Colorado Springs, Colorado Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations Colorado Springs, Colorado?

Colorado Springs has established comprehensive regulations governing short-term rentals (STRs) to balance the interests of property owners, visitors, and permanent residents. As the popularity of platforms like Airbnb and VRBO continues to grow, understanding these regulations is crucial for anyone looking to operate a successful STR business in the area. The city has implemented specific permit requirements, zoning restrictions, and operational standards that all STR operators must follow to remain compliant and avoid penalties.

Starting a Short-Term Rental Business in Colorado Springs, Colorado

Starting a short-term rental business in Colorado Springs requires careful planning and adherence to local regulations. The city has established a structured permitting process that all prospective STR operators must navigate before listing their properties.

Permit Requirements

Before operating an STR in Colorado Springs, you must obtain a Short Term Rental Permit. The application process includes several key components:

• Completing a safety self-inspection certification
• Obtaining a Sales Tax license customer ID
• Providing contact information, including a 24-hour contact phone number for the owner or property manager who can respond within one hour in case of emergencies
• Submitting proof of insurance
• Demonstrating compliance with use-specific standards for STRs
• Electing either an owner-occupied or non-owner-occupied permit
• Acknowledging that you have read and understand the rules and regulations

The permit application is reviewed by the Manager who will approve, approve with conditions, or deny the petition within ten business days after determining the application is complete.

Types of Permits

Colorado Springs offers two types of STR permits:

1. Owner-Occupied Permits: These are for properties where the owner lives in the dwelling for at least 185 days each year. These permits allow for STRs in zones where residential units are permitted.
2. Non-Owner-Occupied Permits: These permits have more restrictions. Notably, non-owner-occupied STRs are not permitted in single-family zoning districts and must be located at least 500 feet from another permitted STR unit.

Permit Duration and Transferability

The Short Term Rental Permit is valid for one year from the date of issuance and may be renewed for additional one-year periods. Importantly, the permit does not run with the property but is issued to the specific owner. This means the permit expires upon sale or transfer of the property and cannot be transferred or assigned to another individual, person, entity, or address. However, the property may be managed by a third party on behalf of the owner.

Zoning Restrictions

Colorado Springs has designated specific zoning districts where STRs are permitted:

1. In single-family zoning districts (R-E, R-1 6, R-1 9, and Single-Family PDZs), only one listing per property is allowed, which can be either the entire house or just a part of it.
2. As mentioned earlier, non-owner-occupied STRs are prohibited in single-family zoning districts and must maintain a 500-foot distance from other permitted STRs.

Density Regulations

The city has implemented density regulations to prevent the concentration of STRs in residential neighborhoods. The 500-foot buffer requirement between non-owner-occupied STRs helps maintain the residential character of neighborhoods and prevents the commercialization of residential areas.

It's worth noting that these regulations have evolved over time. In 2019, the city considered several density options, including:

1. Five-lot separation between issued permits
2. Limiting the number of permits on a block face
3. A 500-foot buffer spacing

The city ultimately adopted the 500-foot buffer requirement for non-owner-occupied STRs. However, there's no saying if this will change again in the future.

Grandfathering Provisions

When new regulations are implemented, existing permit holders are typically grandfathered in. This means that if you had a valid permit before new restrictions were enacted, you would generally be allowed to continue operating under the previous rules. However, this grandfathering does not transfer with the property upon sale, so new owners would need to comply with current regulations.

Occupancy Limits

Colorado Springs has established occupancy limits for STRs to prevent overcrowding and minimize impact on neighborhoods. While earlier regulations limited occupancy to either no more than 5 unrelated individuals or no more than 16 related individuals acting as one living unit, newer proposals have suggested limiting overnight occupancy to two occupants over the age of twelve per bedroom.

Tax Obligations

STR operators in Colorado Springs must comply with tax requirements, including:

1. City sales tax at 4.81%
2. City lodger's tax of 10.75%

Obtaining a Sales Tax license customer ID is a prerequisite for the STR permit application.

Operational Requirements

To maintain compliance and ensure a positive experience for guests and neighbors alike, STR operators should:

1. Adhere to safety and maintenance standards, including regular cleaning and functioning smoke detectors and carbon monoxide alarms
2. Respect occupancy limits
3. Implement effective noise and waste management practices
4. Display the permit number on all advertisements and listings
5. Maintain the required insurance coverage

Enforcement and Penalties

The city monitors compliance with STR regulations and conducts compliance checks to ensure operators have the necessary permits and adhere to safety codes. Violations can result in penalties, including:

1. Warnings or minimal fines for first-time violations
2. Increased fines and potential license revocation for repeated violations

Future Considerations

The regulatory landscape for STRs in Colorado Springs continues to evolve. Property owners should stay informed about potential changes to regulations that could impact their operations. For instance, in November 2019, there were discussions about potentially banning all Airbnb rentals in R-1 zoning, which would have represented a significant shift from previous policies.

