On Tuesday, August 15, 2023, the Nederland Board of Trustees (BOT) revisited what could be considered one of the most controversial issues of the last 10 years: Short Term Rental (STR) regulations.

The Town of Nederland defines STR as “the rent or lease for any form of consideration of a dwelling, dwelling unit, accessory dwelling unit (ADU), or portion of any dwelling unit to a particular person or persons for periods of time less than 30 days. STR does not apply to or include commercial hotels or motels. An STR is a use that is accessory to such a dwelling or dwelling unit.”

Ordinance 798, Nederland’s regulating document for STRs, was approved and signed on October 1, 2019, but not without several years of discussion, work sessions, and public meetings.

On July 19, 2018, the BOT began discussing drafting an ordinance for the regulation of STRs during a work session. An advisory committee, composed of Trustees, Town staff, and Planning Commissioners was appointed in December 2018 to begin researching how to modify Nederland Municipal Code (NMC) regarding STR regulations.

The findings from the committee were discussed during a regular meeting of the BOT on March 19, 2019, during which Town staff were directed to draft an STR ordinance based on three main regulations: that only a primary residence may be licensed as an STR; rental of a whole-house STR is capped at 30 days per year; and no cap as long as the primary resident remains present when a portion of the house is rented as a STR.

On April 16, 2019, Town staff delivered to the BOT a draft STR ordinance for review and additional discussion. Discussion of the ordinance was continued, along with discussion of an ADU ordinance, during a work session on April 24, 2019, with the matter expected to return as an action item on May 7, 2019.

However, public comment related to Ordinance 798 caused the May 7 meeting to adjourn without any action taken, as a result of the meeting exceeding its four-hour limit. The ordinance continued to be discussed, revised, and amended during work sessions and regular meetings held from June to September, 2019.

Public comment on the issue of STR regulations came mostly from property owners who were already renting their properties as STRs. The majority felt that the regulations were an example of the BOT overstepping, of infringing on the rights of property owners, and of ignoring public outcry to weaken some of the restrictions.

Those comments made in favor of stricter STR regulations garnered inflammatory responses from feuding neighbors, stating that all anonymous letters of complaint were coming from one single residence and that their anti-STR rhetoric was bordering on threatening.

The most heavily discussed changes to the regulations included adding a placeholder instead of a defined limit when specifying the number of days that a whole-house STR may be rented, and amending the amount of days allowed for renting a primary residence as an STR to 180 days per each calendar year.

Class B license holders also had the limit of rental time per year set at 45 days, and also had a limit as to how many Class B licenses someone who does not qualify as a primary resident could hold. Those STRs operating within the commercial zone district were given no limits on the number of days a year permitted for rental.

There was also discussion as to whether STRs should be permitted under all zoning classifications, as well as on clarifying how violations of the ordinance will be enforced, including a “three-strikes” policy in regards to revoking licenses. These specified the fines per violation, starting at $500 and a 30 day suspension for the first violation, to $1,000 and one year suspension, and finally $2,000 and a five-year suspension for the third violation.

Requirements expected of STR license holders were added to the ordinance, including a requirement that each licensee provide their renters with specific information pertaining to properly handling trash removal and the wildlife concerns related to trash removal. An occupancy limit of two people per bedroom was instituted, as well as a requirement for the licensee to provide off-street parking.

Though Ordinance 798, amending Article V of Chapter 6 of the NMC, was given final approval on October 1, 2019, it was written so as not to take effect until March 16, 2020, giving Town staff the time required to implement licensing provisions.

The major changes made to Ordinance 798 before its final approval were: under Section 6-95(b) and Section 6-96(a)(2), changing the required response time for a STR licensee or emergency contact from three hours to two hours; and under Section 6-98(c), removal of a clause stating that in order for someone to apply for a Class B license they would be required to provide “documentation that the person has operated the premise as a STR prior to September 16, 2019.”

Section 6-99(c), which required that an applicant is limited to only one Class C license for a STR, was also removed from Ordinance 798.

Starting in November 2019 and continuing through January 2020, Town staff drafted the STR Policies and Procedures, which underwent revisions based on the Board’s recommendations. Several changes and additions to Ordinance 798 were discussed, which were drafted into Ordinance 805, which the BOT approved on February 4, 2020.

Ordinance 805 includes an amendment to Section 6-95(b) and Section 6-96(a)(2) to specify that a licensee or emergency contact has two hours to respond to “all complaints,” as opposed to the formerly written “active guests.”

Section 6-95(f) was changed to clarify that the maximum occupancy of an STR shall not exceed two “persons 18 years or older” per bedroom, as opposed to just two “people.”

Section 6-101(d), which details the three-tiered system for penalties for violation of the STR code, was changed to $150 with no license suspension for the first violation, $750 and still no license suspension for the second, and $1,500 and a one year license suspension for the third violation.

After the COVID 19 pandemic, the number of tourists traveling to Colorado and to Nederland skyrocketed, as did the cost of housing and construction. The subject of STRs and their effect on communities had become a hot button topic, as the post-pandemic real estate bubble had caused a nationwide housing crisis.

For two years the issue of STRs did not come up on the agenda, until the BOT began discussing ballot language for tax initiatives that were presented on the November 8, 2022 election ballot.

