Skift Travel News Blog

Telluride, Colorado, is lifting its moratorium on new short-term rental licenses and introducing a $857 annual per-bedroom regulatory fee for property owners who rent to vacationers. This move is aimed at boosting revenue for housing initiatives and alleviating housing shortages.

A recent study by Economic and Planning Systems in Telluride offered various per-bedroom regulatory fee options to help address the impacts of short-term rentals and support affordable housing. 

_{A Vrbo listing in Como, Colorado. Source: Vrbo}

One of the options included a 100% mitigation rate, charging $2,608 per short-term rental bedroom to generate $3.9 million for affordable housing, and a 20% mitigation rate, which would levy a $522 fee per bedroom, generating $778,000. The council chose a rate targeting about $1.5 million annually for affordable housing.

The Telluride council introduced three tiers of short-term rental licenses exempting residents who rent for under 29 days a year from the new per-bedroom regulatory fees, while “classic” license holders will pay the full fees.

Telluride now joins three other communities in adopting regulatory fees to fund affordable housing. Breckenridge charges $756 per bedroom. Pagosa Springs charges $500 a bedroom. 

The town is also mulling a ballot measure for 2024, seeking voter approval for an excise tax on vacation rental homes. Additionally, Colorado Governor Jared Polis is exploring legislation to categorize short-term rental properties under commercial lodging properties for tax purposes, arguing that they should be taxed at commercial rates rather than residential property tax rates.

Multiple Colorado counties and towns approved ballot measures on November 8 to shift lodging tax revenue—a key funding source for tourism promotion— toward local community initiatives. The passage of the measures underscore the Skift megatrend that communities are no longer spectators in travel.

Ballot measures to increase lodging taxes to fund affordable housing and other community initiatives were passed in Estes Park, Summit County, Glenwood Springs, Dillon, Eagle County, Lyons, Nederland and other municipalities. The measures didn’t pass in the municipalities of Grand Junction, Centennial and Hudson. 

Many of the measures were passed with overwhelming majority support. In Estes Park, 63 percent of voters approved an additional 3.5 percent lodging tax extension on the local marketing district. 

Some local DMOs supported the ballot measures and their approval. “With the support of our board of directors and the community, we were able to not only support opening this funding avenue to support essential community needs, but to also work diligently to ensure that Visit Estes Park can continue to provide important marketing and management services to our tourism partners and guests by protecting our existing budget,” said Visit Estes Park CEO Kara Franker. 

The ballot measures came into play this year thanks to a bill signed by Colorado Governor that allowed municipalities to let voters decide how to allocate up to 90 percent of lodging tax funds to areas outside of tourism promotion.