Starting a short-term rental business in Colorado Springs requires careful planning, adherence to regulations, and ongoing attention to compliance. By understanding the permit requirements, zoning restrictions, and operational standards, property owners can establish successful and legally compliant STR operations that contribute positively to both the local economy and the community.

For the most current and detailed information, prospective STR operators should consult the Colorado Springs Government official regulations and consider seeking advice from legal professionals specializing in real estate and short-term rentals.

Short-Term Rental Licensing Requirement in Colorado Springs, Colorado

Operating a short-term rental in Colorado Springs requires strict adherence to the city's licensing requirements. Whether you're planning to list your property on Airbnb, VRBO, or another platform, understanding these requirements is essential for legal operation and avoiding potential penalties.

Application Process and Requirements

To obtain a Short-Term Rental Permit in Colorado Springs, property owners must submit a complete application package that includes:

1. A completed Short-Term Rental Permit Standards and Review Criteria Checklist
2. A Short-Term Rental Annual Affidavit that must be signed and notarized
3. Proof of primary residence (for owner-occupied permits) - requires two of the following:
   - Valid driver's license or State ID Card
   - Valid vehicle registration
   - Voter registration
   - Dependent's school registration
4. A safety self-inspection certification
5. A Sales Tax license customer ID
6. Contact information, including a 24-hour contact phone number for the owner or property manager who can respond within one hour in case of emergencies
7. Proof of liability insurance of at least $500,000 (can be provided through hosting platform contract in some cases)
8. Proof of compliance with use-specific standards for STRs
9. Election of either an owner-occupied or non-owner-occupied permit
10. A signed statement acknowledging that the owner has read and understands the rules and regulations for STRs

Submission Process

All required documents must be submitted via Colorado Springs' electronic submittal system. This streamlined approach allows for efficient processing and tracking of applications. The city has moved away from paper applications to improve processing times and reduce administrative burden.

Fees and Payment

The current permit fee for a Short-Term Rental license in Colorado Springs is $124.95. This fee can be paid via:

1. Cash
2. Credit card
3. Electronic check

Credit card payments can be made directly through the electronic submittal system. The fee will be invoiced once the city has received a complete application. It's important to note that this fee is non-refundable, regardless of whether the permit is approved or denied.

Application Review Timeline

Once a complete application is submitted, the Manager reviews the Short-Term Rental Permit application within ten business days. During this review, the Manager will:

• Verify all required documentation is present and accurate
• Ensure compliance with applicable standards and criteria
• Check zoning compliance (particularly important for non-owner-occupied permits)
• Verify the property isn't within 500 feet of another non-owner-occupied STR (for non-owner-occupied permits)

After review, the Manager will approve, approve with conditions, or deny the application based on the standards applicable to Short-Term Rentals and the general criteria for approval.

Permit Duration and Renewal

The Short-Term Rental Permit is valid for one year from the date of issuance. Property owners can renew their permits for additional one-year periods by submitting a renewal application and paying the renewal fee of $119. The city sends a reminder email approximately thirty days prior to permit expiration with instructions on how to renew the permit. Renewals are also completed via the electronic submittal system.

Permit Limitations and Transferability

It's crucial to understand that the Short-Term Rental Permit:

• Does not run with the property but is issued to the specific owner
• Expires upon sale or transfer of the property
• Cannot be transferred or assigned to another individual, person, entity, or address
• May be managed by a third party on behalf of the owner, but ultimate responsibility remains with the permit holder

Operational Requirements

Once licensed, STR operators must:

• Display the permit prominently within the rental unit
• Include the permit number on all advertisements and listings
• Maintain compliance with all applicable regulations
• Provide Good Neighbor Guidelines to guests
• Ensure 24/7 availability of a contact person who can respond within one hour
• Maintain weekly residential trash collection services
• Limit occupancy to 2 occupants per bedroom plus 2 additional occupants
• Not use the rental for commercial or large social events or gatherings
• Not prepare or serve meals to guests
• Utilize parking in private driveways first with overflow parking on the street where permitted

Penalties for Non-Compliance

Operating a short-term rental without a valid permit in Colorado Springs can result in significant penalties. While the search results don't specify exact fine amounts, violations of STR regulations can lead to:

• Monetary fines
• Permit suspension
• Permit revocation (particularly for repeat offenders)
• Prohibition from obtaining a new permit for up to 24 months after revocation

The city actively monitors compliance with STR regulations and conducts enforcement actions against unpermitted rentals. Property owners who have had their permits revoked due to violations cannot apply for a new permit for at least 24 months.

