Short-Term Rentals in Norwood, CO: Investor Guide

Overview: Are Short-Term Rentals Allowed in Norwood?

Yes—short-term rentals (STRs) are likely allowed in Norwood, CO, subject to zoning, building, licensing, and tax requirements at the local and state levels. Norwood’s Land Use Code does not expressly define or prohibit STRs. Lodging-type uses, such as “Hotel or Motel” and “Bed and Breakfast,” are defined in the Code and are treated as principal or conditional uses in specific districts (e.g., the B-1 Business District), and “Bed and Breakfast” has explicit owner-occupancy and parking standards. As a result, most short-term rental formats—such as nightly or weekly rentals in single-family dwellings, accessory dwelling units, or commercial lodging—should be permissible if they align with the underlying zoning classification and development standards. However, because the Code does not explicitly define STRs, investors should confirm zoning classification and permit requirements with the Town before proceeding.

How to Start a Short-Term Rental Business in Norwood, CO

• Confirm zoning compliance:
  • Determine your parcel’s zoning district (e.g., A Agricultural, R-1 Residential, MD Medium Density, B-1 Business, MH Mobile Home, I Industrial, P Public).
  • Verify whether lodging uses are permitted “by right” or require a Conditional Use Permit (CUP) in the chosen district per Chapter 3 (Use Regulations). Based on Code definitions, “Hotel or Motel” is a lodging use and is typically associated with commercial districts (e.g., B-1). “Bed and Breakfast” is defined and has specific owner-occupancy and parking requirements in residential districts.
  • If an STR is proposed in a residential district without an explicit lodging allowance, consider pursuing a CUP per Chapter 6.10 or a Variance per Chapter 6.15 if applicable.
• Engage with Town staff:
  • Request a Zoning Development Permit per Chapter 6.19 to confirm use compliance in the subject zoning district and any required conditions.
  • If structural changes or new construction are proposed, obtain a Building Permit per Chapter 6.19 after Zoning Development Permit approval.
  • Obtain a Certificate of Occupancy per Chapter 6.20 to authorize legal use of the premises for lodging.
• Licenses and registrations:
  • Business License: Obtain any Town business license/registration as required; Norwood’s Code sets a fee framework for land use applications (Section 1.08) but does not itemize a specific STR business license fee.
  • Colorado state licensing/registration: Confirm and comply with Colorado’s Short-Term Rental Accommodation Act (C.R.S. §§ 6-28-101 et seq.) and the Department of Revenue’s requirements for STR licensing and related excise taxes.
• Taxes:
  • State sales/use/excise taxes: Register with the Colorado Department of Revenue for sales tax and any applicable lodging-related excise taxes required for STRs under Colorado law.
  • Local taxes: If the Town or county has adopted a lodging or accommodation tax, register and remit accordingly.
• Operational compliance:
  • If operating as a Bed and Breakfast in a residential district, ensure owner-occupancy and parking standards are met (one off-street parking space per bedroom offered for temporary overnight accommodations, in addition to residential parking requirements).
  • Address safety, access, parking, signage, lighting, noise, and performance standards as required in Chapters 5 and 7.
• Ongoing administration:
  • Maintain records of permits, licenses, tax filings, guest logs, safety inspections, and any neighborhood communications.
  • Track renewal dates and any changes to zoning or fees.

Required Documents, Permits, Licenses, and Guidelines

Local (Town of Norwood)

• Zoning Development Permit: Required to confirm use compliance for lodging/STR uses in the zoning district (Chapter 6.19).
• Building Permit (if applicable): For new construction, additions, or alterations; issued after Zoning Development Permit (Chapter 6.19).
• Certificate of Occupancy: Authorizes legal use of the premises for lodging/STR (Chapter 6.20).
• Business License/Registration: Confirm with the Town whether a separate STR business license is required; fees are set by ordinance (Section 1.08).
• Conditional Use Permit (CUP) or Variance (if applicable): For lodging uses not permitted by right or dimensional relief (Chapters 6.10 and 6.15).
• Written confirmation from the Town (recommended): Obtain a letter or permit indicating STR lodging use is authorized for your property.

Colorado State-Level

• STR licensing/registration: Comply with the Short-Term Rental Accommodation Act and Department of Revenue rules.
• Sales tax and lodging/excise tax accounts: Register, collect, and remit state sales/use/excise taxes as applicable to STR operations.
• Colorado advertising rules: If state rules require registration numbers or disclosures in advertisements, ensure compliance when listing properties online.

