County may evenly split 100 licenses between residents, non-residents

Ouray County commissioners last week informally agreed to evenly split the county’s 100 short-term rental licenses between properties owned by Ouray County residents and non-residents alike.

The proposed changes are the latest in Ouray County’s months-long effort to revise its short-term rental ordinance for the first time since the county initially adopted the statute in 2018.

Commissioners and county officials said they would examine grandfathering in non-Ouray County residents’ licenses if they’ve rented out their property at least 30 days in the last year.

That number doesn’t include 25 initial “bedroom” licenses the county plans to create to allow full-time Ouray County residents to rent out unoccupied bedrooms. Commissioners last month proposed initially offering 15 bedroom licenses but decided offering 25 would create less work in the future. Long-term renters wouldn’t be eligible to apply for those licenses.

The new ordinance would require owner-occupied and bedroom license applicants to live in Ouray County for at least nine months out of the year. The ordinance would also require proof of residency through voter registration, a driver’s license, state identification card or passport tied to the property’s address and self-affirmation under penalty of perjury.

Permit holders must rent out their unoccupied bedroom or dwelling for at least 30 days per year and advertise it for at least 60 days per year to be eligible to reapply.

Commissioners could increase the number of available bedroom licenses through resolutions, with the proposed ordinance allowing for a maximum of 40 bedroom licenses eventually. Commissioners would need to pass a new short-term rental ordinance for the county to offer more than 40 bedroom licenses.

The limit on non-bedroom licenses would stay at 100, but the change proposed by commissioners would be the first time the county attempts to differentiate between properties owned by county residents and non-county residents.

By ensuring non-Ouray County residents can continue owning and operating short-term rentals, county officials said they hoped to avoid litigation that has embroiled similar short-term rental ordinance changes in other parts of the country.

That includes changes New Orleans made to its shortterm rental ordinance in 2019, which limited short-term rental permits in residential areas to property owners who lived on the property and had a homestead exemption.

The U.S. 5th Circuit Court of Appeals last year ruled that provision violated the U.S. Constitution’s commerce clause, which prohibits discrimination against interstate commerce.

However, there are unresolved lawsuits surrounding short-term rental ordinance changes in Colorado over similar changes, primarily Summit County. That lawsuit, brought forth by Todd Ruelle and Summit County Resort Homes, Inc., against the Summit County Board of County Commissioners, alleges a “blunderbuss” response and “unlawful” ordinance changes.

Issues plaintiffs included in the lawsuit were limits on bookings, caps on available licenses, prohibitions on transferring licenses to home buyers, occupancy limits, perceived discrimination against out-of-state owners and requirements to have 24/7 management available to address neighbor complaints.

Other changes commissioners discussed included preventing short-term rental properties from renting to multiple parties at the same time, citing some license holders listing multiple properties on multiple websites simultaneously. Caselli told commissioners the county’s land use code defines a property with multiple separate rentable spaces as having a commercial use.

“There are things that are a little more vague, like guest ranches, as far as taxation status. But once we start getting into something that looks like a motel or hotel and quacks like a motel, then it needs to be taxed like a motel, period,” Caselli said.

The classifications and number of short-term rental licenses are not yet finalized and would require commissioners to include them in a passed ordinance later this year or next year. Commissioner Jake Niece said those proposed changes likely wouldn’t take effect until 2025 at the earliest.

For some in the near-capacity crowd, continued limits on the number of short-term rental licenses the county offers were unacceptable.

In an occasionally fiery speech, Mountain Adventure Retreats owner Laura Benton decried commissioners’ plan to continue limiting the number of licenses the county offers. Benton said while Ouray County, the town of Ridgway and the city of Ouray currently offer 300 combined short-term rental licenses, San Miguel County offers 3,000.

Benton also underscored the economic impact shortterm rentals have on Ouray County’s economy, claiming short-term renters have an outsized impact on the local economy.

“You’re taking set revenue out of our pocket. This is my livelihood,” Benton said to Niece, slamming her hand on the podium.

Ouray Ice Park Executive Director Peter O’Neil, who rents out his house May through September when he and his wife live in Denver, told commissioners shortterm rentals have a year-round economic impact in Ouray County.

He said the 24,000 climbers who visited the Ouray Ice Park last year injected $18.7 million into Ouray County’s economy, and that the area’s hotels couldn’t accommodate all those climbers.

“Talk to people who have been in town 40 years ago. The sidewalks in Ouray were rolled up, nothing happened,” O’Neil said. “I don’t understand what’s not working and why the changes are being proposed because hopefully there are more people coming to town just in the winter.”

Others in attendance welcomed the ability of short-term rentals to help bring in additional income, but questioned some license holders’ motives, saying the presence of short-term rentals could damage neighborhoods’ character.

“Using the license as a quasi-residential rental is a really wonderful financial opportunity for property owners,” said Colona landowner Craig Jackman. “But when a property owner chooses to use it in a commercial way for events it begins to look like they’re motivated by something else, and they may not care at all about the increased impacts to their neighbors.”

Daniel Schmidt is a journalist with Report for America, a national service program which helps boost reporting resources in underserved areas. To make a tax-deductible donation to fund his work, contact erin@ ouraynews. com.