Airbnb’s in Denver? Not So Fast!!!

Written by: on Wednesday, January, 18th, 2017

Airbnb’s continue to increase all over the country and, oftentimes, wreak havoc in community associations. Denver has a new ordinance 0262  that became effective December 31, 2016, throwing a slight monkey wrench into the process.
Pursuant to the new ordinance, homeowners must now obtain a license from the Denver Excise and Licenses Department before they may utilize their homes as Airbnb’s, VRBO’s or any other short term rental, which is defined as rental of less than 30 days.

In order to obtain the license, applicants must be legal residents of the United States, possess valid City Lodger’s Tax account numbers, and show that the homes in question remain the applicants’ primary residences.

A primary residence is defined by the ordinance as “the usual place of return for housing,” which must be documented by at least two of the following:

• Motor vehicle registration
• Driver’s license
• Colorado state ID card
• Voter registration
• Tax documents
• Utility bill

What does this ordinance mean for associations in Denver? One thing it means is that homeowners cannot utilize their homes for purely business/hotel purposes. They must continue to utilize the home as their place of abode and either rent out portions of the homes (if the association’s governing documents so allow) or only rent out their homes while they are on vacation or otherwise away.

Although this ordinance will not completely eliminate the short term rental in Denver, it will require owners to take specific steps to become eligible to rent out their homes and it will eliminate the existence of purely investment homes currently being utilized solely as a hotel. With an estimated 1,700 Airbnb’s in Denver alone, Denver is the first city in Colorado to launch such an ordinance. Although Denver may be the first, it is likely not the last, with other municipalities, like the City of Lakewood, also contemplating adopting similar regulations.

What do you think ordinance 0262 will do for common interest communities in Denver? We’d love to hear your thoughts, reactions, and comments.