Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: March 5, 2026 Agenda Title Introduction, first reading, and consideration of a motion to order published by title only Ordinance 8743 amending Sections 10-3-19, "Short-Term Rentals," permitting tenants to apply for Festival Lodging Rental Licenses and 4-20-18, ”Rental License Fee,” B.R.C. 1981, by adding an associated fee; and setting forth related details

Staff Contact    

Chris Meschuk, Deputy City Manager, City Manager’s Office Sarah Geiger, Senior Counsel, City Attorney’s Office Brad Mueller, Director, Planning & Development Services Tonia Pringle, Senior Project Manager, Planning & Development Services

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to introduce and order published by title only Ordinance 8743, amending Sections 10-3-19, "Short-Term Rentals," permitting tenants to apply for Festival Lodging Rental Licenses and 4-20-18, ”Rental License Fee,” B.R.C. 1981, by adding an associated fee; and setting forth related details

Executive Summary The purpose of this item is to consider Proposed Ordinance 8743 expanding the use of the recently established festival lodging rental license, a type of short-term rental license, for the limited purpose of allowing both tenants and principal owner home rentals during large festival special events, such as the Sundance Film Festival, in the city to obtain festival lodging rental licenses. This expansion to allow tenants was an area several council members expressed interest in as a next step during the public hearing and adoption process for the festival lodging license in Oct. 2025. This license type is based on the existing festival lodging rental license, which is a form of short-term rental license, and further reduces the requirements and limitations on the license to allow for tenant participation in festival lodging opportunities, with property owner consent. This expansion of the festival rental license to tenants will:  Retain all the existing requirements of the festival lodging license  Allow tenant occupied residences to hold a license concurrent with a longterm rental license with property owner consent  Have license issued to tenants valid for one year to match typical lease terms. The intent of this license expansion is to allow additional lodging opportunities for attendees to large festival events in the city, while balancing the desire to ensure that the primary use of most residential dwelling units remains housing for residents of the city. The second reading and public hearing on Proposed Ordinance 8743 is scheduled for April 2, 2026.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved, the proposed ordinance will be presented at second reading and a public hearing on April 2, 2026

Define and adopt a modified motion

Council would need to define any modifications or amendments to the draft motion language. This will likely require staff to bring back an amended version for first reading or as amended on second reading.

Deny the motion or take no action

If this motion is denied this ordinance will not be introduced or scheduled for second reading.

Refer back to staff

If council refers this item back to staff any direction provided by council will be taken and amendments and adjustments will be made.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area Livable – This proposed ordinance ensures that the diversity of housing types for residents in the city is balanced with the interest of providing housing opportunities for visitors to our community. Economically Vital – This proposed ordinance allows visitors to stay in Boulder while attending large festival events in the city. Citywide Strategic Plan This item supports Strategy 14. Enhance collaborative efforts to support an inclusive, healthy, sustainable, and resilient local economy that builds on core economic strengths, promotes economic mobility, and aligns with community values and priorities. Staff Notes N/A

Alignment with Additional City Plans The expansion of a new festival lodging rental license supports several policies in the Boulder Valley Comprehensive Plan related to housing and economic vitality. Specifically:

7.10 Housing for a Full Range of Households – The festival lodging rental license allows all residences including tenants under a long-term lease and all ownership types including non-owner occupied housing such as second homes and corporate ownership; however, it limits the usage to only when a

large festival special event is occurring, to ensure that the majority of housing in the community remains for residents of Boulder. 5.09 Role of Tourism in the Economy – The festival lodging rental license supports the local economy through the creation of additional lodging opportunities for visitors during large festival special events in Boulder, rather than visitors staying outside Boulder and commuting in.

City Council History The festival lodging rental license item was brought before council in September 2025 and adopted in October 2025 as a license allowed only for property owners. This update to that approved ordinance will further remove restrictions and allow tenants to participate in festival lodging in properties that hold a valid long-term rental license. September 4, 2025 City Council Agenda This item is the direct result of the city’s award of becoming the new home to the Sundance Film Festival and the need and desire to accommodate large, longduration special events in the city that could exceed the current lodging capacity of the city.

