Can I Run a Short-Term Rental in Lake City, Colorado?

Within the Town of Lake City, you need a short-term rental permit. The Town's ordinance (Sec. 23-5) defines a short-term rental as a unit rented for fewer than 30 consecutive days and says that operating or advertising one requires a permit approved by the town manager or their designee. I did not verify rules for properties outside town limits, so ask Hinsdale County about those. Rules can change; this is not legal advice.

What does the ordinance require?

• Permit: Each rental unit needs its own permit, issued to the specific owner and not transferable (a third party may manage the unit).
• Caps: Residential zones are capped at 43 permits, described as 15 percent of residential units at passage. One person or entity may hold no more than three residential permits. Nonresidential zones have no cap.
• Fees: $375 per unit per year in residential zones, $0 in nonresidential zones, plus a one-time $100 application fee.
• Tax: A current state sales tax license is required, and owners or managers must remit sales tax and lodging tax.
• Inspection: New registrations must pass a fire inspection before renting.
• Insurance: At least $500,000 of property liability coverage, your own or through a hosting platform.

When was it adopted?

Ordinance 2023-13 (adopted November 15, 2023) enacted the section, and Ordinance 2026-03 (February 18, 2026) amended it.

What should buyers ask?

• Does the property have a current permit, and is it transferable? (The ordinance says permits are not.)
• Is it in a residential or nonresidential zone?
• Are residential permits still available under the cap?
• What do the rental records and taxes show?

What is the bottom line?

Do not assume a rental income history transfers with a sale. Ask the Town for the current rules and the permit status before you make an offer.

Do I need a permit to rent short term in Lake City?

Yes, within town limits, per the Town's ordinance.

How much does the permit cost?

$375 a year in residential zones, $0 in nonresidential zones, plus a $100 application fee.

Is there a cap?

Yes, 43 permits in residential zones.

Is a permit transferable?

No, per the ordinance.

Connect with a great real estate agent in Lake City, Kelsey Loftis with Crystal Peak Properties. Phone: (970) 784-6768 · Email: kelseyloftis@gmail.com · Website: crystalpeakproperties.com

Source: Town of Lake City, Short-Term Rental Ordinance (Sec. 23-5, as amended by Ord. 2026-03). Confirm current rules with the Town. Not legal advice.