Overview - Are Short-Term Rentals Allowed in Ouray, CO?

Yes, short-term rentals are allowed in Ouray, Colorado, but they require proper permits and compliance with specific regulations. STRs are regulated at both the city and county levels with distinct requirements depending on your property's location.

Key Points:

• City of Ouray: STRs are permitted in R-2, C-1, and C-2 zone districts with a license cap of 120 total permits
• Unincorporated Ouray County: STRs are regulated through Ordinance No. 2024-01 with a cap of 100 permits (50 Type 1, 50 Type 2, plus 25 Type 3 permits)
• R-1 Zone District (City): STRs are only allowed if they existed prior to July 17, 2019 (grandfathered as legal non-conforming)

How to Start a Short-Term Rental Business in Ouray

Step 1: Determine Your Location and Zoning

• Verify whether your property is in the City of Ouray or unincorporated Ouray County
• Check zoning requirements (City allows STRs in R-2, C-1, C-2 zones)
• Review any HOA restrictions or covenants

Step 2: Understand Permit Caps and Waitlists

• City of Ouray: Maximum 120 licenses available
• Ouray County: Maximum 100 permits (Types 1 & 2) plus 25 Type 3 permits
• If caps are reached, you'll be placed on a waitlist and processed in order of receipt

Step 3: Prepare Required Documentation

• Complete application forms
• Obtain proof of insurance
• Prepare for mandatory building inspection
• Ensure property is "Inspection Ready"

Step 4: Submit Application and Fees

• City of Ouray: $750 new license fee, $350 renewal fee
• Ouray County: Contact Land Use Department for current fees
• Applications are date-stamped upon receipt

Required Documents, Permits, Licenses, and Guidelines

For City of Ouray STRs:

Required Documents:

• Completed STR license application
• Proof of property insurance
• Building inspection certificate (conducted by city inspector)
• Property ownership documentation

Operating Requirements:

• Must use dwelling unit as STR rental for minimum 30 days per annual license period
• Annual license renewal required by February 28th
• Monthly tax reporting (LOT and Excise Tax)
• Compliance with noise ordinances and neighborhood compatibility standards

Tax Obligations:

• 4% City Sales Tax
• 3.5% Lodging Occupation Tax (LOT)
• 15% Excise Tax (for residential units not taxed at commercial rate)
• Total: 22.5% tax rate for most STRs
• Additional County (2.55%) and State (2.9%) sales tax

For Ouray County STRs:

Required Documents:

• Short-Term Rental Permit application through Land Use Department
• Compliance with Ordinance No. 2024-01
• Property must be single-family dwelling or accessory dwelling

Permit Types:

• Type 1 Permits: 50 available
• Type 2 Permits: 50 available
• Type 3 Permits: 25 available

Specific Regulations for Short-Term Rentals

City of Ouray Regulations:

Zoning Restrictions:

• Permitted Zones: R-2, C-1, C-2 zone districts
• Prohibited: R-1 zone district (except grandfathered properties from before July 17, 2019)
• Prohibited: Accessory dwelling units (ADUs)

License Requirements:

• Licenses are non-transferable (except specific exemptions outlined in municipal code)
• Properties must pass building inspection before license issuance
• Renewal inspections not required but may be requested for complaints
• 30-day minimum rental requirement per license period

Building and Safety Standards:

• Must pass initial building inspection
• Compliance with fire safety requirements
• Adherence to occupancy limits
• Proper egress and safety equipment

Ouray County Regulations:

Definition:

Short-term rentals are defined as "the rental of a single-family dwelling or accessory dwelling, or any portion thereof, for not more than thirty (30) days, where no meals are serviced or provided."

Permit Requirements:

• Prior issuance of Short-Term Rental Permit required before operation
• Properties with accessory dwelling units may require additional tap fees
• Contact water provider for specific requirements

State-Level Considerations:

• Compliance with Colorado state tax requirements
• Adherence to Colorado consumer protection laws
• Health and safety standards as required by state regulations

Contact Information for Local Authorities

City of Ouray - Community Development Department

Dan Murphy, Community Development Director Dan Reardon, Building Inspector

Address: 320 6th Ave, Ouray, CO 81427 Mailing Address: PO Box 468, Ouray, CO 81427

Phone: (970) 325-7211 Email: info@cityofouray.com Website: www.cityofouray.com

Office Hours: Monday - Friday: 8:00 am - 4:00 pm

Ouray County - Land Use and Planning Department

Physical Address: 111 Mall Road Ridgway, CO 81432

Mailing Address: PO Box 28 Ridgway, CO 81432

Phone: (970) 626-9775 Office Hours: Monday - Thursday: 8 a.m. - 4:30 p.m.

General County Contact: Phone: (970) 325-7320 Mailing Address: P.O. Box C, Ouray, CO 81427 Physical Address: Ouray County Courthouse, 541 4th Street, Ouray, CO 81427

Online Resources and Applications:

Ouray County STR Applications: us.cloudpermit.com/

Contact Form for Land Use & Planning Department: ouraycountyco.gov/forms.aspx?FID=81

Source Links

• City of Ouray STR Information: www.cityofouray.com/city_offices/community_development_vs3/short-term_rentals.php
• Ouray County STR Permitting: ouraycountyco.gov/351/Short-Term-Rental-Permitting
• Ouray County Ordinance 2024-01: ouraycountyco.gov/DocumentCenter/View/20505/Ordinance-2024-001-Short-Term-Rental-Regulations-of-Residentail-Properties

Important Notes for STR Investors:

1. Location Matters: Regulations differ significantly between the City of Ouray and unincorporated Ouray County areas
2. Limited Availability: Both jurisdictions have permit caps, creating potential waitlists
3. Minimum Use Requirements: City requires 30-day minimum rental activity per license period
4. Tax Complexity: Multiple tax obligations with significant rates (22.5% total for city STRs)
5. Non-Transferable Licenses: Licenses generally don't transfer with property sales
6. Regular Compliance: Annual renewals and monthly tax reporting required
7. Building Standards: Mandatory inspections and ongoing safety compliance

Before investing, verify current permit availability, understand all tax obligations, and ensure your property meets zoning and safety requirements for your specific location within Ouray.