After months of discussion, the town of Dillon has finalized its short-term rental regulations. A new ordinance sets up a fee structure and introduces an occupancy cap for short-term rentals. The first reading was unanimously passed by Dillon Town Council on Tuesday, Feb. 15, with no further comments as part of the meeting’s consent agenda.

The new regulations come from the town seeing a large influx of rental properties that have created issues with waste, noise, parking, access to housing and more. The town stated in a memo that Dillon has 1,356 housing units and 357 of them, or 26%, had a short-term rental license as of mid-November.

One way the town aims to solve those issues is by increasing the annual licensing fee from $50 to $250. The cost will help cover a complaint hotline and staff time and puts the fee in line with the rest of Summit County. According to past reporting, Frisco charges $250 per license. In Silverthorne, rates range from $150 to $500 depending on the number of bedrooms, and Breckenridge’s license is $400 per bedroom.

Short-term rental applications will also include new questions about the unit, such as whether it will be partially rented and the number of bedrooms. The application used to include how many nights it is anticipated the unit will be rented, but that was removed because the town can get that data on its own.

A main focal point of the ordinance is that Dillon is no longer the only local government that doesn’t cap the number of individuals allowed in short-term rentals. Similar to Silverthorne, Dillon will now limit rentals to two occupants per bedroom plus an additional two occupants.

Raising the limit to two people per bedroom plus four more guests was briefly discussed at the Feb. 1 work session, but council decided to stick with the lower number of occupants without exceptions. Finance Director Carri McDonnell suggested the higher number because staff members were worried about opening the door to exemptions for units with large rooms that could sleep many people.

Dillon Mayor Carolyn Skowyra said at the work session that it’s not fair for larger, one-bedroom places to not pay their share of tap fees that a two-bedroom does and that the units should be converted. She also said it’s unlikely a large group of people would stay at small rental.

“Nobody here is going to sleep a six-person family … in a one-bedroom condo,” Skowyra said. “That’s not going to happen. Even if that bedroom is large, you’re not going to live with six people in one bedroom.”

Council member Steven Milroy agreed, saying the cap limits a party-house feel. He also added that it’s in the owner’s best interest to formally make it a two-bedroom unit since property values will increase.

Council member Renee Imamura then said she felt bad for large families, but council member Kyle Hendricks responded that those families still have options.

“There’s a lot of short-term rentals around,” Hendricks said. There are a lot of options for them to get a two-bedroom (that is) still cheaper than the resorts. I don’t think there is much room for them to complain.”

Tied to the occupancy limit is a parking requirement. Short-term rentals must now provide permitted or designated parking spots at a rate of one space per bedroom plus one additional space. Studios only need to require one designated parking space. The required spaces can be lowered for every two people removed from the short-term rental unit’s maximum occupancy limit.

If the owner cannot provide the necessary required parking, then they can have guests park at town-owned lots. However, owners will have to pay a $300 per space short-term rental annual parking fee at the time of the license application. The fee is $300 per space based on the town’s costs of maintenance, stripping, overlays, snow removal, administrative costs and enforcement in their parking lots.

The new ordinance also establishes penalties of $20 per month and an interest rate of 1% per day for late payments on short-term rental licenses, with revocation of the license after 30 days.

A second reading is set for March 1.