Dillon Short-Term Rental Rules

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Over the years, affordable workforce housing has steadily increased in prevalence as an issue in Summit County, Colorado. However, since the onset of Covid-19, the challenge for the Summit County local workforce has continued to mount. And, many local businesses believe the lack of such housing is a significant factor driving worker shortages. Plus, if those employed here cannot live locally, many are concerned there will be a potential shift in the "character of Summit County". Accordingly, starting in 2018 and carrying on to the present, stakeholders across Summit County have discussed possible solutions for the lack of affordable housing in Summit County for local employees. And, various governmental authorities across Summit County have expended significant time and effort to find and implement measures that might potentially ease the local workforce housing crisis. Stemming from these various meetings, governmental bodies across Summit County have either adopted or are considering adopting new regulations regarding short-term rental (“STR”) licenses.

With the building height restrictions in place locally, Summit County does not have towering hotels with tremendous capacity to potentially serve its resort visitors. And, most locals agree the absence of such multi-story structures adds to the charm of our mountain community. However, Summit County tourism nonetheless relies on a healthy supply of places to stay, and short-term rentals in unincorporated Summit County certainly comprise a significant component in that regard. As a result, governmental bodies across Summit County are currently in an experimentation phase, enacting short-term rental rule changes in an effort to find the right balance between fostering increased local workforce housing while sustaining our vital tourism business. In turn, the regulatory landscape is quickly changing. As a resource for folks interested in potentially purchasing Dillon real estate and using their home to conduct short-term rentals in Dillon, my aim is to maintain this informational resource for learning more about Dillon short-term rental rules.

Dillon Short-Term Rentals
Property Owner FAQs

Dillon Short-Term Rental Rule Changes

Dillon Short-Term Rental License

In November 2018, the Town Council engaged in a first reading of a new Dillon short-term rental ordinance. On December 4, 2018, the Town Council voted to approve its Dillon Short-Term Rental Ordinance.  The Ordinance eventually became effective on January 1, 2019.  As part of the ordinance, the Town of Dillon required Dillon short-term rental property owners to obtain a Dillon short-term rental license as a pre-requisite to leasing their short-term rental properties.

On December 21,  2021, the Town Council conducted a work session where it discussed potential changes to the Dillon short-term rental rules.  During that session, Town staff submitted a Work Session Memo that provided background on Town Council’s prior discussions as well as data collected regarding Dillon short-term rentals.  As part of the Memo, Dillon staff noted there were approximately 1,365 residential units in Dillon; of those, 357 currently possess active STR licenses.  That amounts to more than 26% of Dillon’s total housing stock.  As part of the December 21 work session, the Town Council also stated that, while it does consider eventually raising the excise tax for short-term rentals to be reasonable, it will not be seeking to add a new STR tax question to the April 2022 ballot.

For a Work Session to take place on February 1, 2022, the Town Council released a Staff Memo on Dillon short-term rental rule changes, a draft 2022 Dillon STR Licensing Guide and draft changes to the Dillon STR municipal code.  In March 2022, the Town Council enacted modifications to the Dillon Short Term Rental Ordinance.

In February 2023, the Finance Manager prepared a memorandum on suggested changes to the Dillon short-term rental rules.  Town staff recommended removing certain previously established rules, like the Dillon STR parking requirements as well as the Dillon short-term rental parking fee.  They also recommended raising the annual Dillon short-term rental license fee.  At the end of February 2023, the Town Council adopted an ordinance further amending the Dillon short-term rental rules, as outlined in the Finance Manager's Memorandum.

At present, the Dillon short-term rental ordinance requires a property owner to file a written application for a Dillon short-term rental license at least 30 days prior to any advertising.  All Dillon short-term rental licenses expire on May 31 of each calendar year.  Current Dillon short-term rental license holders have until June 1 of each year to submit STR renewal applications and then until June 30 of each year to complete all tasks in the STR renewal process.  As a means of covering compliance costs, like the STR complaint hotline and staff time, Dillon short-term rental license fees are now $700 per year (regardless of when during the year that the STR license is obtained).  Both the initial Dillon short-term rental license application as well as the annual Dillon short-term rental license renewal have a $700 fee.  The Dillon short-term rental application also requires a property owner to certify that their unit complies with all applicable laws and codes and that all smoke detectors, carbon monoxide detectors and fire extinguishers are installed and operable.  Additionally, the Dillon short-term rental application requires Dillon short-term property owners to submit a parking plan, a trash and recycling plan and trash and recycling hauler information.  The Town has also decreed that accessory dwelling units cannot be used for Dillon short-term rentals.