Zoning Considerations

It's important to note that zoning plays a significant role in determining eligibility for STR permits:

• In single-family zoning districts (R-E, R-1 6, R-1 9, and Single-Family PDZs), only one listing per property is allowed
• Non-owner-occupied STRs are prohibited in single-family zoning districts
• Non-owner-occupied STRs must maintain a 500-foot distance from other permitted non-owner-occupied STRs

Before applying for a permit, property owners should verify their property's zoning classification to determine eligibility for their desired type of STR operation.

Understanding and complying with Colorado Springs' Short-Term Rental licensing requirements is essential for legal operation. The comprehensive application process ensures that STRs operate safely and responsibly while minimizing impact on residential neighborhoods. By following these requirements diligently, property owners can establish successful and compliant short-term rental businesses in Colorado Springs.

Required Documents for Colorado Springs, Colorado Short-Term Rentals

Preparing the necessary documentation for your short-term rental application in Colorado Springs requires attention to detail and thorough preparation. The city has established specific documentation requirements to ensure all STR operators meet safety standards and regulatory compliance. Here's a comprehensive list of all required documents along with explanations of their purpose and where to obtain them.

Short-Term Rental Permit Application

The cornerstone of your STR documentation is the completed Short-Term Rental Permit Standards and Review Criteria Checklist. This document serves as your formal application and includes acknowledgment of various operational standards. You must initial each criterion to confirm your understanding and compliance with these requirements. This form is available through the Colorado Springs electronic submittal system and must be completed in full before submission.

Notarized Annual Affidavit

A Short-Term Rental Annual Affidavit must be signed and notarized as part of your application. This legal document serves as your sworn statement that all information provided is accurate and that you will comply with all STR regulations. For non-owner-occupied rentals, a specific Non-Owner Occupied Short-Term Rental Annual Affidavit is required, where you must declare under penalty of perjury that the property is not your primary residence. This can be notarized at any notary public, bank, or UPS store that offers notary services.

Proof of Primary Residence (for owner-occupied permits)

If you're applying for an owner-occupied permit, you must provide documentation proving the STR is your primary residence for at least 185 days per year. This requires submitting two of the following documents:

• Valid driver's license or State ID Card showing the property address
• Valid vehicle registration with the property address
• Voter registration listing the property address
• Dependent's school registration with the property address

Note that mail does not count as proof of residency, and city staff reserves the right to request additional proof if needed. These documents can be obtained from the Colorado Department of Motor Vehicles, County Clerk's office, or your child's school administration.

Sales Tax License Customer ID

All STR operators must obtain a Sales Tax license from the City's sales tax office and provide the customer ID with their application. This requirement ensures proper collection and remittance of applicable taxes. However, if your rental is posted exclusively on Airbnb or VRBO (and no other platforms), you may be exempt from this requirement as the City has agreements with these specific platforms. The Sales Tax license can be obtained through the Colorado Springs Sales Tax Office.

Proof of Liability Insurance

You must provide documentation showing liability insurance coverage of at least $500,000 for your rental property. This can be:

• A certificate of insurance from your insurance provider
• Documentation from hosting platforms (like Airbnb or VRBO) confirming they provide equivalent coverage through their service

This insurance protects both you and your guests in case of accidents or injuries on the property. Contact your insurance agent to obtain this documentation or check your hosting platform's terms of service for information about their liability coverage.

Proof of Listing on Hosting Platform

Include evidence that your property is listed on a hosting platform such as Airbnb or VRBO. This can be a link to your listing or the listing number. This requirement helps the city verify that your rental is being marketed appropriately and that the listing includes all required information, such as your permit number once issued.

Safety Self-Inspection Certification

The application includes a safety self-inspection certification section that you must complete. This certification confirms that your property meets basic safety standards, including:

• Visible house numbers from the street
• Properly maintained deck and stair rails
• Unobstructed exits
• Proper escape routes from basement sleeping rooms
• Fire extinguishers (ABC 2.5 lb.) within 6 feet of gas appliances
• Smoke alarms in each sleeping room and immediately outside sleeping areas
• Carbon monoxide detectors within 15 feet of sleeping rooms
• Stairs free of tripping hazards
• Unobstructed hallways

This self-certification is included in the application package and does not require a separate inspection by city officials.

