Editor’s note: This story has been corrected to accurately reflect quotes from Mary Beth Miles.

New rules would allow additional leases of empty bedrooms, require nine-month local residency

Ouray County commissioners are considering sweeping changes to the county’s short-term rental ordinance, aiming to open the market to local homeowners with unoccupied bedrooms and discourage disruptive behaviors.

If passed, the proposed updates would create 15 “bedroom” short-term rental licenses. That new classification would allow full-time Ouray County residents to rent out unoccupied bedrooms in their homes. Long-term renters would not be eligible to apply for such licenses.

Those licenses would be separate from the current 100 “dwelling unit” licenses that allow residents and nonresidents to rent out entire properties. The number of dwelling unit licenses would not change.

The county would grandfather in current dwelling unit license holders who actively rent the property, and those who currently hold short-term rental licenses and own properties that serve as separate investment properties will still be able to rent them out.

The new ordinance would require applicants to live in Ouray County for at least nine months out of the year. Applicants must prove their 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.

Those applying for bedroom licenses and new dwelling unit licenses would both be subject to those stipulations.

Commissioners suggested initially offering 15 bedroom licenses to gauge demand and determine how to best enforce the new license classification. They could increase the number of available bedroom licenses by passing special resolutions.

The new ordinance would cap the total number of available bedroom licenses at 40. Commissioners would have to pass a new short-term rental ordinance for the Ouray County Land Use Department to issue more than 40 bedroom licenses.

The new ordinance would also set defined occupancy and vehicle limits to discourage overcrowding and crack down on so-called “party houses.” It would limit two occupants and one vehicle per bedroom, plus two additional occupants if the sewage system or septic tank is rated for that capacity. Trailers and offroad vehicles such as side-by-sides would not count against vehicle capacity limits as long as they fit within the property’s designated parking area.

Commissioners also informally agreed to end license transfers should a shortterm rental license holder sell their property. Ouray County’s current ordinance allows for such transfers.

Potential challenges commissioners raised included how to objectively enforce the new ordinance and homes owned by a trust or limited liability company. Homes owned by a trust or limited liability company would need to provide a page showing who the trustees are or certificate of good standing to verify the applicant’s identity. Properties that can’t demonstrate verifiable human ownership won’t receive a license.

County Planning Director Mark Castrodale told commissioners any subjectivity, such as relying on neighbors’ suspicions, would make enforcement more difficult for Land Use Department employees. Gray areas Castrodale mentioned were determining occupancy, counting household vehicle trips per day and deciding which activities at shortterm rentals require special use permits, including weddings.

The attending crowd, who overwhelm- ingly owned or operated shortterm rental properties, supported most of the commissioners’ proposals.

“I’m really impressed with how much depth you’re going into on this and I think it’s a good thing from the standpoint of landowners who’re interested in STRs (short-term rentals),” said Bob Thomas, who represented Colona landowner Craig Jackman.

Some claimed during the public comment period that many short-term rental properties in Ouray County already impose similar occupancy and use restrictions to avoid conflict with neighboring homeowners.

However, there was still some confusion and anxiety over the proposed policy changes and potential unintended consequences that could harm Ouray County’s short-term rental economy.

“It’s our livelihood. It’s where we make our money and are able to live in the destination that we so desire to. So, I hope you can give us that full vision of how we see everything. We want that all to work. We want there to be balance,” said Mountain Adventure Retreats owner Laura Benton.

Professional short-term rental property managers were also not thrilled with the proposed change requiring new dwelling unit licensees to live on the property for at least nine months out of the year, believing it could harm the industry.

“For a tourism-based economy like Ouray County, the economic impacts associated with eliminating the number of permissible short-term rentals to the extent proposed today are deep and traumatic,” said Vacation Rental Collective CEO Mary Beth Miles, whose company manages 75 short-term rental properties in unincorporated Ouray County, Ridgway and Ouray.

Miles estimated the economic impact to the community is $5.4 million annually from tourists staying in short-term rentals.

There is currently no timeline for when commissioners could vote on the proposed changes. Commissioner Lynn Padgett sought a vote and implementation by Jan. 1. County Attorney Leo Caselli said he thinks that target date is “overly aggressive” due to what he characterized as a heavy workload for county staff members.

Commissioner Jake Niece agreed, saying the board would need at least one more work session before drafting and voting on a new ordinance.

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.