Telluride makes history in Colorado short-term rental laws

Updated on May 6, 2023

The Telluride short-term rental alliance recently made history in making Colorado short-term rental laws. It all started during the Covid 19 pandemic when vacation rentals in the town of Telluride, Colorado, were sitting eerily empty in March 2020. No one knew when they could reopen. The picturesque ski town’s economy, like in many places around the world, ground to a halt amid lockdowns aimed at preventing the spread of Covid.

Exceptional Stays, a vacation rental management company with 110 luxury homes in the Telluride area, was among the businesses affected by the shutdown. For Christina Casas, founder and CEO, sitting around feeling helpless wasn’t an option.

Remote connections

She connected virtually with other lodging partners to discuss how they could mobilize and respond to the public health crisis. They met at least weekly on Zoom to discuss steps they could take to jumpstart the industry and reopen vacation rentals as safely and as quickly as possible. The key to that, they realized, was proper cleaning protocols.

Exceptional Stays contracted with vacation rental housekeeping expert Durk Johnson to develop a sanitization and disinfection protocol for short-term rentals that would allow guests to come back without fear of exposure to Covid-19. The result was the HyperClean by Exceptional Stays program, which entailed everything from minimizing face-to-face interactions to disinfecting the premises between each stay.

“That really helped us to be ready to open and go again,” said Alline Arguelles, President of Exceptional Stays. In June 2020, San Miguel County began to allow a phased-in reopening of vacation rentals and short-term rentals provided that they carried out the disinfection, sanitization, and safety measures.

Alline said the joint effort proved the value of working together as a community of vacation rental operators. What they didn’t know at the time was that mobilizing as a community would empower them to face an even bigger and more permanent threat to Telluride’s tourism economy.

Fighting damaging Colorado short-term rental laws

A year later, a small group of citizens successfully petitioned for a ballot measure that would cut down the number of vacation rental licenses in Telluride by nearly half – casting a familiar feeling of daunting uncertainty about the future of the vacation rental community.

“[The rising popularity of vacation rentals], along with all the other pressures from Covid, has created a strain within the community among some people who want to slow down the growth and pump the brakes: ‘We don’t want people in our community,’ but that’s especially devastating to have that type of sentiment in a community that runs almost primarily on visitor and guest economics,” Alline said.

Ballot Measure 300 proposed a 43% reduction in the vacation rental bed base under the premise that some of the units would consequently convert into long-term workforce housing.

“That obviously means a big reduction in our local visitor count which impacts lodging, restaurants, and retail on a very big scale,” Alline said, “but it also impacts a lot of smaller companies that I think people don’t think of, like airport shuttles, tours and activities, rental gear, nannies, and babysitters.”

Telluride alliance forms to advocate for fair Colorado short-term rental laws

The lodging group that had successfully developed the cleaning protocol for short-term rentals decided it was time to become a formal entity and challenge the ballot measure by proposing their own alternative. Calling themselves the Community Alliance for Effective Housing Solutions (CAEHS), they approached the town council to point out some of the weaknesses in the ballot measure and communicate the urgency of offering an alternative for voters.

Using data to correct misconceptions about vacation rentals

Using reports from Key Data, Exceptional Stays and other short-term rental operators were able to show the town council that many of the vacation rentals that Measure 300 would shut down were used at least part of the time by their owners as vacation homes, indicating that the homes would likely never be converted into long-term housing for the workforce. Among homes managed by Exceptional Stays, 100% of the owners stay at least part of the year in their properties, Alline said.

“So, we know for a fact that these homes are not homes that can go into a workforce rental pool because they are being used as the vacation homes that they are,” she said.

Key Data is another way that Telluride’s lodging community works together. The local tourism board, Visit Telluride, provides Key Data to all of the local lodging providers, so that everyone can share aggregated data.

“This is a great way to utilize your tourism funding to help really make smart and educated and data-driven decisions to improve business for all of your local lodgers,” Alline said.

Short-term rental alliance creates a new path with their own ballot alternative

CAEHS worked with the town council to develop the alternative Ballot Measure 2D, which the town council unanimously approved for the ballot.

2D imposes a two-year moratorium on new short-term rental licenses but doesn’t shut down any existing rentals, securing all of the jobs associated with those rentals. The measure also raises the fees for vacation rental business licenses by 100%, yielding immediate revenue to help increase the supply of affordable housing in the area.

The two-year moratorium on new licenses is intended as a pause so that the town can work with experts to analyze how to best provide more affordable housing.

Leading up to election day, CAEHS campaigned diligently for Yes on 2D (and No on 300) going door to door, holding public educational meetings, putting up signage around town, and hosting meetings in Spanish for Telluride’s Spanish-speaking residents and workers.

Making history with an avalanche of support

Ultimately, CAEHS succeeded in something perhaps no local vacation rental organization has done before: passing a pro-STR measure while simultaneously defeating an anti-STR measure on the same ballot.

Voters approved 2D 55% to 45% and voted down 300 by an even wider margin of 60% to 40%.

The unprecedented outcome illustrates the value of short-term rental operators gathering, getting to know each other, putting their heads together, and working as a community, Alline said.

“We were very fortunate that Covid had brought us together and everybody was already building great relationships,” she said. “I definitely recommend that in communities around the country. We are all super busy working in our businesses, but it is really important to build our community and create relationships so we can easily jump on a Zoom call in Covid days or get together for a quick meeting to chat about solutions, education, and outreach.”

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