Is Rental Arbitrage Legal in Colorado Springs, CO?
A city permit, issued to a specific owner, with stricter rules for units the owner doesn't live in. Colorado Springs issues owner-occupied permits to owners present at least 185 days a year, and non-owner-occupied permits that aren't allowed in single-family zones and need 500 feet of separation. The permit costs $124.95 a year, and city staff have 10 business days to review an application.
Can a renter do rental arbitrage here? No. Renters cannot get a short-term rental license here. Only owners can host.
Requirements
- An annual short-term rental permit: $124.95, applied for online through the city's Applications and Reviews portal
- Signed checklist and owner acknowledgment, and a signed STR affidavit
- Proof of primary residence for owner-occupied permits: two of a driver's license, state ID, vehicle registration, voter registration or a dependent's school registration
- Proof of at least $500,000 in liability insurance
- Proof the unit is listed on a hosting platform
- A Certificate of Occupancy and a lawful dwelling unit; vacant properties can't apply
- A city sales tax license if you do not use a marketplace facilitator that collects the tax
- A 24-hour contact on file who can respond within 1 hour in an emergency
- Weekly residential trash service, with driveway parking used before the street
- Good Neighbor Guidelines posted with the permit number and emergency contact
- Notify the city within 3 days of changes that affect the permit
- Owner-occupied: the owner is physically present at least 185 days a year (waivers for active-duty military)
Restrictions
- Non-owner-occupied units can't be in single-family zones (R-E, R-1 6, R-1 9) if applied for after December 26, 2019
- Non-owner-occupied units need 500 feet of separation from other non-owner-occupied rentals
- Caps per property: one listing in single-family zones, two in R-2, up to four in multi-family, and two per owner in a condominium
- No citywide cap on the number of permits
- Maximum occupancy is two guests per bedroom plus two per dwelling unit, and never more than 15
- Properties with an accessory dwelling unit can't get a permit as of June 30, 2025
- No weddings or large social or commercial events
- The permit belongs to a specific owner and can't be transferred or assigned
- No grace period for late renewals, which can bring a Code Enforcement notice, and a non-owner-occupied permit can be forfeited
Taxes and Fees
- Sales tax is collected by the booking platform if it is a marketplace facilitator; hosts who book directly need a city sales tax license
Official permit or registration page
Next Step
Legal is one half of the decision. The other half is whether the deal earns enough to be worth the risk.
Sources
Frequently Asked Questions
- Can a Renter Do Rental Arbitrage in Colorado Springs?
- Probably not. The permit is issued to a specific owner and can't be transferred, and the city describes both permit types for owners. Ask the city before relying on a lease, because the page doesn't say outright that tenants can't apply.
- How Much Does the Permit Cost?
- $124.95 a year.
- What Is the Owner-Occupied Rule?
- The owner must be physically present at least 185 days a year. Active-duty military get waivers for up to one year if stationed outside El Paso County.
- What Is the Separation Rule?
- Non-owner-occupied rentals need 500 feet from other non-owner-occupied rentals.
- What Happens If I Miss the Renewal?
- There is no grace period. A late renewal can bring a Code Enforcement notice, and a non-owner-occupied permit can be forfeited.