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The Evolving Guide to Summit County Short-Term Rental Regulations

08/24/2022

A beautiful view of Breckenridge and the mountains with Summit County short term rental properties

From buying a home for yourself, to investing in a vacation rental property, or even combining the two—Summit County remains a great place to buy and sell real estate. 

However, the rules and regulations about Summit County short-term rental properties continue to evolve. These ever-changing guidelines affect your choices and budgets. They also impact the quality of life in Summit County, and current debate involves whether that impact is a positive or negative 

At Paffrath & Thomas, our team of Realtors® have put on their mental track shoes and are racing along with the changing legal hurdles on the state, county, and city levels. Read on for the “lay of the land” when it comes to Summit County short-term rental requirements.

What Is a “Short-Term Rental” in Summit County?

A short-term rental (“STR”) usually refers to a residential property that you rent out for less than 30 days. Popular websites most often provide access to these rental opportunities, such as VRBO and Airbnb. 

In Colorado, STRs are governed by state, city, and municipal laws.

Why are Summit County Short-Term Rentals So Popular?

Summit County offers excellent vacation and getaway possibilities! Pick your season, and then get ready for fun and adventure. Ski the powder, fish the streams and lakes, hike the mountains—all set with the Rockies as your backdrop.

Interestingly, there are few large hotels in the area. So tourists seeking fun (or refuge from big city life) need places to stay. Summit County short-term rentals are the key to filling this void.

For the property owners, short-term rentals can work out terrifically. The owner gets to use the home whenever they want and the idle time can be used for short-term rentals.

Why are Summit County shortterm rental rules and regulations changing?

There are two main reasons for the intense attention that short-term rentals have gotten recently.

Workforce housing

The purchase of properties to become short-term rentals impacts the availability of long term rentals. With those rentals, seasonal and yearly employees can’t find economically sustainable housing. 

Mountain community preservation

Tourism provides a terrific income source for our county. But for long-term residents, the influx of these dollars can seem to change their community’s spirit and character. 

They might have moved to that town because it’s small and has that feel of tight-knit mountain friendliness. When the town fills with short-term rentals and large numbers of tourists, it can quickly alter the landscape of the downtown businesses, the accessibility of the town itself, and the quality of life during high season.

The Hierarchy of Summit County ShortTerm Rental Authority

The governing bodies work to sort out issues, listen to concerns, and try to establish fair regulations for STR owners, and for residents.

Multiple levels of authority exist to legislate short-term rental rules. The powers available to each of these levels fluctuates, which in turn can change how a property can be used—even as the bids are made for properties. 

That’s why it’s so important to have conversations with your local Realtor® about the current regulations.

First Authority: the State

For the most part, the state of Colorado legislates the powers and authority of county and city governments to create and enforce property ordinances. The state also can create ballots as a form of collective ordinance creation when it deems the process necessary. 

The state controls taxation on STRs to offset subsidization initiatives for affordable housing for seasonal employees. 

Second Authority: the City

City ordinances supersede county ordinances regarding short-term rentals. Each city has its own rules and regulations, which can differ quite a bit from each other. 

At Paffrath & Thomas, we’ve been Realtors® in Breckenridge since 1979, specializing in all forms of residential, commercial, and vacant land real estate. We’re intimately familiar with each city’s requirements, and are ready to help you navigate these ever-changing waters.

Third Authority: the County

In 2018, Summit County began regulating shortterm rentals and vacation properties in unincorporated areas. Since then, more rules have been created, including limited-length moratoriums on any STR creations, and “zones” for operation. 

What Are These “Zones?”

To date, Summit County has adopted STR Overlay Zones to create a distinction between neighborhoods and resort communities. 

Resort Overlay Zone

This area designation includes Keystone, Copper Mountain, Tiger Run Resort, and unincorporated areas at the base of Peak 8 in Breckenridge. Commercial lodging and/or short-term rental property owners in the Resort Overlay Zone will have to apply for a Resort License. 

Resort Licenses allow larger occupancy allowances and don’t restrict the number of nights a person or entity can rent the property. 

Neighborhood Overlay Zone

STR properties not in the Resort Overlay Zone will automatically be considered to be in a Neighborhood Overlay Zone. Short-term rental property owners in the Neighborhood Overlay Zone must apply for either a Type I, Type II, or Type III License. The vast majority of Neighborhood Zone Licenses will be Type II.