Analysis Proposed Ordinance 8743 builds upon the existing short-term rental license of the city and recently adopted festival lodging rental license. There are currently 700 short-term rental licenses in the city. These licenses are limited to properties owned by individuals or trusts, are owner-occupied homes and have limitations on the duration of use. A new festival lodging rental license, a form of short-term rental license, went into effect in November 2025 expanding the types of ownership, allowing owners with second homes in Boulder to apply for a license, minimizing the requirements for application, and limiting when the license can be used to only when the city has approved a festival event occurring in the city, plus a buffer of 10 days before and 9 days after the event. The license is limited to a total of not more than 29 days per year. There are currently 144 applications for festival lodging rental licenses which excluded the opportunity for renters. This update to the festival lodging rental license will expand the use to include tenant-occupied properties that hold a valid long-term rental license, as long as the landlord has approved the tenant to obtain a license.

In examining the potential 90,000 attendees of the Sundance Film Festival, it is anticipated that roughly one-third of attendees will travel from out of state to attend the event. The city has hotel lodgings of roughly 2,900 rooms, with an additional 74,000 rooms within 40 miles of Boulder. While not all attendees are expected to stay in Boulder, creating additional opportunities for visitors to stay within walking distance to alternative transportation options to attend the Festival is of interest to the city as well as creating additional dining and retail sales benefits to the community. This license will reduce transportation and climate impacts of visitors and benefit the community through increased revenue opportunities. Below is a comparison of the existing short-term and festival lodging rental licenses of the city and this proposed update to the festival lodging rental license: License Provision

Who Can Apply

Existing Short Term Rental License

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Ownership Proof

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Application  Requirements

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

Existing Festival Lodging Rental License

Proposed Addition of Tenant to Existing Festival Lodging Rental License  Tenants with owner attestation that festival license is allowed.

Natural person whose name is on the deed. Trust, if beneficiary is a natural person. Not-for-profit corporation.



Any ownership type.

Documentation showing proof of requirements above, including driver’s license, documents proving eligibility such as a deed, trust paperwork, sworn statement, or corporate status. Certification of life safety equipment such as smoke and carbon monoxide detectors. Occupancy shall not exceed what is permitted in the adopted International Property Maintenance Code. Sleeping areas must be “habitable” as defined in the adopted International



Affidavit of ownership eligibility.



Certification of life  safety equipment such as smoke and carbon monoxide detectors. Occupancy shall not  exceed what is permitted in the adopted International Property Maintenance Code. Sleeping areas must be “habitable” as







None

Certification of life safety equipment such as smoke and carbon monoxide detectors. Occupancy shall not exceed what is permitted in the adopted International Property Maintenance Code.

 



Property Maintenance Code. Only one rental license per property. ADUs are only eligible if established prior to 2/1/2019 and meet certain requirements. Must be the applicant’s principal residence.

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None

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Sleeping areas must be “habitable” as defined in the adopted International Property Maintenance Code Does not need to be the applicant’s principal residence. A valid long-term rental license must be held concurrently. None

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4 years



1 year

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$190 application fee + $25 business license

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$75 application fee + $25 business license

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





Annual requirement

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Annual affidavit certifying  principal residence.

Duration



4 years $190 application fee + $25 business license + $20 annual affidavit fee

License Cost   

defined in the property. maintenance code Does not need to be the applicant’s principal residence. Only one rental license per property.

Based on how tenant rentals work in other cities, it is likely that landlords who choose to allow tenants to obtain festival lodging licenses will require a lease addendum, with a requirement for a revenue share. In other markets, that revenue share is typically 1025%.

Equity Analysis Staff utilized the city’s rapid racial equity assessment as a part of creating the new festival lodging rental license. The primary beneficiary of this license will be property owners and long-term housing tenants who rent their property during a festival event, providing some level of equitable access to residents in various income categories. A potential burden could be for residents not benefiting from participating in festival lodging, or for potential buyers of properties if there is reduced housing stock for sale.

Statistically, in Boulder, property owners are more likely to be white, and residents who are renters are a higher percentage proportion of non-white, and lower income than property owners. The risk of the expanded use of the festival lodging rental license type could be the displacement of renters in long-term rental properties to allow festival lodging rentals of units, speculating on a higher per-day rental income that could exceed long-term rental income. The proposed ordinance maintains that a festival lodging rental license cannot be used for more than 29 days per year and retains the requirement that other rental licenses have of certifying that they meet the life-safety and occupancy and habitability requirements in the International Property Maintenance Code.

