Short Term Rentals: Proposed Revisions to Paonia's STR Ordinance

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Proposed Revisions to Paonia’s Short-Term Rental (STR) Ordinance

A Community-Based Approach to Balancing Housing, Tourism, and Homeowner Rights

Introduction

Paonia’s current Short-Term Rental (STR) ordinance presents significant challenges for local homeowners, visitors, and businesses. While regulation is necessary to maintain neighborhood character and prevent potential issues, the current ordinance does not reflect the reality of STRs in Paonia. Instead of supporting responsible homeowners, it places unfair restrictions that could negatively impact housing flexibility, local businesses, and Paonia’s hospitable, community-driven culture.

This document outlines key concerns with the current ordinance, provides real-life examples of why it does not work, and suggests practical revisions to align regulations with Paonia’s values and economic needs.

Concerns with the Current STR Ordinance

  1. Unfair Restrictions on Homeowners Who Occasionally Rent Rooms or Homes

Many homeowners rely on STR income to afford property taxes, maintenance, and staying in their homes.

Renting a room occasionally should not be penalized—this is how Airbnb started and is still a valuable way for locals to meet new people and share their town.

  1. STR Hosts Serve as Unofficial yet PassionateTourism Ambassadors

Without a formal tourism office, STR hosts play a critical role in promoting local businesses, including:

  • Restaurants, shops, and grocery stores
  • Wineries, breweries, and cideries
  • Art galleries and creative spaces
  • Outdoor activities, festivals, and agritourism experiences
  • STRs do not replace hotels but instead provide lodging for visitors who wish to experience Paonia as a local.
  1. Paonia Does Not Have a Corporate STR Takeover Problem

In larger cities, STR bans were enacted to prevent corporations from buying up homes for full-time short-term rentals.

This is not the case in Paonia—we are not a ski-town or year-round tourist destination. The vast majority of STRs are locally owned by people who:

  • Have family ties to Paonia
  • Plan to retire here in the future
  • Use their homes themselves for part of the year
  1. Neighbor Approval for R-1 STRs Is Inconsistent and Unfair

  • The ordinance requires neighbor approval for STRs in R-1 zones, yet long-term renters (LTRs) require no such approval.

  • LTR tenants can create significant, long-term issues that STRs do not, including:

  • Junk accumulation in yards

  • Barking / unleashed dogs

  • Domestic disturbances

  • Parking congestion

  • STR guests leave after a few days if any issues arise, while LTR issues can persist for years.

  • STRs contribute significantly to the local economy, supporting businesses and events, while a poorly managed LTR property can harm a neighborhood’s character more permanently.

  1. The Ordinance Prevents Homeowners from Hosting Guests in Emergencies or Large Gatherings

Example: A Family Funeral in Paonia

  • A beloved long-time Paonia resident and former pastor of 45 years recently passed away. His entire family (more than 30 people) traveled to town from all around the country for the funeral.
  • Even in the off-season, it was a struggle to find accommodations, but in peak season, it would have been nearly impossible.
  • A local homeowner could not legally offer a spare room to help, even if they only requested a contribution to cover expenses without fear of or penalties—this is counterintuitive to Paonia’s values of kindness and hospitality.
  • Family reunions, weddings, and community events also bring large groups to town, yet the current ordinance limits flexible housing options that would make these gatherings possible.
  1. The Ordinance Unfairly Penalizes Private Community Arrangements

Example: Silver Leaf Community

  • The Silver Leaf neighborhood has a shared community house where members connect for events and is occasionally used to host visiting family and friends.
  • Guests make a donation to cover utilities, but this is not a commercial STR operation—it is private, not listed on Airbnb/VRBO, and bylaws explicitly prohibit homes to be listed as STR rentals.
  • The current ordinance could prevent even this private, non-commercial arrangement, which would be an overreach of town regulations.