This zone limits property occupancy to a maximum of 2 people per bedroom plus 2 within the rest of the property (such as a fold-out in the living room). The Type II license mentioned above limits the total number of nights the property can be rented in a year to 135.

Why Would a Moratorium on STR Licenses Ever Be Issued?

The county has enacted limited-time moratoriums on issuance and/or approval of land use for commercial lodging, which includes short-term rentals. Their proposed purpose allows governance staff time to propose new regulations which could address the increase in STRs in the Neighborhood Overlay Zone. 

The moratorium also allows governing bodies time to understand the impact commercial lodging has on local workforce housing. They hope to address inconsistencies and conflicts within the Land Use and Development Code governing commercial lodging and short-term vacation rentals. 

Breckenridge, Colorado, USA downtown streets at night in the winter with holiday lighting.

Will Changing Rules & Regulations Affect My Current STR Ownership?

No, most of the changes don’t affect current property owners. They get to continue using their property the way they have been. However, they may have to get new licenses for different “zones,” depending on if and where those zones land. And there can be new taxes levied.

For example, the moratorium mentioned above applies only to new licenses in the Neighborhood Overlay Zone. They don’t affect existing licenses, pending applications, or renewals. 

But in all other ways, current property owners get to keep their license.

What If I Want to Sell My Property?

You certainly can. The issue is, your license doesn’t pass on to the new owner. Whoever buys the property must adhere to new laws and licensing limitations—including if the city, county, or state has enacted a moratorium. 

The new owner must apply for their own license, and if there’s a moratorium, it won’t be issued. Licenses don’t pass on in perpetuity with the property.

Can I Do a Bed & Breakfast?

Yes and no. Summit County has rules about creating a bed & breakfast in your home, including that you must live there full-time. However, many cities prohibit actual bed & breakfast businesses from operating in them. 

If you’re interested in this kind of business, contact us and let’s look at where it can be done, along with the current statutory limitations. We can help you understand if it can be done at all.

Now, even with the above restrictions, “Airbnbs” are allowed. In these pseudo bed and breakfast situations, the owner doesn’t live at the property, so they are considered a short-term rental. Statutory limitations of Summit County short-term rental regulations will apply to Airbnb businesses.

What Do You Currently Recommend to Purchase for ShortTerm Rental Income? 

With the current flux in Summit County short-term rental rules and regulations, we feel your best bet at this time is to purchase a true resort property. 

This kind of property will have already been deemed a resort by the town/county. Some of the requirements for this property classification may include having:

  • A front desk
  • Convention center space
  • Guest amenities (pool, hot tub, etc.)
  • Multiple rooms/units
  • And more.

Basically the property acts and feels almost like a hotel. A “condo hotel” remains the most straight-forward of these purchases. We would be delighted to discuss all the details, current legislation, and personal commitments a resort property investment requires for a prospective buyer.

Let Paffrath & Thomas Real Estate Help You Keep Up With the Changes. 

The regulatory landscape changes day-to-day. As a true local Realtor®, we’re keeping our finger on the pulse of the market and its governing entities. That includes tracking Summit County short-term rental regulations. 

It Starts With a Conversation.

When you talk to us about possibly buying property in Summit County, one of our first questions for you will be “are short-term rentals an important part of your purchase?” 

If you say yes, we’ll talk about locations you like, fill you in on the current rules, and what’s on the docket for the future. We’ll help you understand the rental situation property-by-property.

Having a real, local agent available to you means you don’t have to worry about knowing what the city, county, and state legislatures have changed. That’s our job! You can reach out to us with any questions, and look at all our current listings. Ask us about the STR potential for them.

Together we’ll make sure you get the right property at the right time. Living in Summit County is loving life here, and we’re determined to help every one of our clients do just that.

A Little About Paffrath & Thomas Real Estate

Breckenridge, CO, established itself as a new ski town in 1979. Mark Thomas & Jeff Paffrath saw the potential at that time, and to be honest—they loved living here. So the two did what came naturally: they partnered together to help shape the booming town that Breckenridge is today.

In the decades since, Mark & Jeff hand-selected a team of professional Realtors® dedicated to providing a level of service and expertise second to none. 

Let’s Talk!

Not only does our team offer a perspective on the market that few others can match, we also offer an invitation to share the lifestyle that we love. Contact us whether you want to buy a property, or sell your mountain property. You can see what your home is worth on our website, and then let’s talk about the future. Your future.

Come for the winter, stay for the summer. We’ll be here, as your Realtors®, neighbors, and friends—ready to help you come home.

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