Breckenridge Town Council passed a cap on new short-term rental licenses for non-exempt units at a maximum of 2200 licenses. There are roughly 3,000 non-exempt licenses right now. Permits will be reduced through attrition, meaning as properties are sold, or licenses are turned in, the permit level will be reduced. Once the 2200 level is achieved in several years, the Town will issue licenses based on a waiting list. Attached is the ordinance and staff memo. The ordinance goes into effect November 2nd, 2021. Current property owners may apply for licenses up until November 2nd. Properties under contract must have been under contract at 11:59 pm September 27th to obtain a permit.
If you had a property under contract on September 28, it must close by November 2 to get a permit. The Town confirmed that a way to handle this if the property closes after November 2, is to have the seller apply for a permit before 11/2 and then the Buyer can apply for a permit within 20 days. See below:
1) Property without a valid STR license goes under contract on September 28
2) The seller applies for a license before 11/2 and is issued a valid license
3) Property closes, and the title is transferred sometime after 11/2
4) At the time of title transfer, the seller has a valid STR license, so the exemption applies, and the new owner can apply and receive an STR license regardless of the cap.
Breckenridge Staff Memo September Meeting Details
Here are the details directly from the staff memo from the September 28, 2021 meeting:
1. Sets a cap of 2,200 non-exempt STR licenses at any time
2. Provide for a 6-month temporary STR license to the purchaser of an STR licensed property
3. Requires that exempt properties have an on-site 24 hour staffed front desk
4. The person responsible for staffing the front desk cannot be a member of the security
5. Provides for the administration of a waitlist of applicants for STR licenses when the non-
exempt license population exists above the 2,200 limit
6. Added provisions for exchanges of property that allow the purchaser/grantee of a licensed property to obtain an STR license (‘exempt’ transfer categories)
3. The amount of time a wait list member has to apply for a license after being notified that they are eligible has been reduced from 20 to 5 days
4. Units for which a building permit was issued and in effect on September 14, 2021 may apply for a license within 20 days of receiving a certificate of occupancy (CO).
5. Transfers pursuant to a valid real estate contract that was fully signed prior to September 28, 2021 provided the sale is completed within six (6) months of the signing of the contract.
Here is a list of exempt properties where STR licenses will not be limited.
To make this even more confusing, a “Tourism Corridor/overlay district/zone” is still on the table and will be discussed as early as the October 26th Town Work Session. If this plan moves forward, the existing regulations that were passed on September would perhaps be repealed and replaced with new property exemptions in the overlay district.
There is a moratorium on the issuance of short term rental permits, and anyone who owns or is purchasing a property in unincorporated Summit County cannot apply for a STR permit until the moratorium is over which is mid-December, unless your property is in an exemption zone (Copper, Keystone, and Skiwatch, Tiger Run and the 4 O’Clock subdivision in Breckenridge). There is also a process for a hardship exemption in situations with properties that have rentals that extend past closing and for 1031 exchanges, for instance.
Zones not exempt are:
- Dillon Valley
- French Creek
- Frisco Terrace/Evergreen
- Lake View Meadows
- Mesa Cortina
- Summit Cove
- Alpine Breck
- Quandary Village
- Peak 7
Currently, the Board of County Commissioners is working through ideas for incentive programs for property owners to long term rent, along with changes to STR permitting. Here is the latest information from the Summit County staff memo.
The Board will consider two new zone overlay districts and three types of short-term rental licenses. All license types would be permitted in the resort zone, and the most intense license type would be significantly limited within the neighborhood zone.
- Resort Zone – The resort zone would encompass Keystone, Copper, the unincorporated areas at the Base of Peak 8 in Breckenridge and likely Tiger Run Resort. (These are the same areas that were exempted from the moratorium, with the addition of Tiger Run.) The defining feature of the Resort Zone is that these areas were always intended for short-term vacation occupancy in a resort context. They have amenities and intense STR use is compatible in these zones.
- Neighborhood Overlay Zone – The neighborhood overlay zone would encompass all other properties in unincorporated Summit County. The underlying characteristic of this zone is that these neighborhoods were not developed as resort neighborhoods. While it is true that there are some homes that were designed as STRs, the neighborhoods themselves were not developed to support intense, hotel-like STR use.