A Few Real-Life Examples That Show Why This Ordinance Does Not Work

  1. Aging-in-Place Strategy: STR Helps Keep a Home Available for an Elderly Parent
  • A couple built a small, accessible home downtown for the husband’s 80-year-old mother, who may eventually need to relocate from Denver.
  • She cannot afford assisted living, and the family wants her to have a comfortable option in Paonia while remaining independent for now.
  • Because she is not yet ready to move, they cannot rent it long-term, as they need to keep it available for her at any time.
  • STR allows them to cover expenses while keeping the home in the family, ensuring it is always ready for their mother when she needs it.
  • If forced to choose between selling or LTR, they would sell, removing an accessible housing option for a senior who wants to live in Paonia.
  1. Family With Deep Paonia Ties Uses STR to Keep Their Home & Provide Seasonal Affordable Housing
  • A large, historic home in Paonia is owned by a family who currently lives out of state but has strong family ties to town.
  • The father is a law enforcement officer nearing retirement. Once retired, they plan to spend extended time in Paonia.
  • Until then, they use the home for vacations and rent it as an STR to help offset the high operating costs of maintaining a grand old home.
  • For half the year in winter, they provide affordable housing to a local resident for just the cost of utilities—a home that would otherwise be unaffordable as a long-term rental at market rates.
  • If STRs were banned, they would not convert it to a long-term rental—instead, they might sell the home, severing their ties to Paonia.
  1. Supporting Visitors Who Contribute to the Local Economy
  • A medically retired air traffic controller and remote worker enjoys spending time in Paonia visiting friends who live here. He actively supports local businesses, generously contributes to the community by dining at restaurants, shopping locally, and engaging with the town’s cultural and outdoor offerings. He likes to financially supports KVNF, Paradise Theater etc with donations.
  • However, the strict limit on STR licenses (currently capped at 30) severely restricts the availability, variety, and pricing of accommodations, making it difficult for visitors like him to find suitable lodging.
  • While he would love to spend more time in Paonia, the lack of options may force him to visit less frequently, ultimately reducing his economic impact on the community. Expanding STR availability would allow more visitors like him to contribute to Paonia’s economy and enjoy all the town has to offer.

Proposed Revisions to the STR Ordinance

  1. Create a Tiered STR System That Supports Local Homeowners

Owner-Occupied STRs (Primary Residences):

  • No permit required for renting a room up to 30 or 60 days per year.
  • Lower fees and no neighbor approval requirement.

Non-Owner-Occupied STRs (Full-Home Rentals):

  • Annual permit with reasonable regulation, but no excessive limits.
  • Cap rental days if necessary (e.g., 180 days per year, not outright bans).
  1. Remove Neighbor Approval for R-1 STRs
  • Instead, implement clear noise, parking, and disturbance rules applicable to ALL rentals (LTR and STR).
  • Ensure consistent enforcement, rather than relying on subjective neighbor approval that can have a detrimental financial impact.
  1. Permit Private Community Hosting (Not STRs) Without Restrictions
  • Private communities like Silver Leaf should be exempt when hosting guests for non-commercial purposes.
  1. Adjust Fees Based on Home Size & Use
  • Tiered fee structures that differentiate between:
  • Single-room rentals vs. full-home STRs (and square footage size)
  • Occasional STR use vs. full-time STR businesses.
  1. Allow Seasonal & Emergency Lodging Flexibility
  • Permit locals to offer rooms for events like funerals, reunions, and weddings without requiring a permit.
  1. Increase the Number of STR Permits or Remove the Cap Altogether
  • The current cap of 30 STR licenses is overly restrictive and does not reflect real market demand or the needs of visitors and homeowners.
  • Most STR owners do not make a large profit, if any—many simply use STRs to offset expenses, maintain family ties to Paonia, or keep homes available for personal use.
  • Financial sustainability naturally regulates the number of STRs—if it is not profitable or beneficial for a homeowner, they will not continue operating an STR.
  • Free market forces, not arbitrary caps, should determine STR availability:
  • Homeowners will not buy or keep properties as STRs if it does not make sense for them financially or personally.
  • There will always be natural attrition as owners change plans, shift to long-term rentals, or sell their properties.

