Pitkin County commissioners at a work session Tuesday asked for additional information about proposed changes to the county’s short-term rental regulations that would make more properties eligible for a license, while implementing new STR caps tailored to different areas.
“There are negative impacts that any guest brings to a community. We recognize that. There are also positives,” Andrew Knudtsen, who works for the consulting firm Economic & Planning System (EPS), told the board of county commissioners Aug. 18. “On the whole, we think the program will be balanced nicely with the recommendations that we are moving through.”
County staff on Aug. 13 released a “Short-Term Rental Impact Study” prepared by EPS. The report, which has been underway for about a year, analyzed existing STR conditions, neighborhood and environmental impacts through a series of surveys, community events and data. The study recommends major changes to the county’s program, including scrapping the current rental-history requirement, which limits STR license eligibility to properties that can prove they were used as an STR between 2017 and 2022, in favor of a system that would cap the number of STR permits by geographic zone.
Commissioners showed an interest in continuing the conversation to learn more about what the revised program would look like and how the lottery and the caps would work before discussing potential code amendments.
“I feel like we’re here to try to identify how to solve for the problem of the 2017 to 2022 rule, right? I feel like this is a step in the right direction,” Commissioner Ted Mahon said. “It’s interesting to talk about 73 short-term rentals [in Pitkin County] when there is 2,300 in the city of Aspen and Snowmass. … We’re a pretty small player in the whole game here. I do think it’s worthwhile, and the more I hear about the lottery, the more interested I am in that.”
Instead of the current tiered system that breaks down STRs by the number of nights a property can be rented, the updated program would establish two permit types for most of the county and one specific to Redstone. The capped STR-Type 1, or “general,” permit would allow up to 120 rental nights per year, while an STR-Type 2, or “low intensity,” permit, which would be left uncapped, would be limited to owner-occupied properties with no more than 30 rental nights per year. Redstone would maintain its own unique regulations and permit type (STR-R) allowing 180 nights a year.
Proposed changes would also reduce licensing fees, and consultants recommended that the county pursue a lodging tax of up to 6% that would apply to STRs and traditional hotels.
The changes are aimed in part at disincentivizing what has emerged as a workaround to local STR permit requirements, where property managers and renters sign leases for more than 30 days when, in fact, the renter intends to occupy the property for fewer than 30 days (STRs are defined as rentals of less than 30 days).
The recommendations are intended to maintain regulations that have had positive outcomes, such as prohibiting vacation rentals in the most remote areas of the county, while allowing more homeowners to benefit from extra income earned by renting their property and mitigating what consultants have identified as the highest intensity impacts of STRs on the community.
“During the analysis conducted for this study, it became apparent that the standards for historic use may be overly restrictive,” according to the report. “There are some community members who would benefit from the revenue, which would enable them to remain locally invested in the community. … The 2017-2022 window will grow more out of date over time, meaning as properties sell and some of the new owners cease STR operations, the inventory will dwindle.”
Aspen Journalism last month reported that the number of STR permits in unincorporated Pitkin County dropped 29% between April 2023 and this past April, from 111 to 79 STR licenses, and down from an estimated 206 STR properties before the licensing program took effect.
The county began regulating STRs in 2022 with a tiered system — “seasonal” permits, allowing property owners to rent for 61 to 120 nights per year, “limited” permits for 21 to 60 rental nights and “otherwise limited” permits for up to 20 rental nights. Properties in Redstone’s Village Commercial Zone District can rent up to 180 nights. Only properties with proof of at least one rental night between May 11, 2017, and May 11, 2022, are currently eligible to the program.
STR application fees are based on the 2022 valuation of the property and the number of nights that applicants want to rent their property. The 2022 valuation is multiplied by 0.05% (otherwise limited), 0.06% (limited) or 0.07% (seasonal). The owner of a $4 million property, for example, would need to pay between $2,000 and $2,800 in application fees each time they renew their annual permit.
EPS recommends replacing the current fee system with a flat fee of $400 plus $200 per bedroom for STR-Type 1 and STR-R and a flat fee of $200 for STR-Type 2. “While the current approach has the advantage of scaling with more expensive homes, it is important to recognize that fees must, by definition, be set based on the resources required of county staff to provide a service,” according to the impact study. “A flat licensing fee [would] generate revenue equal to the costs to administer the STR program.”