An additional $2 STR Occupational Tax was passed by the electorate, raising the total charge to STR license holders to $4 per room per night, providing an estimated $45,000 in annual revenue to the Town. The ballot language specified the revenue as being for Health and Human Services programs and activities and for law enforcement services.

On October 18, 2022, Trustee Tania Corvalan presented a discussion on possible amendments to Ordinance 798, having identified several issues in the ordinance that needed to be addressed, particularly issues of unattended fire pits and of homes being purchased by investors expressly as STRs.

Trustees also discussed requiring a waiting period before a newly purchased home can be eligible to be a STR, as well as whether ADUs should be eligible as STRs, and the possibility of instating a hard cap on the total number of permitted STRs.

The majority of public comment at the October 18, 2022, meeting was generally in favor of increased management and regulations for STRs, though there were a few comments that stated a belief that STR license holders were being villainized.

Town staff were directed by the BOT to return for a discussion in November 2022 with information from neighboring municipalities regarding what a hard cap on STRs would look like for Nederland, as well as information regarding all the suggestions for regulations, with an emphasis on language concerning permanently banning fire pits.

The continuing conversation on new STR regulations, however, would not come to the BOT agenda for over half a year. However, on February 7, 2023, the BOT voted unanimously to approve Ordinance 836, reinstating Class A licenses to allow for detached ADUs to be used as STRs.

On August 15, 2023, the BOT reviewed the information gathered by Town staff regarding possible new regulations to be drafted into an Ordinance which acts as an amendment of Nederland’s governing document on STRs, Ordinance 798.

The first of the potential regulations is a requirement for the STR to be the primary residence of the license holder. The current rule states that if an STR is not located within the Central Business District, General Commercial, or Industrial zones, or if it is not a detached ADU, then the STR must be the primary residence of the licensee.

The recommendation from Town staff is to require STR operators to “submit proof of residency quarterly with their occupational tax payments to document that no changes have been made to what was originally submitted to obtain licensure.”

This regulation was recommended due to the potential issue of licensees illegally changing their voter registration information on the back of their identification in order to fake their status as holders of a primary residence. Violation of this policy is expected to result in the revocation of the STR license.

The agenda information memorandum (AIM) provided to Trustees during the August 15 meeting by Town Clerk Macy Caligaris detailed that municipalities such as Boulder, Denver, Idaho Springs, Oak Creek, and Colorado Springs all require that an STR be the primary residence of the license holder.

The second potential regulation involves fire pit safety, and either an amendment to require STR license applicants to disclose that they have a fire pit and to provide renters with educational information and guidelines concerning the safe operation of a fire pit, or the outright banning of fire pits and outdoor burning of any kind, as has been implemented in Idaho Springs.

A hard cap on the total number of STR licenses allowed to be issued in Nederland was the next potential new regulation.

According to the AIM, the Town has a total of 720 total housing units, with 56 active STR licenses, equaling 8% of the current housing stock being rented as STRs. Idaho Springs instituted a maximum cap of only 15 licenses, as did Oak Creek. Frisco has the highest cap for STRs, set at 22% of their total housing stock. Minturn has the lowest cap, set at 10%, with Leadville close at 12%.

The recommendation by Town staff is to remove the system of having separate license types and instead set a hard cap on the number of licensed STRs to be allowed in town. It was also recommended that an implemented cap not affect any STR license currently active, meaning current licensees would be “grandfathered in,” and would not have to relinquish their license if the number of active licenses would already exceed the eventual set cap.

The fourth potential regulation is a requirement that the property owner own their home for a specified number of years before the property is eligible to be licensed as an STR. This requirement is aimed at mitigating financially motivated real estate purchasing by outside investors who are not community minded and desire only to convert property into STRs.

Minturn and Oak Creek have set their own requirements that a property must be owned by the potential STR licensee for at least two years; Minturn has recently added an exception to this rule: that homes within a certain zoning classification are not affected by that regulation.

The fifth potential regulation would be to establish fees for late renewal of an STR license, which is a standard requirement for most STR licensing procedures. The AIM specifies that the funds from collected fees could help support the procedural and administrative efforts for the STR licensing process.

A requirement that the listed emergency contact for an STR rental must be a local resident was the last of the potential new regulations.

Due to public concerns that homes are being purchased for the express purpose of becoming STRs, Town staff is recommending to the BOT that all STRs must have a local representative as the emergency contact, as someone who will understand the severity of neighborly complaints and who can respond in an emergency within 45 minutes to an hour. Such a regulation would require STR licensees to reach out to community members.

Trustees were seemingly in favor of all the suggested regulations, especially the prospect of fire pits being banned entirely, of STR license holders being encouraged to establish strong neighborly relationships, and of protecting the availability of Nederland’s housing stock.

The Nederland Planning Commission will review the suggested regulations and offer their recommendations on Wednesday, August 30, 2023, at 7 p.m. That meeting can be attended in person at the Nederland Community Center, or online via WebEx.

The matter of amending Ordinance 798 with new STR regulations will return to the BOT agenda at a later date, as yet undetermined.

For more information go to: https://townofnederland.colorado. gov/planning-commission