Short-Term Rentals


*Please note: the City's STR Map (above) is updated as soon as possible by City Staff; however, the map may not be updated to reflect exact current licensing data due to the dynamic nature of STR licenses and applications in the City. Locations shown are approximate, based on Google Maps.

The City has adopted Short-Term Rental (STR) Regulations to protect the public health, safety and welfare; preserve the character and ambiance of neighborhoods within the City; prevent adverse impacts attributable to short-term rentals; collect data on short-term rentals; and ensure compatibility with surrounding land uses.

To obtain a license to operate a Short-Term Rental, the owner of the property or their designated authorized agent shall complete an application and submit it for review to the Building Inspector. Prior to submission, it is important that the property owner and manager understand the limitations and regulations that apply to short-term rental properties.

RESOURCES & REFERENCES

Link: Resolution 12, Series 2021 - City of Ouray's updated policies, procedures, and regulations regarding short-term rentals beginning November 20, 2021. Resolution 12, Series 2021 includes Ordinance 7, Series 2021 which outlines changes to the Ouray City Code.  


Link: Ordinance 13, Series 2021 - Regulations and Implementation of new voter-approved 15% excise tax for STRs beginning January 1, 2022.

Link: LOT & Excise Tax Reporting Form - STR Lodging Occupation Tax and Excise Tax monthly reporting form for 2022 (City of Ouray).


SHORT-TERM RENTAL CAP
The Ouray City Council adopted a cap on short-term rental licenses in 2021. This cap is set to 120 maximum licenses that may be issued by the Community Development Department. The City is working with a third-party compliance and monitoring software to ensure that all STRs within the City are licensed and following all applicable laws and regulations. 


APPLYING FOR A NEW STR LICENSE?
Below are resources and tools for new license applications. Licenses cannot be transferred, meaning new owners of previously-licensed STR properties must complete a new application packet and submit the application to the City. All applications that are received by the City will be date stamped from the date the application form is received. If the City has met its cap of 120 licenses, these applications will be placed on a waitlist and processed in order of when they were received, when a license becomes available. 

Properties must pass an inspection completed by the City's Building Inspector prior to license issuance. Properties applying for a STR license will only be inspected when there is a license available and their application is in process (the City will not inspect units that are on the waitlist). 

The fee for a new short-term rental license is $600. STR license fees will not be prorated. 

Please refer to the list of short-term rental resources prior to applying for a license:


RENEWING YOUR STR LICENSE?
STR licenses are valid for one (1) year. Renewal applications are due on or before February 28th of each year. All licensed STRs are required to submit a Renewal Application, proof of insurance, and fee on or before February 28th to remain an active licensed STR. It is the property owner's responsibility to submit all completed forms and fees to the City of Ouray prior to expiration. 

A letter (linked below) was sent to all STR property owners and property managers on December 27, 2021 regarding the City's updated renewal policies and the City's 15% excise tax implementation. The letter is provided below for reference:

Although STRs are not subject to re-inspection after initial approval, staff reserves the right to request an additional inspection as needed to resolve previous conditions or complaints regarding the STR.

The fee for a short-term rental license renewal is $350. STR license fees will not be prorated. 


FREQUENTY-ASKED QUESTIONS (FAQs)