Fiscal Note Estimated Fiscal Impact Narrative In the September 2025 memo, the city assumed the festival lodging rental license would receive 1,100 applications from Q4 2025 through Q4 2027. This estimate equates to $209,000 worth of application fee revenue. As of 18 February 2026, the city has received 144 applications, equal to $27,360 in application fee revenue. This proposed ordinance will expand eligibility for the festival lodging rental license with a less restrictive festival tenant rental license. The application fee for an annual festival tenant rental license is proposed at $75. This is the amount estimated to meet the full cost recovery of city expenses (e.g., staff time) to process applications, review documentation, and other administration functions. Expanding the eligibility of the festival lodging rental license will likely expand the number of applications received and increase the estimated application fee revenue. Continuing with the assumption of 1,100 festival lodging rental license applications ($190 per application every four years), plus an additional 500 festival tenant rental license applications ($75 per application annually), the estimated revenue of the expanded program is $227,500 over a two-year period (Q4 2025 to Q4 2027). The revenue and expense impacts explained here are quantitatively displayed in the below tables for the P&DS Fund. If additional staffing resources are needed to accommodate the increase in applications, it would be funded through the application fee revenue. Aside from application revenue, rentals less than 30 days are subject to the Short-Term Rental Tax, as required in Chapter 3-15, B.R.C. 1981. This tax is seven and one-half percent (7.5%) on the price paid for short-term rental lodging services. At this time, the

city does not have an estimate for what this revenue could amount to; however, for modeling purposes, assuming there are 1,600 licenses, each unit is occupied for 10 nights, and are rented at $500/night, this will result in approximately $600,000 in annual short-term rental tax revenue. This revenue goes to cover the administrative costs of the program, and any additional funds are placed in the city’s affordable housing fund.

Current Year Estimated Fiscal Impact Fund(s): 2120FD Department(s): Planning & Development Services Program(s): All P&DS programs

Item Beginning Fund Balance Total Forecasted Revenue Total Estimated Expenses Ending Fund Balance(s) After Reserves FTE

FY 2026 Budget

FY 2026 Estimated Impact

FY 2026 Net Change

$18,200,885

$0

$0

$15,179,491

$113,750

$15,293,241

$17,735,173

$113,750

$17,810,173

$12,646,701

0

$12,646,701

122.65

0

122.65

Three-Year Estimated Fiscal Impact

Item

FY 2026

FY 2027

FY 2028

Total Forecasted Revenue Total Estimated Expenses Net Estimated Impact

$113,750

$113,750

$113,750

$113,750

$113,750

$113,750

$0

$0

$0

Climate, Resilience, and Sustainability Considerations Housing additional visitors during festival events within the city, rather than outside the city in the region, will reduce the climate impacts of visitors, including carbon reduction and less vehicle miles traveled, as well as traffic impacts into and out of the city.

Community Engagement Staff has used the “inform” level of engagement for this proposed ordinance. This level states: “To provide the public with balanced and objective information to assist them in understanding a problem, alternatives, opportunities and/or solutions.” The promise to the public is that the city will keep them informed. This level of engagement was selected because short-term rentals are already allowed in the city, and this ordinance only creates a limited expansion of an already existing license type. Additionally, there are not considerable options or alternatives other than not allowing additional short-term rental options during large festival events. Staff has consulted with the Boulder Area Rental Housing Association on the program design, as well as working with a short-term rental listing platform provider who supports rental apartment programs in other locations.

Workplan Considerations This item has been accommodated within the existing workplan. Implementation of this license will require approximately 60 hours of staff time to develop the application forms and configure software to facilitate and track licenses. Once implemented, staff will need to review, process, and enforce licenses. Depending on the volume received, additional temporary staffing resources may be necessary to support administering this new license during the initial application wave. Any additional staffing resources would be funded by the application fees of the license, but the position(s) would need to be approved through review of the city’s annual budget.

Next Steps for City Council Second reading and public hearing for Proposed Ordinance 8743 is set on council’s agenda for April 2, 2026.

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Attachments A - Proposed Ordinance 8743