STR License Types
- License Type I is a primary-residence STR, this license type would apply to anyone renting their primary residence; they may rent an entire home a few weeks a year or consistently offer a bedroom for rent. No cap on number of nights rented is proposed, as the negative externalities of these STRs (such a displacing locals and loud parties) are mitigated by the home being a person’s primary residence.
- License Type II is targeted to second-homeowners that STR their property but still use it for themselves. Preliminary analysis in evaluation zones show that second-homeowners occupy their STRs, on average, between 50 and 180 nights a year. Staff does not propose to limit the number of these licenses, but rather limit the number of nights a year a Type II License can be offered for rent, a starting place for the proposal would be to cap them at 90 nights a year in neighborhood zones. In concert with limiting the number of nights rented per year, staff suggests offering an incentive of STR licensing fee reduction if the property owner shows evidence of a long-term lease during part of the year. This incentive is not to imply that all of these properties are targeted for workforce housing, but if a property owner chooses to long-term rent for part of the year, they will be compensated with a significant fee reduction.
- License Type III is intended to capture investment property STRs, those homes that are more akin to commercial lodging businesses. No cap on number of nights rented is proposed with this license type. An unlimited number of licenses is proposed in the Resort Zone; however, since this use is incompatible with most of the residential neighborhoods in Summit County, they should be severely limited in the Neighborhood Zone.
While the Town of Dillon had planned to pass an emergency 7-month moratorium on new STR permits on September 21, 2021, Council chose not to move forward with the emergency ordinance, citing the need for more research. Dana Cottrell, SAR Immediate Past President, spoke on the board’s behalf after the ordinance was pulled. She stressed the need for partnership, data and brainstorming unintended consequences. She also recommended decisions be made using S.M.A.R.T. goals that SAR would be happy to evaluate. Finally, she iterated the need for incentives rather than limitations. We will keep you posted as the Town researches options.
With respect to the other Towns we have all been wondering about, our local Realtor Board’s Government Affairs/Public Policy Director, Brian Bernardoni has been in touch with the Mayors of Frisco, Silverthorne, and Blue River on where they stand.
Nothing has been decided but are researching options. Keep in mind the Citizen initiative to put a vote on the ballot this fall to limit STR’s is still out there. That initiative required a few more signatures as of late September, but there have been no announcements as to whether it will make it on the ballot.
Just watching and listening at this time. No action is planned as of right now.
Will have a conversation, but most likely will not take action to limit STR’s. On September 28, 2021, the Town of Blue River issued the following statement in their newsletter:
Blue River Short Term Rentals
With all of the communication around changes in the area to short-term rentals, we wanted to take an opportunity to provide updated information for Blue River.
The Board of Trustees had a brief discussion about short term rentals at the Board retreat in August and again this month. At the time, 18% of the homes in Blue River are licensed as short-term rentals. The Trustees will be discussing the future and evaluating the overall plan for short term rentals at a future work session. This is tentatively set for November. More information to come.
In Blue River, you are required to obtain a short-term rental license and to collect and remit taxes. Information is available on our website. You Do Not need to obtain any other license. It has come to our attention that Airbnb is stating you need a County license, but you do not. We are working with the County and trying to sort through all of this.
If you are not intending on actually short-term renting, please do not obtain a license. This falsely inflates actual number of licensed properties. If the Town decides to make any changes, we will be sure to inform you. In addition, if you are currently renting through Airbnb or VRBO, please make sure you are listed as BLUE RIVER. They do not have an agreement with us to collect the 3.4% lodging tax. If they are collecting this and stating they are remitting it, please note your taxes are going to Breckenridge and not Blue River. If you are listed as Blue River, these companies should be remitting 8.875% to the State of Colorado and you, the licensee are responsible for remitting the 3.4% to the Town of Blue River on a minimum of a quarterly basis.
While we understand the actions taken by the other communities and County have created a sense of urgency, please note, the Town of Blue River is not currently making any changes but instead will be looking at a long-term strategic approach to how short-term rentals look in the Town moving forward.