Site Plan or Floor Plan

If you're renting only a portion of your dwelling unit, you must provide a site plan or floor plan identifying the specific rooms that will be rented. This helps the city understand the scope of your rental operation and ensures compliance with occupancy limits. You can create this yourself or hire a professional to draft it.

Parking Information

Documentation showing available parking for your STR guests is required. This includes a parking diagram or description verifying the location of all parking spaces available for the short-term rental. The application requires confirmation that parking in private driveways will be utilized first, with overflow parking on the street only where permitted.

Good Neighbor Guidelines Acknowledgment

You must acknowledge that you will provide Good Neighbor Guidelines to all tenants in the rental agreement and post them in a prominent location within the residence. These guidelines help ensure that guests respect the neighborhood and follow local rules. This acknowledgment is included in the application checklist.

24-Hour Contact Information

Provide the name, address, and contact information, including a 24-hour contact phone number, for the owner, property manager, or agent who can be contacted in case of emergency and respond within one hour. This person must be located within El Paso County or be a Colorado Springs resident. This information ensures that any issues with the rental can be promptly addressed.

HOA Acknowledgment (if applicable)

If your property is part of a Homeowners Association (HOA), you must acknowledge that you understand HOA covenants may be more restrictive than the City's STR regulations and that you should check with your HOA to ensure STRs are permitted. This acknowledgment is included in the application checklist.

All these documents must be submitted via Colorado Springs' electronic submittal system for processing. The city has moved to this digital system to streamline the application process and reduce processing times. By ensuring all required documents are complete, accurate, and properly submitted, you'll increase your chances of a smooth and successful STR permit application process.

Colorado Springs, Colorado Short-Term Rental Taxes

Operating a short-term rental in Colorado Springs comes with specific tax obligations that every host must understand and fulfill. These taxes contribute to local infrastructure, tourism development, and other municipal services. Proper tax compliance is not only legally required but also ensures your business operates smoothly without unexpected penalties or audits.

State and Local Sales Taxes

Short-term rental operators in Colorado Springs must collect and remit several layers of sales tax:

• State Sales Tax: Colorado imposes a state sales tax of 2.9% on short-term rental income. This tax applies to all rentals throughout the state and must be remitted to the Colorado Department of Revenue.
• El Paso County Sales Tax: As Colorado Springs is located in El Paso County, hosts must collect the county sales tax of 1.23% from their guests. This tax helps fund county-level services and infrastructure.
• City Sales Tax: Colorado Springs imposes a city sales tax of 3.07% to 3.12% (rates may vary slightly based on recent updates) on short-term rental income. This tax directly supports city services and local development projects.

The combined sales tax rate from these three jurisdictions totals approximately 7.2% to 7.25%, which must be added to the rental price charged to guests.

Lodging Taxes

In addition to sales taxes, Colorado Springs imposes specific lodging taxes on short-term rentals:

• City Lodging Tax: Short-term rental operators must collect a city lodging tax of 2% from their guests. This tax specifically supports tourism promotion and visitor services in Colorado Springs.
• Lodgers Tax: There is an additional lodgers tax of 8.25% that applies to short-term rentals in Colorado Springs. This tax is separate from the other taxes mentioned and specifically targets accommodations.
• Combined Lodging Tax Rate: When considering all applicable lodging taxes, the total lodging tax rate in Colorado Springs can reach approximately 10.75%. This significant percentage underscores the importance of accurately calculating and collecting these taxes from guests.

Tax Collection and Remittance Process

To properly handle these tax obligations, short-term rental hosts in Colorado Springs must:

1. Obtain a Sales Tax License from the Colorado Department of Revenue
2. Register with the City of Colorado Springs for local tax collection
3. Collect all applicable taxes from guests
4. File tax returns and remit collected taxes according to required schedules

It's worth noting that some hosting platforms like Airbnb and VRBO may collect and remit certain taxes on behalf of hosts. However, hosts remain ultimately responsible for ensuring all tax obligations are met. If you list exclusively on platforms that have tax collection agreements with Colorado Springs, you may be exempt from obtaining a separate Sales Tax license, but you should verify this with city officials.