On its website, the Town provides a nice summary of Dillon short-term rental license rules.

Dillon Short-Term Rental Occupancy Limits

When the Town Council initially met in 2018, it declined to adopt occupancy limits at that time.   In March 2022 when it modified the Dillon Short-Term Rental Ordinance, Section 6-11-55 provided for Dillon short-term rental occupancy limits of 2 persons per bedroom plus 2 additional total occupants.

Dillon Short-Term Rental Responsible Agent

As part of the licensing application for a Dillon short-term rental, the Town also requires short-term rental owners to designate a Responsible Agent.  The Town defines a Responsible Agent as "the owner, the owner's agent, or the owner's designee who is available to respond to any issues arising from a short-term rental unit within sixty (60) minutes and who is authorized to receive written notice on behalf of the owner."  The general purpose of the Responsible Agent is for someone to be available 24 hours per day and 7 days per week to respond to and resolve complaints submitted by the public regarding a particular Dillon short-term rental.

Dillon Short-Term Rental Taxes

At a work session on May 17, 2022, the Town Council discussed the possibility of increasing the town’s lodging tax as well as possibly imposing a new excise tax on Dillon short-term rentals.  Those proposed tax increases were eventually added to the November 2022 ballot.  Voters passed an increase of the excise tax on Dillon lodging from 2% to 6% that began on January 1, 2023.  And, voters also passed a 5% excise tax on Dillon short-term rentals that commenced on July 1, 2023.  On its website, the Town provides more specific information on Dillon lodging tax.

Dillon Short-Term Rental Parking Requirements

Prior to 2023, a Dillon short-term rental property was required to provide permitted or designated parking spaces at a rate of one space per bedroom plus 1 additional space.  If a Dillon short-term rental property could not meet that requirement, then the Dillon short-term rental property owner was then subject to an additional STR parking fee to be paid on an annual basis.  However, as part of the amended 2023 Dillon Short-Term Ordinance, the Town removed the preceding requirements.  The Town partly made these changes, because it now provides paid overnight parking lots for Dillon short-term rental guests.

No Moratorium or Caps on Dillon Short-Term Rental Licenses

At present, there are no moratorium and no caps on short-term rental licenses in Dillon.  Accordingly, the Town of Dillon continues to receive, evaluate and process new short-term rental applications at this time.  Interestingly, in February 2023, the Finance Manager noted a decrease in total Dillon short-term rental licenses from 2022 to 2023.  In that regard, there were 380 active Dillon short-term rental licenses at the end of May 2022 and only 345 active Dillon short-term rental licenses in February 2023.

On September 21, 2021, the Dillon Town Council convened a meeting on workforce housing solutions, and it initially appeared the Council might pass an emergency 7-month moratorium on new Dillon STR licenses.   However, after extensive discussion and citing the need for additional research, the Dillon Town Council chose not to move forward with the emergency ordinance.  Instead, the Dillon Town Council decided to earmark additional time to the STR topic on a biweekly basis.  The Dillon Town Council noted the potential for STR license caps, STR occupancy limits, STR license fee increases as well as possibly asking voters for a new tax increase.  The Dillon Town Council also planned to facilitate community meetups for discussion to ensure that local residents and second homeowners had ample opportunity to be heard.

To date, the Town has not yet added a cap of any type on the total number of Dillon short-term rental licenses.

No Caps on Dillon Short-Term Rental Nights

At present, there are also no caps on the number of rental nights for Dillon short-term rentals. Dillon permits short-term rental owners a potentially unlimited number of rental days in any calendar year.

Need Help Understanding Dillon Short-Term Rentals?

If you’re interested in further discussing local real estate and how STR license changes might potentially affect your decision to buy or sell a property in Dillon, please don’t hesitate to contact Philip for help.  After all, if you made it to this point, you’ll agree I’ve written "the book" when it comes to Dillon short-term rental rules!