A nonprofit representing Colorado property owners has filed a lawsuit against the town of Breckenridge challenging ordinances that have set limits and imposed other regulations on the short-term rental market.

Colorado Property Owners for Property Rights filed the lawsuit Oct. 31 in the state’s 5th Judicial District Court arguing that Breckenridge’s short-term rental ordinances are “preempted by state law, arbitrary and irrational, discriminatory (and) lacking support from study and data.”

The lawsuit names the town of Breckenridge as the sole defendant. Colorado Property Owners has about 300 members including some who are owners holding interests in residential property in Breckenridge, according to court documents.

“We believe that the town’s short-term rental ordinances violate Colorado law that expressly prohibits local governments from imposing rent controls,” Colorado Property Owners president Mary Waldman said in a statement. “The town’s actions are intended to suppress the short-term rental market in an attempt to force property owners to provide their units as longer term rentals at lower rates than the current market allows.”

The lawsuit seeks to invalidate two ordinances passed by the Breckenridge Town Council in 2021 and 2022. The ordinances restrict the number of nonexempt short-term rental licenses in Breckenridge to 2,200 and divide the town into four short-term rental zones, each with different caps on short-term rentals.

Colorado Property Owners argues in the lawsuit that the regulations qualify as rent control and therefore violate state law that prohibits towns from imposing rent control. The plaintiffs also argue that the regulations violate provisions of the state and U.S. constitutions.

Breckenridge town attorney Kirsten Crawford noted the town is still reviewing the lawsuit but said, “There is a presumption that these regulations are constitutional and nothing in the complaint on an initial read would persuade me otherwise.”

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Asked about the claim that the short-term rental regulations qualify as rent control under the law, Crawford added, “That statutory scheme does not apply here.”

Colorado Property Owners acknowledge in court documents that Breckenridge instituted the ordinances in an effort to stymy “a serious and disturbing reduction in the availability of workforce housing.” But the plaintiffs claim the town didn’t properly study short-term rentals’ impact on workforce housing.

“Property owners, managers and real estate professionals spent more than 30 hours over several town council hearings testifying and sharing their personal and professional knowledge and offering relevant compromises,” Colorado Property Owners board member and Breckenridge homeowner Greg Lawless said in a statement. “But council rejected these opinions and passed their predetermined agenda anyway.”