Wheat Ridge to legalize Airbnb investment properties

8 Replies | Denver, Colorado

Wheat Ridge is joining the small list of Denver area cities that allows Airbnb investment properties. And to me, it's the most interesting city yet.

I wrote about Arvada and Littleton legalizing short-term rentals in non-owner occupied homes in 2020. But Wheat Ridge is intriguing because it so close to Denver. Specifically, there are Wheat Ridge homes within a 5-minute drive of Tennyson Street in the Berkeley neighborhood, and 32nd Street in Highlands, some of the best performing STR markets in the metro area. Not a bad place to buy a home and rent it full-time on Airbnb.

A few highlights of the proposed law:

  • Only one whole-house Airbnb investment property per owner. 
  • No limit on the number of nights you can rent per year.
  • There will be a cap on the number of investment STRs per council districts to 2% of the total housing stock in that district.
  • Registration for licenses will go live May 1. 

A glutton for boring ordinance research? Read the actual ordinance here. Thoughts out there?

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@William Beck

You're from my neck of the woods. I grew up in Springfield, MO. 

Most HOAs in Denver and surrounding areas -- be it for SFH neighborhoods or condos or townhomes -- have a restriction on short-term rentals or Airbnb. I've been watching laws and working with vacation home investors for years here, and I've come across exactly four condo buildings in Denver that allow for Airbnb.

I did just get a buyer under contract on a new construction SFH in a small HOA in Arvada, a city that allows STR investments, and that HOA explicitly allows Airbnb. But that's an exception, not the rule.

I imagine it's different out there in Branson. 

@Jeff White

Interesting take. I know Ryan Winzenburg posited that idea in a different forum about Airbnb. It's an intriguing idea. But, while I'm not a hater on government, I do think that's giving local governments too much credit.

I've talked to the planning departments in Littleton and Arvada and now Wheat Ridge. I ask them about the impetus for them allowing short-term rentals when other Denver area cities essentially ban short-term rentals. Their answers fall into two categories:

  • The council members genuinely don't believe government regulation of STRs should be that strict. I see all Airbnb laws on a spectrum, and many of these cities just fall a little further away from the Denver/primary-residence end of that spectrum; or
  • The city makes a pragmatic decision to not deal with the headache of enforcing a primary residence rule. The Wheat Ridge planner was explicit about this. The city looked at Denver's difficulty with defining and enforcing the primary residence rule and said, "No thanks." 

Great news! Thanks for sharing @James Carlson . Wheat ridge will be a great location on the west side of town for STRs. I love the light rail aspect in both Arvada and Littleton, but as you mentioned Wheat Ridge neighbors the Highlands, Berkeley and Edgewater, not to mention its own commercial district on 38th. @William Beck there are plenty of non regulated homes without HOA in desirable areas of Wheat Ridge.

@David Williams

I agree. With all of the above. The G Line in Arvada is great. (Got a buyer under contract on a new-build STR walking distance to the light rail in Arvada, and I think that place will kill on Airbnb.) Same with the D Line down in Littleton. And both have charming little downtowns.

But Wheat Ridge's proximity to the hot spots of Denver can't be beat. And almost all residential neighborhoods on the east side of Wheat Ridge are older and with no HOAs to restrict the new Airbnb law. 

Do either of you know of any new builds that the HOA is allowing STRs? We're on the hunt! We don't have a problem making it a primary residence. It does seem like all HOAs are against the STRs and are going to 60 day min lease to stop all STRs.

@Michelle Azubuike

I actually do know of some new builds in Arvada, just northwest of Denver, that allow Airbnb. They sold out of their first phase. (I have a buyer who bought there and is doing really well with his short-term rental.) But they're opening up phase two for purchases in January. I'll DM you to chat further.