Federal Judge Dismisses Lawsuit Against Short-Term Rental Ordinance

Last month, federal Judge Gordon Gallagher dismissed a lawsuit against Summit County, Colorado, which claimed short-term rental regulations passed by the local government were excessive and violated their rights. According to an article in Summit Daily, the ordinance in question, which went into effect last fall, placed caps on the number of short-term rental licenses that could operate in each neighborhood (ranging from 5 to 18 percent) and limited the number of annual bookings to 35 per homeowner. It also contains exemptions for properties in areas deemed “resort overlay zones” and for full-time county residents who work more than 30 hours per week in the county or who have retired and have a history of working in the county for at least 10 to 15 years.

The judge was sympathetic to the significant repercussions of the ordinance for the property owners, but ultimately ruled that the county provided sufficient rational basis for the ordinance and said the homeowner plaintiffs failed to establish the the right to rent one’s property is a fundamental right and that the had conceded they do not have a fundamental right to a short-term rental license.

At the time the ordinance was passed, county commissioners said “the rules were designed to mitigate an escalating affordable housing crisis by protecting existing housing stock for long-term tenants,” writes Robert Tann for Summit Daily. Short-term rentals regulations aren’t the only strategy local officials there have used to that end. Earlier this year, the National Association of Counties reported on a unique partnership between Summit County, the U.S. Forest Service, and the town of Dillion to build a 162-unit housing facility with a certain number of beds and units reserved for Forest Service Employees, who have been struggling to find affordable housing in the area.

Mountain resort communities across the country are grappling with their own affordability crises, as home prices skyrocket and large numbers of housing units are being converted to short-term rentals and listed on sites like Airbnb and Vrbo. Tann reports that similar short-term rental measures have also been “taken by town councils in Breckenridge, Frisco and Silverthorne, each of which placed caps on short-term rentals within their respective town boundaries.”