Tax Deductions and Write-offs for Short-Term Rental Operators

While tax obligations can seem burdensome, short-term rental operators in Colorado Springs can benefit from numerous tax deductions that can significantly reduce their overall tax liability:

Property-Related Deductions

1. Mortgage Interest: If you have a mortgage on your rental property, the interest paid is generally deductible against your rental income.
2. Property Taxes: The property taxes you pay on your short-term rental are deductible business expenses.
3. Depreciation: You can recover the cost of your rental property through depreciation deductions over 27.5 years (the recovery period for residential rental properties). This non-cash deduction can substantially reduce your taxable rental income.
4. Property Insurance: Premiums paid for insurance coverage on your rental property are fully deductible.

Operational Expense Deductions

1. Cleaning and Maintenance: Fees paid for cleaning services between guest stays and regular maintenance are deductible business expenses.
2. Utilities: Expenses for electricity, gas, water, sewer, internet, and cable TV services for your rental property are deductible.
3. Furnishings and Supplies: The cost of furniture, appliances, and household supplies used in your rental can be deducted, either through depreciation or, in some cases, as an immediate expense.
4. Marketing and Advertising: Costs associated with promoting your rental, including professional photography, listing fees, and advertising expenses, are deductible.
5. Property Management Fees: If you use a property management service, these fees are deductible business expenses.
6. Travel Expenses: If you travel to your rental property for maintenance or management purposes, these expenses may be deductible. This includes mileage, airfare, and accommodations if the primary purpose of the trip is for business.

Section 179 Deductions

The Section 179 deduction allows short-term rental operators to deduct the full cost of qualifying property in the first year rather than depreciating it over several years. This can include appliances, furniture, and certain improvements to the property. To utilize this deduction, the asset must be purchased and put into service between January 1 and December 31 of the filing tax year.

Cost Segregation Studies

A cost segregation study can identify components of your rental property that can be depreciated over shorter periods (5, 7, or 15 years) rather than the standard 27.5 years for residential rental property. This accelerated depreciation can provide significant tax savings in the early years of ownership.

Important Considerations for Tax Deductions

To maximize your tax benefits while remaining compliant, keep these points in mind:

1. Personal Use Limitations: If you use your rental property personally, you can only deduct expenses proportional to the rental use. Personal use triggers Section 280A limitations, which can significantly reduce your available deductions.
2. Rental to Family or Friends: Renting to family members or at discounted rates to friends counts as personal use days, which can limit your deductions.
3. Record Keeping: Maintain detailed records of all income and expenses related to your short-term rental. Good documentation is essential for supporting your deductions in case of an audit.
4. Professional Assistance: Consider working with a tax professional who specializes in real estate investments to ensure you're taking advantage of all available deductions while remaining compliant with tax laws.

By understanding both your tax obligations and potential deductions, you can effectively manage the tax aspects of your short-term rental business in Colorado Springs, potentially saving thousands of dollars annually while maintaining full compliance with local and state regulations.

Colorado Wide Short-Term Rental Rules

Colorado takes a decentralized approach to short-term rental regulation, with no comprehensive statewide licensing framework. Instead, the state delegates regulatory authority to individual counties and municipalities, creating a patchwork of rules that vary significantly across different jurisdictions. This local control approach allows communities to tailor regulations to their specific needs and concerns, but it also creates complexity for property owners operating in multiple locations.

State Legislative Framework

While Colorado lacks a unified statewide licensing system for short-term rentals, the state legislature has enacted some laws that affect the regulatory landscape:

House Bill 23-1287, approved by the Governor on June 5, 2023 and effective as of August 7, 2023, clarifies the authority of county commissioners regarding short-term rentals. This legislation:

1. Defines short-term rentals as properties rented for less than 30 consecutive days
2. Explicitly excludes hotel units from county short-term rental regulations
3. Authorizes counties to require owners or their agents to include rental license or permit numbers in online listings
4. Empowers counties to demand vacation rental services (formerly called "internet hospitality services") remove listings for properties with suspended or revoked licenses, or those operating without required permits
5. Requires counties to provide written verification that hotel units located in buildings with lodging units are exempt from short-term rental ordinances

This legislation represents one of the few instances where Colorado has established statewide parameters for short-term rental operations, though it primarily focuses on clarifying county authority rather than imposing direct regulations on operators.

State Tax Requirements

While licensing is handled locally, Colorado does impose statewide tax obligations on short-term rental operators:

1. All short-term rental operators must register with the Colorado Department of Revenue for tax purposes
2. Operators must collect and remit state sales tax (2.9%) on all rental income
3. Registration can be completed online through the Colorado Department of Revenue's website

This tax registration requirement applies universally across the state, regardless of local licensing rules. Many hosting platforms like Airbnb and VRBO now collect and remit state sales taxes automatically, but operators remain ultimately responsible for ensuring compliance.

