Short-Term Rentals

Proposed Ordinance:

The City Planning Commission, on August 16, 2018 will hear input on the proposed short-term rental ordinance related to Short Term Rental Units and the Short Term Rental Unit Permit.

View Ordinance

Highlights of the proposed changes include:

  1. Addition of a definition of Short Term Rental Unit,
  2. Addition of Short Term Rental Unit to the threshold of review,
  3. Addition of language that a Short Term Rental Unit is allowed as accessory use to a residential use in any zone district with approval of the Short Term Rental Unit permit,
  4. Addition of Short Term Rental Unit Permit to the appeals section of code stating that new Part 17 is subject to appeal similar to other permit types, and
  5. New Part 17 that outlines the requirements for obtaining and keeping a permit for a Short Term Rental Unit and how that permit may be denied, suspended or revoked.

There are currently no standards for short term rental units within City Code. A number of cities and counties across the United States and here in Colorado have recently adopted regulations related to short term vacation homes; also known as vacation home rentals, VRBO, short term rentals and AirBnB. All of these terms are used to describe a residential home or residential unit or portion of a residential unit rented for less than 30 days. Vacation home rentals are an increasingly popular rental method for travelers. While staff currently has no good way to estimate the totals within Colorado Springs, sources estimate that there are approximately 1000 units within the city that are used or have been used as a short term rental unit.

Over the last several years, City staff has received a number of inquiries by citizens and neighborhood organizations related to the rules for these short term rentals. However, staff has no way to track locations being used as short term rentals, if the owners are paying sales tax in the form of Lodgers and Automobile Renters Tax (LART), and who to contact locally if there is an issue or concern with the property. The proposed ordinance is intended to create a registry for these uses and a community standard to follow in order to continue operation as a good neighbor while letting visitors to our community know the neighborhood expectations and what to do in case of an emergency.

In addition, the permit process, or registry, will require that short term rental unit owners obtain a sales tax license through the City Sales Tax Office. This is one of the larger controversies surrounding short term rental units; owners don’t know that they are required to pay LART and don’t obtain the proper sales tax license. Only the website AirBnB currently collects sales tax for the City on behalf of the owners that post with that site. Other than those posted on AirBnB, approximately 200 other addresses are listed with the City Sales Tax Office as having a sales tax license. 

About Short-Term Rentals

Short-term rentals are homes that are rented out by the owner or a property management company to vacationers or other occupants for periods of less than 30 days. This travel option has been popular in Europe for a number of years for visitors who prefer a slower-paced stay in a residential neighborhood over a fast-paced rush from hotel to destination. This concept has caught on throughout the world and is now an additional option for visitors to Colorado Springs.

Owners

If you are thinking about starting a short-term rental, there are several things you should know from zoning and tax collection to being respectful of your neighbors.

Zoning and Building Codes

Short-term rentals are allowed in any zone where single-family or multi-family residential uses are allowed. For more information on how to obtain the zoning of your property, consult Property Zoning or contact the Land Use Review Division at (719) 385-5905.

Short-term rentals must also meet the occupancy requirements as defined by the International Building and Fire Codes. For more information on occupancy type, you may call the Regional Building Department at (719) 327- 2880.

Finally, no signage identifying the property as a short-term rental is permitted. The intent of this regulation is to ensure compatibility between short-term rentals and the surrounding neighborhoods.

Tax Collection

Short-term rental owners or managers will need to obtain a sales tax license from the City’s Sales Tax Office at 30 S. Nevada Avenue, Suite 203. Owners or property managers must collect both sales and lodging or LART tax for each stay of less than 30 days. For more information, call the main Sales Tax line at (719) 385-5903.

Be Neighborly

Before starting a short-term rental, it is a good idea to talk to the neighbors. Give them contact information so they may call you if they experience problems with your short-term renters or if they see something suspicious at your property. It is also a good idea to have someone available to respond to potential problems as they arise. If you will be out of town, make arrangements with a friend, business associate, or property management company to make sure someone will be available at all times.

Also, ensure your short-term renters know they are renting a home in a neighborhood and let them know you expect them to conduct themselves in a courteous and respectful manner while in the home.

Neighbors

If you live next to a short-term rental and you experience problems, call the property owner or management company first.

Even though renters may be on vacation or from out of town, they must still abide by the City’s nuisance laws. To report violations, contact the City of Colorado Springs Police Department at (719) 444-7000.