Did AirBnB Kill the mountain town; how are towns “fighting” back?

by | May 29, 2018 | Colorado Real Estate values, Colorado Ski towns, Condo Lending, Denver real estate values, General Colorado Information, Ski lending/ investing


In just about every destination or gateway town, one hears a similar murmur: not only are short-term rentals squeezing the last drops out of the housing supply, but more pro­foundly, they are threatening the very character that drew in locals—and tourists.  In Crested Butte in 1997, short term rentals were a mere 6%, by 2016, they were almost 30% of the housing stock.  What does this mean for residents and real estate values?  What do you need to know?

Why is this so profound?

In Crested Butte, essentially there was a 24% reduction in housing available for long term rentals for people to live and work in the area.  This same scenario is repeating throughout the Colorado high country.    Many mountain towns like Crested Butte are landlocked with very little room to grow.  With a 24% reduction in inventory, prices for the remaining long-term housing has sky rocketed and many workers in the area can no longer live in the town. Along with the decline in housing, the demand is increasing; as tourism increases both in the winter and now in the summer season, there is more need for employees to accommodate the growth

The downward spiral?

Because of the profound housing shortage, businesses in the area are unable to find/retain workers.  These are the very workers needed to keep up with the booming tourism (firefighters, ski patrol, etc…).  This creates a downward spiral, more demand for workers and less supply due to the housing shortage.

This trend is playing out in every mountain town throughout Colorado.  Many cities are taking drastic measures to help workers.    It is interesting to see how towns are reacting to the influx of nightly rentals.  Below are some highlights of many of the destination cities throughout the state.  As you can see, many are being very aggressive in limiting the home sharing trend.

How are towns/cities “fighting back” against nightly rentals?

  1. Telluride: Requires owners to register, obtain a business license, and collect lodging tax. It also limits short term rentals to 30 days 3 times a year.


  1. Denver: The property must be your primary residence & written permission must be maintained from an HOAs, owners, landlords, etc…


  1. Salida: Changes short term rental zoning to commercial therefore increasing the taxes substantially; the rate increase from 7 to 29%



  1. Crested Butte: Put a cap on short term rentals at 30% of eligible units in town. Each rental needs a permit that costs between 500-1000.  Licenses are non-transferable.


  1. Durango: Placed strict limits on short term rentals. They barred short term rentals in certain areas and capped the number in each neighborhood block

The long term:

Denver is the trendsetter with their regulations which appear to be the strictest in Colorado. On the other hand, Salida is taking a novel approach of making the property owners pay higher tax rates.  I think more areas will follow Salida’s lead to increase the tax base.   This trend of limiting/taxing short term rentals is just beginning.  Look for other cities to follow suit in regulations.

What you should do?

If you are buying a property, don’t assume you can provide nightly rentals.  Many municipalities change their regulations quickly and the property might not be eligible for nightly rentals.  If you have a property that does nightly rentals, the new regulations could make it financially unfeasible for short term rentals so ensure you are up to date with the changes.  This is just the beginning of the fights brewing throughout Colorado over balancing affordable housing with nightly rentals


Resources/Additional Reading

  1. https://www.outsideonline.com/2198726/did-airbnb-kill-mountain-town
  2. https://www.powder.com/stories/sheltered/
  3. https://www.denverpost.com/2015/02/20/mountain-towns-learn-to-love-and-regulate-short-term-rentals/
  4. http://www.denvergov.org/content/denvergov/en/denver-business-licensing-center/business-licenses/short-term-rentals.html
  5. http://www.telluridenews.com/news/article_14ada1c1-d531-5f4b-b2b5-763d34218717.html
  6. http://www.durangogov.org/index.aspx?NID=800
  7. http://crestedbuttenews.com/2017/06/cb-town-council-votes-to-limit-short-term-rentals-in-a-split-vote/
  8. https://www.denverpost.com/2016/11/27/mountain-communities-short-term-rental-issues/



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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending.  Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.

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