Aspen STR Moratorium and the Lottery Permit System

Aspen, Colorado's STR regulation underwent a significant 2022-2023 transition. The 2022 moratorium paused all new permit issuance amid workforce-housing crisis concerns. The resulting 2023 ordinance created three permit categories: Owner-Occupied STR (uncapped, must be primary residence), Lodging-Exempt STR (commercially-zoned property, treated as a hotel-equivalent), and Classic STR (non-owner-occupied residentially-zoned, hard-capped citywide and allocated through annual lottery). The Classic STR cap is the binding constraint — it represents pre-moratorium operating count and doesn't grow. New investor-only STRs in residential zones are effectively unavailable except by acquiring an existing permitted property.

Licensing & Registration

Owner-Occupied STR: $150-$300/year, primary-residence proof, no cap. Lodging-Exempt STR: $300-$500/year, commercial-zone properties only (Hyatt-area, certain mixed-use blocks), no cap. Classic STR: lottery-allocated, $300-$500/year, capped citywide at the pre-moratorium count. The lottery is highly competitive — typical 5-10:1 application-to-permit ratios. Lottery winners must operate within 12 months or forfeit the permit.

Lodging & Occupancy Taxes

Colorado state sales tax 2.9% + Pitkin County 3.6% + Aspen city 2.4% = 8.9% combined sales tax. Aspen Tourism Promotion Tax 2% + Pitkin County lodging tax 1% = 3% lodging-specific. Effective Aspen STR lodging tax: ~12%. Stays of 30+ days are exempt from tourism promotion + lodging components. Airbnb collects Colorado state and Aspen city taxes; Pitkin County collection varies.

Penalties & Enforcement

Operating without an active permit: $1,000-$5,000 escalating per offense. The city's enforcement intensity is high relative to the city's small geography — Aspen's compliance team can effectively monitor the entire active-listing universe. Permit revocation triggers a 24-month bar on reapplication for the same property.

Recent Changes

Aspen's permit-cap framework is politically stable through 2025-2026. The workforce-housing crisis remains the dominant concern; STR permit caps are unlikely to expand. Investors entering Aspen typically acquire existing Classic STR permits as part of property purchase, paying a premium reflecting the permit value. Owner-Occupied permits remain a viable house-hack pathway.

Tax Strategy for Compliant Investors

Even within Aspen's regulatory framework, properly-licensed STR investors retain the federal tax stack. Cost segregation accelerates depreciation, the STR loophole can convert losses to active-income offsets for materially-participating owners, and 100% bonus depreciation under OBBBA applies to all reclassified 5- and 15-year assets. See cost segregation for Airbnb properties for the full playbook.

Frequently asked questions