When Denver rings in the new year, the city’s bureaucracy will have a new class of busybodies peering into the lives of citizens.  Government watchdogs will be hovering over the city’s nascent market for short-term rentals, and issuing fines up to $999 for home owners who do not comply with the mountain of regulation that the city council passed in August with the intent of squashing this entrepreneurial spirit of some residents looking to share their home with out-of-town visitors.

Beginning on January 1, the grace period ends for property owners who have not taken the necessary steps seek the government’s permission to rent out their property.  Rules for compliance include:

  • A short-term rental must be the owner’s primary residence
  • The owner must apply for and obtain a “short-term rental license” from the city
  • Landlords must collect a 10.75% lodging tax from short-term rental customers
  • Owners must comply with the city’s “occupational privilege tax” (yes, that is a real thing), when collecting at least $500 in revenue
  • Landlords must post their short-term rental license number on all advertisements

Enforcement will come from a variety of different angles.  The city is encouraging neighbors to report perceived violations of the short-term rental code to government officials.  (Because that encourages brotherly love….) Denver has also spent tens of thousands of dollars on a third-party software service that crawls the websites of various online short-term rental marketplaces for violations.  Finally, the small staff that is dedicated to shutting down short-term rentals is empowered to do their own sleuthing. (Because that’s not creepy at all….)

For a city that talks a big game about encouraging the entrepreneurial spirit, it sure seems to be working hard to squash this exciting and growing corner of the free market, where participants have discovered a great way to add value for one another and enhance the experience of visitors to the Mile High City.

Not to mention, it’s a huge infringement of private property rights.