Keystone approves short-term rental regulations, but more changes could be on the horizon

The Keystone City Council voted unanimously June 25 to adopt short-term rental licensing regulations that will go into effect this fall.

The legislation largely maintains the policies currently in place by Summit County officials, meaning short-term rental property owners will not see any major changes to how they currently operate.

Under legislation passed by county officials last year, Keystone was designated a “resort overlay zone” along with Copper Mountain, meaning both areas were exempt from licensing and reservation limits that applied to rental properties in other parts of unincorporated Summit County.

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However, council members left the door open for further amendments to the rules following a public awareness campaign they plan to launch next year.

“We plan to have a completely open process with all stakeholders who will review, based on all available information, and make recommendations to council regarding potential changes to the (short-term rental) regulations,” Mayor Ken Riley said.

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An ordinance approved by council members allows the city to take over administration of about 2,000 Keystone short-term rental properties after the current renewal period ends on Sept. 30.

This will allow the clerk to oversee applications for short-term rental licenses as well as enforce any code violations, while the city manager or other designated city official will be responsible for hearing appeals of decisions to deny applications.

The city is also trying to shorten the response time to code violations by contracting with another outside firm currently used by the county.

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City staff say the new service will provide a 24-hour hotline that can be contacted in the event of a problem, such as a trash, parking or noise violation. Short-term rental operators will be required to resolve the issue within an hour of being notified by the agent, who has the ability to escalate the enforcement response by contacting the owner or property manager several more times before escalating the issue to city staff.

The only other major change for short-term rental owners will be the elimination of a 2% lodging tax that was imposed on unincorporated areas of the county last year. The tax, which was approved by voters in 2022, will not apply to the new city starting in July.

During the June 25 council meeting, several community members and Keystone residents spoke about the need for an open and transparent process to inform the need for action if and when the city decides to make further regulatory changes.

In recent years, short-term rental regulations have become a flashpoint in the county, with local officials passing a series of new rules aimed at easing the impact of vacation rentals on neighborhoods and long-term housing. At the county level, annual reservation limits have drawn criticism from some short-term rental owners who say the rules make it harder for them to keep their homes.

Council member Aaron Parmet said he understands the need for community input when crafting future short-term rental policy, adding, “We love (short-term rentals) because it’s a driver that helps our community function. We also know it has an impact on society.”

Council member Carol Keer, who pushed to amend the city’s short-term rental ordinance during the June 11 meeting to include language outlining the council’s intent to engage in community outreach, said she no longer believes the amendment is necessary after council members made a clear commitment to the issue.

“We want to take our time, be thoughtful and be as participatory as possible as we develop any amendments or changes to this policy,” Keer said, adding: “I don’t know if we’ll change (the policy) or not.”
A frequently asked questions page about Keystone’s current short-term rental policy can be found on the city’s website at Keystone.Colorado.gov/short-term-rentals.