Are Short-Term Rentals Allowed in Manitou Springs?

With the increasing popularity of home vacation rental websites like VRBO and Airbnb, we have potential home buyers and investors asking what the zoning codes are in Manitou Springs – are home owners even allowed to rent out their properties on a short-term basis?  Can you purchase an established VRBO?  What is the process?

The answers are a bit complicated so we will do our best to explain.

Definition:  A short-term rental is any property that is rented out for periods of under 30 days at a time.  The rental must be occupied by renters for a minimum or 21 days per year in order to keep their status as a short-term rental.

History: In 2015, there was a moratorium passed that stopped the City of Manitou Springs from accepting any new applications for conditional-use permits to run short-term rentals (this included Bed & Breakfasts).

The moratorium provided the city time to figure out how short-term rentals should be regulated. Before the moratorium, it was estimated that about 40% of short-term rental home owners in Manitou were doing so illegally and without permitting.

Solution: In response, a new chapter was added to the Manitou Springs Municipal Code (Title 18.89) in the spring of 2016. This new regulation requires that “minor conditional use permits” be obtained by the owner of any property intended to be operated as a vacation rental. The owner of the property must also obtain a business license from the City of Manitou Springs prior to listing the property as a vacation rental.

Details:  The City will only grant permits if certain conditions are met including the following:

  • The maximum number of vacation rentals shall not exceed 2% of the City’s residential structures based on the most recent numbers from the Colorado State Demography Office at the beginning of each calendar year. Currently that 2% number is around 56 properties.
  • Vacation rentals in Manitou Springs shall be separated by a minimum of 500 foot radius measured from each of the property’s corners.

There are a number of additional criteria; in fact there is a checklist of procedures that a property owner must complete and agree to for the application. For more detailed information, you can view the City of Manitou Springs Vacation Rental Packet at: http://www.manitouspringsgov.com/library/documents/general/planning/Vacation_Rental_Packet.pdf

You can also check the online map to see the existing 500’ radius zones in Manitou:

http://www.manitouspringsgov.com/library/images/POST/2017-01-19_Vacation_Rentals_Radial_Buffer_Map.pdf

Purchasing question:

If an investor or home buyer wanted to purchase an existing short-term rental would all the permits and licenses be transferred to the new owner upon closing of the sale, or would the buyer need to start the process over?

The answer: it depends.  Some permits run with the land and some do not.  This means some permits are transferrable and some are not.  All NEWLY permitted homes will run with the land and be transferable.  Some, but not all, of the grandfathered-in permits are transferable.

Another option: the potential buyer can put an offer in on a home contingent on the approval of getting the short-term license and the “go-ahead” from the city.  Meaning, if the city doesn’t say “yes” to a short-term rental, the buyer could decide to not purchase the property and back out of the contract without penalty.

For more information on how to do this, contact one of Manitou Springs Real Estate’s qualified agents to assist and guide you through the process.