GENERAL QUESTIONS

  • Are STRs allowed in Ouray?
    • Yes, STRs are permitted in Ouray’s R-2, C-1, and C-2 Zone Districts. STRs are a permitted use if a property owner obtains a STR license from the City and adheres to all applicable regulations. Specific regulations are outlined in the Ouray Municipal Code (Section 7-5-J-11).
  • Are STRs allowed in the R-1 Zone District?
    • Any STR within the R-1 Zone District in existence and use as an STR prior to July 17, 2019, must obtain a STR license and upon the granting of a license such use shall be deemed as legal non-conforming. Upon non-renewal, or transfer in ownership of the real property of any kind, such license and use shall cease.
  • Does Ouray limit the number of STRs allowed within the City?
    • The City of Ouray has a cap of 120 total STR licenses that can be issued at any given time. If a license becomes available, it will go to the next application the City has on file, by the date it was received.
  • Do STR licenses transfer?
    • A STR license is issued to the real property owner and is not transferable. Specific transfer exceptions, where a license would transfer with a change of ownership, are outlined in the Ouray Municipal Code (Section 7-5-J-11). These exceptions do not apply to any STRs within the R-1 Zone District.
  • Do STRs have to pay any local taxes?
    • The real property owner is responsible to remit all applicable local, state, and federal taxes, along with applicable Lodging Occupation Tax (LOT), Sales Tax, or any other applicable local tax, unless exempt. The City recently approved an additional 15% Excise Tax for STRs for all units that are not taxed at a commercial tax rate (assessed through the County). Residential units (not including off-premises lodging units) must remit the following taxes for STRs in Ouray:
      • 4% City Sales Tax3.5% LOT15% Excise Tax  =  22.5% total tax remittance for STRs
        • Note: STR owners are also responsible for County (2.55%) and State (2.9%) Sales Tax remittance.
STR Tax Rate Breakdown 2022.3


APPLICATIONS AND RENEWALS

  • How do I apply for a STR license?
    • A property owner can apply for a STR license by submitting a completed STR application and all required materials. If the City’s cap has been met, the application will be date stamped and placed on a waitlist in order of when it was received.
  • How do I renew my STR license?
    • Licenses are valid for one (1) year; and all license renewals shall be due on or before February 28 of each year. The real property owner remains solely responsible for compliance with these regulations and must submit a STR renewal application to the City before their existing license expires (applications are found on the City website).
  • What if I don’t submit a renewal application before my license expires?
    • If a STR is within the R-1 Zone District and fails to renew before the license expires, that license is null and void and not transferrable. If a STR is within the R-2, C-1, or C-2 Zoning District and fails to renew and wishes to continue operating as a STR, the real property owner must submit a new application (not renewal application) to the City. That new application will be date stamped for when the City receives the application and will be placed on a waitlist until a new license becomes available for that unit.
  • How much does a STR license cost?
    • A new STR license fee is $600. A renewal license fee is $350. These fees are required at the time of license issuance (fees are not collected with an application submittal) via a check to the City of Ouray.

WAITLIST AND PROHIBITED STRs

  • How long will it take for a license to become available?
    • If the cap has been met, there is no way of knowing how long applications will be on the waitlist.
  • How many STRs can be on the waitlist?
    • The City will not limit the number of STR applications on the waitlist.
  • Are there any areas in Ouray where STRs are prohibited?
    • STRs are prohibited in the R-1 Zone District. STRs are prohibited in accessory dwelling units (ADUs). STRs are prohibited within certain HOAs in Ouray (carefully read all applicable covenants and agreements for your community/HOA).

BUILDING INSPECTIONS

  • Do I need to have my STR inspected?
    • STRs must pass an inspection with the City’s Building Inspector. STRs will be inspected as part of the process for obtaining a new STR license (or, if a previously licensed unit failed to renew in time and is now in the process of submitting a new application). Licenses that renew before they expire do not need to have a building inspection as part of the renewal process.
  • What if my unit fails the building inspection?
    • If a property has never obtained a STR license and fails the initial building inspection due to structural defects, as identified on the Short‐Term Rental Inspection Checklist, the application will be moved to the back of the waitlist and dated to the time of the failed inspection.
    • If a property has obtained a previous STR license or was grandfathered within the R‐1 zone district, and fails the building inspection, the application will keep its spot on the waitlist and shall pass a building inspection within six (6) months of the initial failure date or the application will be denied. An extension of one (1), six (6) month period may be granted administratively for lack of material availability or weather delay, in staff’s sole discretion.
  • What if my property is under construction or about to undergo a remodel?
    • STR applicants shall request a building inspection at the time of application submittal and the dwelling unit must be Inspection Ready. If no STR licenses are available, the application will be placed on a wait list in order of receipt and the inspection will only take place upon an available license. All applications where the dwelling units are not Inspection Ready will be accepted but only processed upon becoming Inspection Ready.






COMMUNITY DEVELOPMENT DEPARTMENT CONTACT INFORMATION
General life-safety requirements for STRs are outlined in the document linked above. 
 

Matt Haldeman, Building Inspector
phone: 970-325-7063.