EPS also recommends that new STR licenses be distributed through a lottery that would limit real estate speculation. “There are investors that will acquire homes because the net operating income can be substantial,” Knudtsen said.
The report maintains that STR licenses should remain nontransferable when a property is sold and suggests expanding the validity of STR license to two years instead of the one-year license used now. “The current practice of a one-year license and a rolling application period results in the licensed STR properties constantly moving in and out of the licensing program,” according to the study.
Geographic caps
The study suggests setting up geographic caps based on master plan area (MPA) boundaries in order to mitigate intensity and preserve community character. The goal is to direct most STR activity to areas with greater levels of services or access, such as Starwood, Redstone and the area defined as within the Aspen urban growth boundary, while keeping it lower in more-rural areas.
“There’ll be a cap by MPA and as availability occurs [when a property with an STR license sells, for example] … , applicants can apply for and staff would run, either on a quarterly basis or biannual — that’s a detail we need to refine — a lottery for that jurisdiction,” Knudtsen said, adding that staff will then review selected applications. Once approved, applicants won’t have to go through the lottery process again but would still need to renew their permit every year. Properties with current STR permits would be grandfathered in and could skip the lottery.
Currently, STRs represent about 1.8% of all residential parcels across unincorporated Pitkin County, according to EPS, which suggests three different caps, ranging from 1% to 2% of the area’s residential properties for the most rural areas with limited access to services and infrastructure (such as Maroon and Castle creeks and the upper Fryingpan Valley) to 5% to 6% for the semi-urban or semi-rural areas with better access, such as Redstone, Starwood and the Aspen UGB. STRs will remain prohibited in Rural and Remote and the Transition 1 and 2 zone districts.
The study expects to see a slight increase in the number of STRs for Redstone, Starwood and Aspen UGB, while little to no change in STR numbers is expected for the Crystal River Valley outside of Redstone, Emma, Snowmass Creek, Brush Creek, Owl Creek, Woody Creek and Capitol Creek.
“It is likely that the total number of STR licenses in the county would increase modestly, perhaps [10% to 20%], if this system were implemented,” the report noted, with the largest increase being in the Aspen UGB. The study expects that this increase would also include properties that are currently renting for more than 30 days but are actually used as vacation rentals.
Commissioner Patti Clapper said some people may struggle with the idea that a property in their neighborhood that wasn’t previously used as an STR may become an STR under the proposed system. “That’s going to be the hard pill for people to swallow,” she said.
Community Development Deputy Director Nicole Rebeck-Stout replied to Clapper’s concerns by saying that all these recommendations work as a system. “All of the issues that maybe a neighbor is a little uncertain about that new use happening next door, I feel like we’ve really plugged those holes with these other regulations in terms of application requirements, enforcement and ongoing monitoring to assure that community character [remains] intact,” she said.
Minimizing negative impacts
Monthly leases that function as STRs are one of the main negative impacts identified in the study, as they circumvent the county’s program requirements. STRs are defined as rentals of less than 30 days, but some STR operators content with no more than one booking per month draw up 30-plus day leases, meaning the properties need not be covered by an STR permit. According to the study, these rentals also contribute to community impacts while not being regulated and not taxed. The report adds that ineligibility for an STR license due to a lack of prior rental history is one reason that some properties engage in this practice.
“We know that people are using that as a loophole,” County Manager Kara Silbernagel said. ”Those that are using that as a loophole would probably be incentivized [to apply for an STR license] if they were doing two two-week rentals versus one two-week rental a month.”
The lack of oversight on these properties precludes the county from tracking STR activity and generating revenue commensurate with the STRs that are licensed.
About 80% of the 79 licensed STR properties in Pitkin County are single-family homes, according to Aspen Journalism’s July analysis, and 28% of the inventory are homes valued at more than $10 million each. The EPS study identified three different markets in unincorporated Pitkin County: a lower-end market reaching up to $1,500 a night and representing about one-third of the properties; a middle market making up half of the properties with nightly rates ranging from $1,500 to $10,000; and a higher-end market, representing one in six properties, that can go as high as $60,000 a night. Twenty-two properties had rental rates exceeding $10,000 a night during New Year’s week of 2025-26, a preliminary EPS study noted.
“Pitkin County holds a unique market position among all mountain resort communities and commands a premium for guest accommodations. The corresponding guest expenditures, and resulting fiscal revenues, benefit local business and the county,” according to the recently released impact study. “If the program can be managed well, and if impacts are adequately mitigated, STRs can be net positive for residents, businesses and the county as a whole.”