Operational Guidelines (derived from Town Code)

• Bed and Breakfast (in residential districts): Owner-occupied; maximum five separate bedrooms; one off-street parking space per bedroom offered for temporary overnight accommodations, in addition to standard residential parking (Definitions, Chapter 2.02).
• Parking and Access: Provide off-street parking as required by Chapter 5.02; maintain all-weather surfacing or gravel and usability standards.
• Performance Standards and Noise: Comply with Chapter 5.07 and other performance criteria (e.g., lighting, signage).
• Nonconforming Uses: Understand nonconforming status, expansion limits, and abandonment provisions (Section 1.06) when converting existing structures to STR use.
• Fees: Application fees are set by ordinance commensurate with services, including publication, hearing, planning, engineering, and legal review costs (Section 1.08).

Specific Regulations for Short-Term Rentals

Town of Norwood (City-Level)

• No explicit STR prohibition or separate STR definition is identified in the Land Use Code.
• Lodging uses are recognized through defined terms: “Hotel or Motel” (minimum six guest rooms; customary hotel/motel services) and “Bed and Breakfast” (owner-occupied single-family dwelling; lodging and breakfast for temporary overnight occupants in no more than five bedrooms; one off-street parking per bedroom offered).
• Zoning Use Regulations: Chapter 3 governs district use allowances. Confirm whether lodging uses are permitted “by right,” as a conditional use, or require a CUP in your parcel’s district (e.g., B-1 Business for hotel/motel; Bed and Breakfast in residential contexts).
• Administration and Procedures: Zoning Development Permits (Chapter 6.19), Building Permits (Chapter 6.19), Certificates of Occupancy (Chapter 6.20), CUPs (Chapter 6.10), Variances (Chapter 6.15), Appeals (Chapter 6.14), and other procedures govern approvals and relief.
• Fees and Enforcement: Fees are set by ordinance (Section 1.08). Violations are subject to misdemeanor penalties, fines up to $1,000, imprisonment up to 90 days, and each day of violation constitutes a separate offense (Section 1.07).
• Performance Standards: Off-street parking (Chapter 5.02), signage (Chapter 5.06), lighting (Chapter 5.08), noise and operational standards (Chapter 5.07) apply to lodging uses.

San Miguel County (County-Level)

• No county-specific STR regulations are provided in the referenced material. Confirm county licensing, tax, or compliance requirements separately if your property is in unincorporated county areas or if county-level lodging taxes or permits apply.

Colorado State-Level

• Short-Term Rental Accommodation Act: Establishes statewide licensing/registration requirements for STRs and sets rules for operators and platforms (C.R.S. §§ 6-28-101 et seq.). Specific application, renewal, and fee details are set by the Department of Revenue and should be confirmed directly.
• Sales and Lodging/Excise Taxes: STR operators must register, collect, and remit applicable state sales/use/excise taxes as provided by Colorado law and DOR guidance. Confirm the exact tax obligations and rates with the DOR.
• Advertising Compliance: Colorado statutes may require inclusion of license/registration numbers and certain disclosures in online listings for STRs.

Contact Information

Town of Norwood – Administration and Planning

• Address: Town of Norwood, Colorado (contact the Town Hall for mailing address and hours)
• Phone: 970-327-4286
• Building Official/Inspector: Phone 970-327-4206
• Town Planner: Phone 970-327-4286, ext. 5
• Town Clerk: Phone 970-327-4286, ext. 4
• Town Attorney: Phone 970-327-4286, ext. 6
• Water/Utilities (Norwood Water Commission): Phone 970-327-4286, ext. 3
• Website: www.norwoodtown.com

San Miguel County (if applicable)

• San Miguel County Clerk and Recorder: For plat records, property records, and potential county-level lodging tax or licensing information. (No phone/email provided in the referenced materials; confirm via county website.)

Colorado Department of Revenue (State-Level)

• Licensing and tax registration for STRs: Contact DOR for STR licensing requirements and lodging/excise tax registration and filing guidance. (No direct phone/email provided in the referenced materials; confirm via DOR website.)

Links to Source Pages

• Norwood, CO – Land Use Code (PDF): www.norwoodtown.com/files/cabc11b2c/revised-land-use-code-feb-20.pdf

Notes and Best-Practice Tips for Investors

• Before acquisition, secure a written determination from the Town Planner confirming that STR lodging is a permitted use for your property and clarifying whether a CUP or other approvals are needed.
• If the STR will operate as a Bed and Breakfast, document owner-occupancy status and parking counts to demonstrate compliance with the Code.
• Build a compliance file: include permits, licenses, tax registrations, inspection reports, and a guest-policy manual addressing noise, parking, occupancy limits, and waste management.
• Plan for ongoing fee obligations (e.g., taxes, renewals, potential mitigation fees) and monitor Town ordinances for updates affecting STRs.