Absence of Statewide Operational Standards

Unlike some states that establish minimum safety standards or operational requirements for short-term rentals, Colorado has not enacted statewide regulations regarding:

1. Property safety inspections
2. Insurance requirements
3. Occupancy limits
4. Noise restrictions
5. Parking requirements

These aspects of short-term rental operation are left entirely to local jurisdictions to regulate as they see fit. This means that Colorado Springs hosts must primarily focus on city-specific regulations rather than statewide requirements.

Impact on Colorado Springs Hosts

For short-term rental operators in Colorado Springs, the lack of comprehensive statewide regulations means that local ordinances take precedence. Colorado Springs hosts should be aware that:

1. They must comply with all Colorado Springs-specific licensing requirements
2. State tax registration is mandatory, regardless of local permits
3. Changes to state law, such as HB23-1287, may affect how El Paso County interacts with vacation rental platforms regarding their listings
4. If operating properties in multiple Colorado jurisdictions, separate licenses may be required for each location

Future State-Level Developments

The regulatory landscape for short-term rentals in Colorado continues to evolve. While the state has historically favored local control, increasing concerns about housing affordability and community impacts may lead to more state-level intervention in the future. Colorado Springs hosts should stay informed about:

1. Pending legislation that might establish minimum statewide standards
2. Changes to tax collection and remittance requirements
3. Potential state-level restrictions on local regulatory authority

For now, Colorado Springs hosts must navigate a regulatory environment where local rules predominate, with only minimal state-level requirements related to tax registration and the parameters established by HB23-1287 regarding county authority over vacation rental platforms.

Understanding this state-local dynamic is crucial for Colorado Springs short-term rental operators seeking to maintain compliance while running successful rental businesses. While focusing primarily on local regulations, hosts should also monitor developments at the state level that could impact their operations in the future.

Does Colorado Springs Strictly Enforce STR Rules?

Colorado Springs presents a complex picture when it comes to short-term rental enforcement. While the city has established comprehensive regulations, the actual enforcement of these rules has been inconsistent, creating a regulatory environment that many operators find navigable despite increasing restrictions.

The enforcement of STR regulations in Colorado Springs can best be described as spotty and complaint-driven rather than proactive. According to discussions on Reddit, some users have noted that "We already have pretty strong laws here (STRs must be permitted and you can't have two within 500ft of each other)… But nobody enforces them." This sentiment reflects a common perception among local hosts that while the rules exist on paper, the city lacks the resources or will to consistently enforce them.

Colorado Springs has progressively tightened its STR regulations over time. In December 2019, the city passed significant restrictions banning all new non-owner-occupied short-term rentals in R-1 or PUD zoning, while implementing a 500-foot buffer requirement between non-owner-occupied STRs in other zones. This represented a major shift from the city's previously more permissive stance.

Despite these restrictions, existing permitted STRs were grandfathered in, allowing those who were already operating legally to continue doing so. This grandfathering provision has created a two-tier system where established operators can continue while new entrants face significant barriers.

The gap between regulation and enforcement in Colorado Springs creates a situation where, despite increasingly strict rules, the city's actual STR landscape includes many operators who function outside the regulatory framework. This disconnect between policy and practice defines the current state of STR enforcement in Colorado Springs – strict on paper but inconsistent in reality.

For prospective STR investors, this means Colorado Springs should be approached with caution. Those seeking to operate legally will face significant barriers to entry for non-owner-occupied rentals, while those willing to risk operating without proper permits may find enforcement lax but unpredictable. The safest approach remains purchasing properties with existing grandfathered permits, though these naturally command a premium in the market.

How to Start a Short-Term Rental Business in Colorado Springs, Colorado

Starting a short-term rental business in Colorado Springs requires careful planning, adherence to local regulations, and strategic implementation. The following comprehensive step-by-step guide will help you navigate the process successfully.

Research Colorado Springs STR Regulations

Begin by thoroughly researching Colorado Springs' specific short-term rental regulations. Understand the distinction between owner-occupied and non-owner-occupied rentals, as this significantly impacts where you can operate. Non-owner-occupied STRs are not permitted in single-family zoning districts and must be located at least 500 feet from another permitted STR in other zones. Familiarize yourself with occupancy limits, parking requirements, and safety standards to ensure your property can meet all necessary criteria.

Tip: Contact the Colorado Springs Planning Department directly with specific questions about your property's zoning classification and eligibility for STR operation. This proactive approach can save you significant time and money by identifying potential regulatory obstacles early.