The report found that STRs do not necessarily diminish housing supply for locals, given that many are second homes and would mostly be left empty if they weren’t used as STRs. But STRs drive employment from a wide range of businesses, including dining, housekeeping, recreation and landscaping, which generates affordable-housing needs. The county collects sales taxes revenues from STRs, but these revenues aren’t earmarked for affordable housing. EPS recommends that the county add a lodging tax that could reach up to 6% of revenue for both hotels and STRs, similarly to other counties where lodging taxes have recently been either implemented or increased.
This could be added on top of the existing 6.9% sales tax (including state, county and RFTA taxes), meaning that with a 6% lodging tax, guests in Pitkin County would pay 12.9% in taxes, which is lower than Aspen’s 17.35% to 22.35% total rate, including lodging taxes and on par with Snowmass Village’s 12.8%. Currently, Pitkin County has the lowest total tax rate on STRs among 28 peer communities. A lodging tax would need to be approved by voters.
Clapper shared concerns about adding a lodging tax, since it could hurt the three small hotels located in unincorporated Pitkin County and increase room rates.
“One of the concerns we hear is from people who say it’s too expensive to stay here, so they stay in Basalt, or they stay in Carbondale, or … in Glenwood, and they drive back and forth, … plus our room rates are already to the roof,” Clapper said. “When you’re paying $60,000 a night, I don’t think you care, but when you’re trying to pay $600 a night, you’re gonna care.”
Commissioner Jeffrey Woodruff asked if STRs could be used as a housing opportunity.
“If we have 40% of our homes that are unoccupied, and we clearly have a need from the music school, from physics, from even skiing, … could this be a tool to change that?” Woodruff said at the meeting. “We can house physicists; we can house music students; we can house folks that are here for [Aspen Ideas Fest].”
Staff and consultants said that they would look into that idea further and that an exception could be made to allow more flexibility to people who would like to rent their property during these events.
Although the study didn’t find evidence of negative impacts on the water supply or on onsite wastewater treatment systems, EPS has heard concerns from community members about water uses and recommends that the county require that rural STR applicants on well water to provide proof that the well capacity is sufficient. Consultants also suggest that the county update application requirements regarding wildfire mitigations, such as requiring photos that prove that the property meets the county’s defensible space requirement.
Community outreach
The study includes findings from interviews with STR brokers and operators, three surveys, and two hybrid focus groups. The community survey results indicate that “most Pitkin County residents are not very impacted by STR activity, but many feel passionately about STRs, either positively or negatively, and want to see a change in regulations and enforcement that corresponds with their beliefs.”
Most concerns regarding STRs often focus on the loss of community character within residential neighborhoods, but 70% of community members notice either none or very little STR activity in Pitkin County, according to the community survey.
Twenty-four STR operators responded to the EPS survey, which noted that the survey’s results are skewed toward smaller and owner-occupied properties as they were overrepresented among the respondents, and may not capture trends at the high-end of the rental market. The study said the vast majority of respondents reported that they do not offer concierge services, but this contradicts findings from high-end brokers with whom EPS talked. Those brokers reported that such services are an important part of an STR stay for wealthy guests. “The only property reporting offering these services also had an $8,000-per-night price point, the highest of the sample,” according to the report.
Although the higher end of the market may have been underrepresented in the community survey, a transportation-intensity study from EPS, which was prepared for the Vision 2050 Project that aims to update the county’s land-use code to meet climate goals, shows that employee trips increase significantly with the home size and that the largest homes generate nearly five employee trips per day during periods of peak occupancy, compared with just half a trip for the smallest homes. The study was for all residential properties, not just STRs.
Fehr & Peers conducted a traffic study specific to STRs as an addendum to EPS’s STR Impact Study, and found that STRs in the unincorporated county contribute a minor amount to overall congestion. Using 2024 Colorado Department of Transportation data from the continuous- and temporary-traffic CDOT counters located on Highway 82, Fehr & Peers estimates that STRs in unincorporated Pitkin County generate between 0.4% (80 vehicles) and 1.1% (252 vehicles) of the traffic on Highway 82 on an annual basis.
Pitkin County contributes to Aspen Journalism with a grant from the Healthy Community Fund. Aspen Journalism is solely responsible for its editorial content.