Recommended Approach:

  • Increase the cap significantly or remove it altogether, allowing the market to adjust naturally.
  • Conduct periodic reviews to assess real STR impact rather than imposing rigid, unnecessary limitations.

This approach ensures Paonia remains accessible to visitors, supports homeowners responsibly, and allows the local economy to benefit from tourism without unnecessary government overreach.

Conclusion: A Balanced Approach That Benefits Everyone

Paonia’s hospitable, community-oriented culture should be reflected in its STR policies. Instead of unnecessary restrictions, the town should implement fair, well-regulated policies that allow responsible STR use while protecting neighborhood integrity. And championing / supporting the STR owners that are important assets to the town in terms of promoting tourism and supporting our local businesses. STRs are not the problem—they are part of the solution to Paonia’s housing, tourism, and economic growth.

Next Steps

We urge the town to consider these real-life examples, data, and proposed revisions and work closely with STR hosts / community members before finalizing any new STR regulations. A balanced approach is possible—one that supports homeowners, businesses, and Paonia’s welcoming community. We all love our town and want to see it thrive and prosper. Our shared experience and community-focused intentions will be a valuable asset to the Town in revising the ordinance.

Thank you!

Julie and Marc Bennett

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On Mar 19, 2025, at 14:41, B Rose wrote:
Hi Julie Calla forwarded me the note you put together on str’s Thank you for taking the time to do that…when we first moved to Paonia we hosted SEI students from Columbia and Mexico and Hong Kong and Canada and Egypt How it enriched our lives is beyond measure plus it helped to get us out of debt with private education tuition for our youger daughter We have voted yes and turned in our ballots on Monday Thanks again brose

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Chris writes:

Hi all! Thanks to the many of you that have been working so hard on all of the efforts! As one of the out-of-towners, I haven’t been as involved as would be ideal, but I am so appreciative of your efforts.

I am writing today because I just wanted to share one thought: perhaps one talking point to consider (If when and where appropriate) is that now is simply not the right time to reduce the ability of locals and homeowners to occasionally rent their properties short term because of the shifting national economic dynamics that will be affecting all of us in the near future.

It is very likely that at least in the midterm, the economy and associated consumer spending will slow down significantly. And it is increasingly likely that the US will experience a recession. Many of us likely lived in Western Colorado or other mountain towns during the last recession.
During these times, it is unnecessary, and harmful to limit business and earning opportunities – both for local families and for the entire community.

While it’s atypical to bring national politics into local decisions, Airbnb restrictions are really policies that are designed to be responsive to a hot economy, booming time for tourism, and post-pandemic demand. All of those factors are in reverse. If restrictions on STR‘s are enacted, they will be hitting at a time that they are no longer necessary, because the fundamental dynamics driving demand have shifted. Rather, they will be hitting at a time when all of us are likely to be struggling a bit. Sticking with the STR rags then becomes a matter of actively hurting locals and homeowners, and saying no to tourism at a time when we are all really going to be wanting more of a share of a dwindling resource.

I’m not sure whether this is something worth mentioning at the council table, or trying to describe to the voting public… But it is reality, in my opinion and would ideally be considered in what happens with local STR policy.

Please note that this is entirely my personal opinion.

Thanks for considering,

Chris

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Thank you, Julie & Marc, for this objective Paonia-centric approach to both STR & LTR private properties… which can -also- be applied to STR and/or LTR Auxilliary Dwelling Units on private properties.

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Great thoughts, Julie. I would add, Neighborhood approval is not fair. There is no neighborhood approval necessary when someone buys a home and moves in, or decides to LTR. There his no neighborhood approval necessary when someone has guests. STR’s are the same. People renting rooms or homes as STR’s would likely have rules within their STR, such as NO LARGE PARTIES, or no excessive noise after 10 pm, or whatever might be necessary for the particular location. We do not need governmental overreach to tell us what we can and cannot do. People need to be reasonable with each other; that means not complaining unnecessarily, and not being unnecessarily loud. This is like the “train” going through town. If you relax about it, after a short time, it doesn’t even bother you. If you get all up in a knot, it will drive you crazy.

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