Choose an Appropriate Property

Select a property that complies with Colorado Springs' STR regulations and has strong rental potential. Consider factors such as proximity to tourist attractions, accessibility, neighborhood safety, and amenities. If you're planning a non-owner-occupied rental, verify that the property is not in a single-family zoning district and is at least 500 feet from other permitted STRs. For owner-occupied rentals, ensure you're willing to live at the property for at least 185 days per year.

Tip: Work with a real estate agent who specializes in investment properties and has experience with short-term rentals in Colorado Springs. They can help identify properties that meet regulatory requirements while offering strong rental potential.

Register Your Business with the Colorado Secretary of State

Establish a legal business entity for your short-term rental operation by registering with the Colorado Secretary of State. While you can operate as a sole proprietorship, forming an LLC provides liability protection that separates your personal assets from your business. Registration can be completed online for a small fee, typically around $50.

Tip: Consider consulting with an attorney or accountant to determine the most advantageous business structure for your specific situation. An LLC offers liability protection, while an S-Corporation might provide tax benefits depending on your income level and other factors.

Obtain a Federal Employer Identification Number (EIN)

Apply for an EIN from the Internal Revenue Service, especially if you've formed an LLC or corporation. This tax identification number is necessary for filing business tax returns and opening business bank accounts. Even if you're operating as a sole proprietorship, having an EIN can help keep your business and personal finances separate.

Tip: You can apply for an EIN online through the IRS website at no cost. The process takes just a few minutes, and you'll receive your EIN immediately upon completion.

Apply for a Short-Term Rental Permit

Submit a complete application for a Short-Term Rental Permit through Colorado Springs' electronic submittal system. The application requires:

1. A completed Short-Term Rental Permit Standards and Review Criteria Checklist
2. A notarized Short-Term Rental Annual Affidavit
3. Proof of primary residence (for owner-occupied permits)
4. A safety self-inspection certification
5. Contact information, including a 24-hour emergency contact
6. Proof of liability insurance (minimum $500,000 coverage)
7. Payment of the $119 permit fee

Tip: Prepare all required documents before starting the application process to streamline submission. Double-check that all forms are properly completed and notarized where required to avoid delays in processing.

Obtain a Sales Tax License

Register for a Sales Tax License through the Colorado Department of Revenue to collect and remit applicable taxes. Colorado Springs STR operators must collect state sales tax (2.9%), El Paso County sales tax (1.23%), city sales tax (approximately 3.07-3.12%), and lodging taxes (approximately 10.75% total). Note that if you list exclusively on platforms like Airbnb or VRBO that have tax collection agreements with Colorado Springs, you may be exempt from obtaining a separate Sales Tax license.

Tip: Set up a separate bank account for tax collections to ensure you have funds available when it's time to remit taxes. Consider using accounting software specifically designed for short-term rentals to track income and tax obligations.

Secure Proper Insurance Coverage

Obtain comprehensive insurance coverage specifically designed for short-term rentals. While Colorado Springs requires minimum liability coverage of $500,000, consider additional coverage options such as property damage, business interruption, and contents insurance. Standard homeowner's policies typically don't cover commercial use of your property, so specialized STR insurance is essential.

Tip: Shop around for insurance policies specifically designed for short-term rentals. Companies like Proper Insurance, Safely, and Steadily offer specialized coverage for STR operators that fills gaps left by traditional homeowner's policies.

Prepare Your Property for Guests

Make necessary improvements and furnish your property to create an appealing, comfortable, and safe environment for guests. Ensure compliance with safety requirements including:

1. Visible house numbers from the street
2. Properly maintained deck and stair rails
3. Unobstructed exits
4. Fire extinguishers near gas appliances
5. Smoke alarms in each sleeping room and outside sleeping areas
6. Carbon monoxide detectors within 15 feet of sleeping rooms

Tip: Consider hiring a professional interior designer or property stager to maximize your property's appeal. High-quality photos of a well-designed space can significantly increase booking rates and allow for premium pricing.

Create House Rules and Good Neighbor Guidelines

Develop comprehensive house rules and Good Neighbor Guidelines that align with Colorado Springs regulations. These should address noise restrictions, parking requirements, trash disposal, maximum occupancy, and emergency procedures. Colorado Springs requires that Good Neighbor Guidelines be posted prominently in your rental and included in all rental agreements.

Tip: Create a professional welcome book that includes house rules, Good Neighbor Guidelines, emergency contact information, local attractions, and recommendations for restaurants and activities. This enhances the guest experience while ensuring they understand and follow your rules.

