Frisco CO Short-Term Rental Rules

Image - Frisco Short-Term Rental Rules

In recent years, affordable workforce housing has become a pressing issue in Frisco, Colorado.  The onset of Covid-19 further exacerbated the challenges faced by the local workforce, leading to worker shortages.  Some local businesses attribute this shortage to a lack of affordable housing options, raising concerns about a potential shift in the "character of Frisco."  In response, local governmental entities, including the Town of Frisco, have been actively discussing and implementing short-term rental (STR) regulations as a stopgap measure to address the ongoing loss of local employee housing.

At the same time, tourism plays a vital role in Frisco's economy, and Frisco short-term rentals have historically been crucial in supporting the tourism industry of this charming mountain community. While Frisco, like the remainder of Summit County, prides itself on not having towering hotels, Frisco short-term rentals are essential in providing accommodation options for visitors.  Striking the right balance between fostering increased local workforce housing and sustaining tourism has prompted local governmental bodies to experiment with changes to Frisco short-term rental regulations. As a result, the regulatory landscape is rapidly changing, including the adoption of new Frisco short-term rental rules.

As a resource for those considering purchasing Frisco real estate for short-term rentals, my objective is to provide valuable insights into Frisco short-term rental rules. Stay informed with the latest updates and changes in Frisco short-term rental regulations that may impact your investment.

Frisco CO Short-Term Rentals
Property Owner FAQs

Frisco Short-Term Rental Rule Changes

Frisco Short-Term Rental License

In November 2018, the Town Council engaged in a first reading of an original draft of the Frisco short-term rental ordinance but decided to temporarily table it to work on a couple of issues. After a few modifications to the language, the Town Council voted on December 11, 2018 to approve a Frisco Short-Term Rental Ordinance (preceding link is to most recent version as of Oct. 26, 2022). As part of the ordinance, the Town of Frisco required Frisco short-term rental property owners to obtain STR licenses before leasing or advertising their short-term rental units.

Frisco short-term rental License fees are currently $250 per year.  As part of the short-term rental application process, Frisco also requires submission of a motor vehicle parking plan and an affidavit confirming basic life safety requisites have been met. Frisco short-term rental property owners must also provide guests with an information notice that includes address, emergency information and various other important Frisco short term rental information.  On its website, the Town provides a nice summary of Frisco short-term rental rules.

Frisco Short-Term Rental Occupancy Limits

When the Town Council decided to table its original draft of the Frisco short-term rental ordinance in November 2018, one of the main issues for further work by Town staff was occupancy limits for Frisco short-term rentals. In the final draft of the Frisco short-term rental ordinance, the Town set Frisco short-term rental occupancy limits of 2 persons per bedroom plus 4 additional total occupants.

Frisco Short-Term Rental Responsible Agent

As part of the licensing application for a Frisco short-term rental, the Town also requires Frisco short-term rental owners to designate a Responsible Agent.  The Town defines a Responsible Agent as "a management company or individual who is identified by a licensee as the licensee’s responsible agent... who is available 24 hours per day, 7 days per week to respond as the initial point of contact for the short-term rental property."  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 Frisco short-term rental.

Frisco Short-Term Rental Excise Tax & Additional Fees

At a work session on November 30, 2021, the Frisco Town Council discussed potential solutions to alleviate community workforce housing shortages. Here is a YouTube link to the start of their short-term rental discussion. As outlined in a Staff Memo, the Frisco Town Council considered the possibilities of a short-term rental excise tax, a regulatory fee on a per-bedroom basis for Frisco short-term rental licenses, caps on the total number of short-term rental licenses and/or a moratorium on new short-term rental licenses.

At prior meetings on September 14 and 28, 2021, the Town Council discussed the possibility of moving forward with the possibility of imposing an excise tax on Frisco short-term rentals. At the Nov. 30 work session, this was the predominant discussion topic. More specifically, the Town Council dedicated most its discussion to the exact fee percentage of a potential Frisco STR excise tax. At one of the September meetings, the Town Council had tentatively examined the possibility of a 7.5% excise tax. There is already a sales and lodging tax of 10.725% that is applied to Frisco short-term rental visits. A proposed additional 7.5% tax would thereby bring the total tax on short-term rental stays to 18.275%.

In November 2021, the Town returned to the topic of raising the tax rate on Frisco short-term rentals.  In January 2022, the Town Council lowered the initially proposed tax on Frisco short-term rentals from 7.5% to 5%.  Residents of the Town approved the 5% excise tax on Frisco short term rentals in their April 2022 election.

