Telluride, Colorado's New Annual Fees for Short-Term Rental Hosts

Telluride, Colorado, is lifting its moratorium on new short-term rental licenses and introducing a $857 annual per-bedroom regulatory fee for property owners who rent to vacationers. This move is aimed at boosting revenue for housing initiatives and alleviating housing shortages.

A recent study by Economic and Planning Systems in Telluride offered various per-bedroom regulatory fee options to help address the impacts of short-term rentals and support affordable housing. 

_{A Vrbo listing in Como, Colorado. Source: Vrbo}

One of the options included a 100% mitigation rate, charging $2,608 per short-term rental bedroom to generate $3.9 million for affordable housing, and a 20% mitigation rate, which would levy a $522 fee per bedroom, generating $778,000. The council chose a rate targeting about $1.5 million annually for affordable housing.

The Telluride council introduced three tiers of short-term rental licenses exempting residents who rent for under 29 days a year from the new per-bedroom regulatory fees, while "classic" license holders will pay the full fees.

Telluride now joins three other communities in adopting regulatory fees to fund affordable housing. Breckenridge charges $756 per bedroom. Pagosa Springs charges $500 a bedroom. 

The town is also mulling a ballot measure for 2024, seeking voter approval for an excise tax on vacation rental homes. Additionally, Colorado Governor Jared Polis is exploring legislation to categorize short-term rental properties under commercial lodging properties for tax purposes, arguing that they should be taxed at commercial rates rather than residential property tax rates.