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April 15, 2023

Housing Protections for Victims of Natural Disasters, Local Gov Oversight on Short Term Rentals Advance

DENVER, CO - The House today passed bills in a preliminary vote to expand reverse mortgage protections and improve local governments’ ability to hold short-term rentals to local rules and regulations.

“After the Marshall Fire, homeowners were saddled with unnecessary burdens that prevented them from putting their lives back together,” said Rep. Kyle Brown, D-Louisville, sponsor of HB23-1266. “With this bill, homeowners with reverse mortgages won’t have their loan foreclosed upon just because they lost their home in a disaster. Homeowners deserve grace after devastation due to a wildfire or flood.”

“Reverse mortgages require a homeowner to live in their home in order to draw money from their equity, which is an impossible ask for people that have lost their home due to a natural disaster,” said Rep. Naquetta Ricks, D-Aurora, sponsor of HB23-1266. “Many senior homeowners already have to take advantage of reverse mortgage income just to afford daily expenses like groceries and health care and can’t afford to build back on their own after an environmental disaster. Our bill helps vulnerable communities so they have one less burden after devastation.” 

Reverse mortgages allow older homeowners to borrow from the equity of their home. Under current law, reverse mortgages may become due and payable if the homeowner does not reside in the home they are borrowing money from as a principal residence, with an exception for temporary absences up to one year. HB23-1266 would create another exception to the residency requirement for homeowners when their property is uninhabitable due to a natural disaster or another major incident outside the control of the homeowner. This exception would allow a homeowner who is engaged in repairing the home and plans on reoccupying, listing for sale, or selling the house to live elsewhere for up to five years. 


“Short term rentals are important to Colorado mountain communities like mine for tourism, but without local governments’ ability to properly regulate these properties, short-term rentals are impacting the livability of our communities,” said Speaker Julie McCluskie, D-Dillon, sponsor of HB23-1287. “When bad actors in the short-term market create challenging situations for their neighbors, like drying up wells or overflowing septic systems, we have to do more to stick up for those who call our towns home year round. By creating pathways for our counties to collaborate with digital platforms, where short-term rentals are listed, we can increase transparency and create a housing environment that works for everyone in the community.”

“Living in a rural resort community, I’ve witnessed the increased popularity of short-term rentals, and short-term rentals play an important role in our local economy,” said Rep. Meghan Lukens, D-Steamboat Springs, sponsor of HB23-1287. “Our legislation allows counties to partner with digital platforms that host units, and gives counties the ability to remove a listing if the owners’ license is suspended or revoked, protecting owners, renters, and local communities from violations of local rules and regulations.”

A board of county commissioners already has the authority to regulate units that are rented or used for short-term stays. HB23-1287 clarifies the definition of a short-term rental and provides  counties with the authority to work with digital platforms to accurately list compliant short-term rentals.

HB23-1287 gives counties the ability to require an owner of a property, or the owner’s agent, to include a rental license or permit in any listing for a short-term rental unit on a digital platform. If a county has regulations on short-term rentals, the county would be able to require a digital platform to remove any rental listing if the owner of the listing:

  • Has their local short-term rental license or permit suspended or revoked,

  • Has received a notice violation, or a similar legal process, for not holding a valid local short-term rental license or permit, or

  • Is not allowed to list their unit as a short-term rental due to county rules.

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