List Your Property on Rental Platforms

Create compelling listings on platforms like Airbnb, VRBO, and other booking sites. Include high-quality photos, detailed descriptions, accurate pricing, and your permit number (required by Colorado Springs regulations). Consider using a channel manager if listing on multiple platforms to avoid double bookings.

Tip: Invest in professional photography to showcase your property. Studies show that listings with professional photos receive significantly more bookings and can command higher rates. Be sure to include your permit number in all listings to comply with Colorado Springs requirements.

Implement an Effective Management System

Establish systems for guest communication, check-in/check-out procedures, cleaning, maintenance, and emergency response. Colorado Springs requires that a contact person be available 24/7 and able to respond within one hour to address any issues. Consider whether you'll manage the property yourself or hire a professional management company.

Tip: Utilize property management software like Guesty, Hostfully, or Lodgify to automate guest communications, manage cleaning schedules, and track financial performance. These tools can significantly reduce your workload while improving the guest experience.

Maintain Accurate Financial Records

Set up a comprehensive bookkeeping system to track income, expenses, occupancy rates, and tax obligations. Proper financial management is essential for tax compliance and business optimization. Consider working with an accountant familiar with short-term rental businesses to maximize deductions and ensure compliance.

Tip: Use accounting software like QuickBooks or specialized STR financial tools to track income and expenses. Set aside a percentage of each booking for taxes, maintenance reserves, and eventual furnishing replacement to ensure financial stability.

Monitor and Adapt to Regulatory Changes

Stay informed about changes to Colorado Springs' STR regulations by regularly checking the city's website, attending community meetings, and joining local host associations. The regulatory landscape for short-term rentals continues to evolve, and staying ahead of changes is crucial for long-term success.

Tip: Join local short-term rental owner groups on social media platforms like Facebook to network with other hosts and stay informed about regulatory developments. These communities often share valuable insights about working with city officials and navigating compliance challenges.

By following these comprehensive steps and implementing the suggested tips, you'll be well-positioned to establish a successful and compliant short-term rental business in Colorado Springs. Remember that attention to detail in the planning and setup phases will pay dividends through smoother operations and fewer regulatory issues down the road.

Who to Contact in Colorado Springs, Colorado about Short-Term Rental Regulations and Zoning?

Navigating the regulatory landscape for short-term rentals in Colorado Springs requires connecting with the right municipal departments and community resources. Having direct access to official contacts ensures you receive accurate, up-to-date information about permits, zoning restrictions, and compliance requirements. Here's a comprehensive guide to the key contacts and resources available to short-term rental operators in Colorado Springs.

City Planning Department

The primary point of contact for short-term rental regulations in Colorado Springs is the Planning Department. This department oversees zoning regulations, permit applications, and compliance with STR ordinances.

1. Phone Number: (719) 385-5905
2. Fax Number: (719) 385-5167
3. Email: LURPlanningInfo@coloradosprings.gov
4. Location: 30 S. Nevada Avenue, Suite 105, Colorado Springs, CO 80903

For specific short-term rental inquiries, the city has established a dedicated contact channel:

STR-Specific Email: shorttermrentals@coloradosprings.gov

El Paso County Planning and Community Development

For properties in unincorporated El Paso County areas surrounding Colorado Springs, contact:

1. Phone Number: (719) 520-6300
2. Email: plnweb@elpasoco.com
3. Hours: Monday – Friday, 7:30 a.m. – 4:30 p.m.
4. Location: 2880 International Circle, Suite 110, Colorado Springs, CO 80910

Zoning Information Resources

For specific questions about zoning classifications and how they affect your ability to operate a short-term rental:

1. Planner of the Day: (719) 520-6944
2. Email: dsd-pod@elpasoco.com
3. Response Time: Allow 24-48 hours for a return call

Planning Commission

The Planning Commission reviews development applications and proposals, some of which may impact short-term rental regulations:

1. Staff Liaison: Mellisa Wutzke
2. Email: mellisa.wutzke@coloradosprings.gov
3. Phone Number: (719) 385-5608
4. Meeting Time: 2nd Wednesday of each month at 9:00 a.m.
5. Meeting Location: Regional Development Center (RDC), 2880 International Circle

When contacting any of these resources, be prepared with specific questions about your property's zoning classification, the type of STR you plan to operate (owner-occupied vs. non-owner-occupied), and any particular compliance concerns you may have. Officials can provide more helpful guidance when presented with specific scenarios rather than general inquiries.

Remember that regulations can change, so it's advisable to verify current requirements directly with official sources before making significant investments or operational decisions regarding your short-term rental property in Colorado Springs.