The last item raised by the Town regarding new Frisco short-term rental fees was the possible future imposition of new Frisco short-term rental license fees on a per-bedroom basis. In November 2018, Town staff noted that local communities had been considering imposing regulatory fees on individual STR licenses. These fees would be used to defray the costs of Town housing policies and programs, address secondary impacts of the short-term rental industry on the community and STR program administration and enforcement. As this is a fee intended to defray the costs of a government's STR licensing and regulatory program, Frisco staff stated that imposition of any fee would first require completion of a study to calculate the cost of those impacts. Without such a study, Frisco staff opined it would be difficult to set a reasonable fee to be imposed for individual properties.  So far, the Town Council has not yet approved any new fees of this type.

25% Cap on Frisco Short-Term Rental Licenses
Cap Reached on February 23, 2023
Frisco STR Waitlist Implemented

Regarding the possibility of a moratorium on the issuance of new Frisco short-term rental licenses, Town staff noted in November 2018 that a temporary moratorium on Frisco short-term rental licenses could facilitate continued progress on converting their STR licensing software to a new provider.  However, unless Town Council intended to draft significant changes to the STR program, Town staff did not recommend that the Town impose a Frisco short-term rental moratorium.

Regarding the possibility of instituting a cap on the total number of Frisco short-term rental licenses, Town staff recommended in 2018 that the Town Council should create a Frisco short-term rental license cap at a level of 25% of the residential properties in Frisco.  On June 28, 2022, Town Staff issued a Memo Re: Frisco Short-Term Rental Overview & Strategies.  In the Memo, Town Staff recommended "gathering more data and conducting stakeholder interviews to further develop our understanding of the anticipated outcome prior to implementing" a cap on Frisco Short-Term Rental licenses.

On August 23, 2022, Town Staff recommended a Frisco short-term rental license cap at a level of 22% of total housing inventory, meaning meaning 792 units of the town’s 3,600 residential units.  About 20% of total residential housing units presently have a Frisco short-term rental license.  For local residents who live in their home at least 10 months of the year, Town Staff also recommended creating a unique Frisco short-term license license type that would not be subject to the proposed 22% Frisco short-term rental license cap.

On September 13, 2022, the Town Attorney noted at a Town Council meeting that a federal court recently invalidated a New Orleans residency requirement for short-term rental licenses.  As a result, the Town Attorney recommended removing the local residency benefit from the newly proposed Frisco short-term rental ordinance.  Due in part to that change, Town Staff recommended an increase the Frisco short-term rental license cap back to 25% of total residential units.  While the Town Council expressed agreement in that regard, it also asked Town Staff to explore what a 30% Frisco short-term rental license cap might look like.  To permit the ordinance to be amended, the Town Council voted to table the first reading of the new ordinance until September 27, 2022.

On September 27, 2022, Town Staff continued to recommend, and Town Council thereby approved a 25% Frisco short-term rental license cap on first reading of the latest Frisco Short-Term Rental Ordinance No. 22-10.  After adding language to address exceptions to the general non-transferability of a Frisco short-term rental license, the Town Council conducted a second reading and final approval of Ordinance No. 22-10 on October 11, 2022.  After a 30-day period, Ordinance 22-10 went into effect on November 10, 2022.  With the 25% cap in place, the Town will allow for 900 active short-term rental licenses in Frisco.  The Town Council intends to reassess that Frisco short-term rental license cap on an annual basis.  As of October 11, 2022, Frisco had issued only 825 short-term rental licenses.  Accordingly, the Town will continue to issue new Frisco short-term rental licenses, if and until 75 additional license applications are submitted.  The Town also granted a Frisco short-term rental license exemption for residential properties that were under contract or under construction as of October 11, 2022.

On February 23, 2023, applicants reached the Frisco short-term rental license cap.  Accordingly, the Town is now implementing a waitlist for those wishing to apply for a Frisco short-term rental license.  There is a non-refundable $25 fee to join the Frisco short-term rental license waitlist. When a Frisco short-term rental license becomes available, Town staff will contact the next person on the waitlist via email, at which point that Frisco short-term rental owner will have 14 days to submit a complete Frisco STR license application.  As of June 23, 2023, there were less than 20 Frisco short-term rental owners on the STR license waitlist; all of them were required to submit an application on or before July 7, 2023.  The Town tries to provide monthly updates on the Frisco STR license waitlist.

No Caps on Frisco Short-Term Rental Nights

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

Need Help Understanding Frisco 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 Frisco, 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 Frisco short-term rental rules!