City Council considers refining the city’s short-term rental policies

Aspen City Council’s recent regular meeting centered on refining the city’s short-term rental (STR) policies, a key area of local governance that continues to balance the city’s tourism-based economy with increasing pressure on housing, neighborhood character, and livability. 

Tuesday’s public hearing represented a continuation of discussions first initiated by the previous council in February, as the city explores whether targeted revisions could improve the current framework without undermining its intent.

Aspen’s existing STR ordinance, adopted in 2022 as Ordinance No. 9, created three permit categories: Lodging Exempt, for traditional lodges and condo-hotels; Owner-Occupied, which allows up to 120 rental nights annually; and Classic, which permits year-round STR use but limits the number of permits by zoning district. 

The policy also includes annual permitting requirements, excise and lodging tax compliance, and renewal fees. Since its implementation, the ordinance has generated approximately $10.3 million in tax revenue, with $7.2 million dedicated to affordable housing and the remainder supporting infrastructure and general fund services.

One of the primary concerns raised during Tuesday’s meeting was the bottleneck created by permit caps, particularly in the R/MF zoning district, where 46 applicants remain on a waitlist for Classic STR-C permits. 

Staff indicated that, without changes to the current cap methodology, it could take up to two years for applicants to receive permits. This issue, alongside questions about equity and accessibility, has prompted council to consider adjustments that could streamline the process or expand capacity where appropriate.

Councilmember Bill Guth, who originally raised concerns about the STR policy in February, again pressed for revisions that would address what he called an “unintended penalty” for surviving family members. 

Under current rules, STR permits are not transferable — even within a family or via estate planning — which means that a permit expires upon the owner’s death. 

Guth argued this policy disproportionately affects families trying to keep property within households and asked city staff to explore exemptions for “non-arm’s-length” transactions, such as transfers to a spouse, trust, or estate.

“I appreciate that we are making changes to improve the program, and I hope that is a continuing effort as we learn and gain experience to improve the program,” Guth said. “If someone is not selling their unit to a new owner, but someone who is related to them, this is something that would otherwise qualify for the real estate transfer tax exemption. I request that staff find ways to make this exempt from the non-transferability.”

Mayor Rachel Richards requested that city staff analyze the pros and cons of Guth’s proposal and return with recommendations.

Another policy under review was the requirement for STR operators within homeowners’ associations (HOAs) to obtain formal HOA approval each year. While this condition was initially intended to support local oversight and alignment, some councilmembers questioned whether such governance should be municipal in nature or left to the discretion of each HOA. 

Staff acknowledged that while the requirement enhances accountability, it can also be administratively burdensome.

Enforcement issues also drew attention. Since the ordinance’s rollout, 53 STR-related complaints have been investigated, primarily involving noise disturbances, unauthorized smoking, and similar nuisances. 

Only three cases resulted in formal violations, but council members expressed interest in refining enforcement tools to maintain compliance while reducing bureaucratic friction.

Ben Wolff, general manager of Frias Properties, spoke in support of the city’s review process. 

“Thank you to staff and council for even talking about this,” he said during the public hearing. “I think it shows that we are on the same page in trying to make this process work as well as possible. A lot of these are just administrative things to streamline the program and make it a little easier on everyone, while maintaining the intent of the program.”

Wolff echoed Guth’s concerns about permit transfers within families and asked that related permitting requirements be waived or expedited in those cases. He also raised concerns about compliance language in the city code regarding booking platforms. 

“The question for consideration is whether a booking platform complies with the code language,” Wolff said. “We currently advertise on all the platforms, but not all of them have a place to put the STR number, and we always put it in the description, so we obviously support scrubbing that policy.” 

He warned that an overly strict interpretation of this rule could eliminate access to major rental platforms and reduce business opportunities.

City staff were directed to return with detailed recommendations and proposed revisions in several areas, including zoning cap methodology, permit transferability, HOA approval processes, advertising language, public notice requirements, and tax filing logistics.

The process will continue later this summer. A City Council work session is scheduled for Aug. 25 to discuss staff recommendations. Also in August, an information memo will be distributed to the Planning & Zoning Commission, the Historic Preservation Commission, the STR Technical Advisory Committee, Board of Realtors, STR operators, and representatives from platforms such as Expedia and Airbnb. 

The first ordinance reading is anticipated for Sept. 1, with a second reading and potential adoption scheduled for Oct. 2.