While uncertainty persists over the future direction of the Coronavirus (Covid-19) pandemic and statewide restrictions in Colorado, short-term rental owners are scrambling to keep pace with changing rules and continuing demand.
Demand? Yes. More than a thousand owners turned over their rentals to frontline workers in the state. Meanwhile, restless travelers from in- and out-of-state are making 
inquiries about availability and regulations.
Perhaps not surprisingly, some Colorado short-term rentals seem to have continued operating covertly during the pandemic. An investigation by Denver TV station CBS4 found hundreds of homes still listed as available on the popular VRBO rentals site after restrictions were introduced.
That’s risky. Owners who are found to have ignored the rules face fines of up to $5,000 and/or even some jail time.
And, just to complicate things, many individual counties have introduced their own rules and submitted their own variance requests to state government on lifting rules. The legal position between Federal, state and county authorities has become murky, to say the least.
Several counties have already eased restrictions, but these mainly affect hotels and multi-guest establishments. And in at least one county (Larimer) lawmakers said they were lifting restrictions in April and then changed their minds, pushing back the date to end-May.
Bluntly, with so much uncertainty, this is not a great time for owners of short-term rentals in the state.
As what would normally be vacation season gathers pace, the state’s “stay-at-home” order expired this past Tuesday (May 26) but with the option for extension or reintroduction according to needs. The current alert level is now “safer-at-home”.
But although dine-in restaurant restrictions have been eased, the picture for short-term rentals is unclear, with government saying “other” limitations won’t be reviewed until June. But that’s next week and at least one county (Summit) has announced plans for short-term rentals to be operating from June 1.
The current (May 26) position (subject to any local variances that are granted) as ordered by the state is: “Short-term rentals can’t open under the new Executive Order. They can be rented out to the state as part of the public health response, but they cannot be rented by the public.”
In the meanwhile, owners of B&Bs, and rental apartments and homes are facing significant financial losses. At this time of year, average monthly rental income is estimated in the $5,000 to $6,000 range, though, obviously, there are wide variations.
Add to this income flow, financial benefits to surrounding communities, so that the overall effect of the restrictions is likely to be significant.
For example, Airbnb’s top two short-term rental markets in Colorado, Denver and Breckenridge, drew in spending of $51 million and $16.5 million respectively in 2017, according to The Journal newspaper. That loss also means lower tax takes for cities and counties.
And even as restrictions ease and inquiries roll in for June bookings, short-term rental owners will likely face limitations, below capacity, on numbers of guests they can accommodate.
One other group to suffer financially from the restrictions are firms that supply cleaning services to short-term rental owners. Not only that but, as restrictions are eased, cleaners will probably be required to implement much stricter standards on sanitizing apartments and homes.
This, in turn, will likely knock on to the owners in the form of higher cleaning fees. Down the line, this could, in turn, means higher fees for renters. 
Finally, of course, there’s the unknown risk of a return to some sort of a lockdown if there’s a significant surge of new cases of Coronavirus infection. In that instance, owners will have to be wary about any advance deposits or full payments they’re taking, which they might have to return if there are cancellations.
More Issues and Concerns
As if all of the problems flowing from the pandemic weren’t sufficient, a move has been made to impose or increase taxes on short-term rentals in Colorado. The idea is to shift short-term rental ratings from residential to commercial. That would represent a four-fold increase in taxation
Although the relevant law, Senate Bill 109, didn’t have a sponsor according to the Colorado Sun, it has flagged up another potential long-term financial headache for owners, who would inevitably have to pass on the cost to renters. In turn, renters might have to think twice about their own plans.
At the same time, the city of Denver has toughened up its rules on short-term rentals by insisting that accommodation listed on sites like Airbnb must be the owner’s primary residence. See here for more details: https://tinyurl.com/Denver-STR
Another key issue affecting Colorado short-term rental owners is the question of insurance, both for lost business/cancellations and potential liability claims.
We’ll talk about this next time. But, if in the meantime, if you have questions about your insurance coverage please do contact us at the Equity Insurance Group.
Disclaimer: Equity Insurance Group has made every effort to ensure the accuracy of this report, which is provided for informational purposes only. Rules and circumstances are changing rapidly during the pandemic and you are advised to consult relevant authorities regarding short-term rental regulations and policies. We can’t accept responsibility for errors or omissions.