Overview: Are Short-Term Rentals Allowed in Craig, CO?

Short-term rentals are permitted in Craig, Colorado. The City of Craig is developing a citywide STR ordinance (workshopped January 28, 2025). Current thinking (draft/potential framework) indicates:

• STRs would be allowed in all zoning districts, including the Residential Low Density (RLD) district.
• An Accessory Dwelling Unit (ADU) may be operated as an STR, but it would be separately regulated.
• Primary STRs and Hosted STRs would follow the same rules.
• An existing legal Bed & Breakfast at 403 Taylor Street would not need STR registration if proof of operation as a B&B can be provided; otherwise, it must comply with the STR regulations.

Status note: The City Council will hold a public hearing before adopting final regulations; details could change through the public process.

Source:

• cms3.revize.com/revize/craigco/1A.%20STR%20Workshop%20Minutes%201.28.25.pdf

How to Start a Short-Term Rental Business in Craig

If you’re considering launching an STR in Craig, here’s a practical, step-by-step approach under the proposed framework and Colorado rules:

1. Confirm Zoning and Eligibility

• Ensure your property is within Craig city limits and within a zoning district that allows STRs (the workshop indicates all districts, including RLD, would allow STRs).
• Confirm the use is permitted under HOA covenants; HOAs supersede local STR rules per the draft.

2. Understand Occupancy and Parking

• Proposed occupancy cap: two individuals per bedroom plus two additional (unless otherwise approved).
• Proposed parking: one hard-surface off-street parking space per bedroom, up to four spaces. The Commercial Downtown (CD) district would be exempt from off-street parking requirements.

3. Prepare for Registration and Annual Fees

• Proposed registration fee: $75 per year application, plus $150 per bedroom.
• The annual fee would be deposited into the Building Department (inspection cost) and the general fund (bedroom fee), per discussion.

4. Plan for Inspections and Compliance

• Initial inspection would be required; potential annual sign-off may be required thereafter.
• Booking agents (e.g., Airbnb/VRBO) would be prohibited from advertising unregistered STRs.

5. Taxes and Third-Party Listing

• STRs would be treated like lodging businesses; you must ensure third-party listings collect all applicable taxes: city, county, state sales taxes, Local Marketing District (LMD), and lodging taxes.
• Maintain documentation showing tax compliance in your listings.

6. Contact and Watchdog

• Register with the Building Department and the City Clerk (phone/email links provided below).
• Watch for the adopted ordinance after the public hearing process.

Source:

• cms3.revize.com/revize/craigco/1A.%20STR%20Workshop%20Minutes%201.28.25.pdf

Required Documents, Permits, Licenses, and Guidelines

Draft/potential requirements per the City:

• Business License/STR Registration

  • Annual STR registration application (fee: $75 + $150 per bedroom).
  • Registration renewal each year.

• Permits and Inspections

  • Initial inspection of the property (interior/exterior as applicable).
  • Potential annual sign-off inspection.

• Compliance Documentation

  • Proof of tax collection/remittance setup in your listings (city, county, state sales taxes, LMD, lodging).
  • If applicable, proof that the property operates as a legal Bed & Breakfast (to avoid STR registration).

• Operational Constraints (Proposed)

  • Occupancy cap: two individuals per bedroom plus two additional.
  • Parking: one off-street space per bedroom (up to four), with CD exemption.
  • HOAs supersede the ordinance; if HOA prohibits STRs, the city rules do not override.

• Advertising and Enforcement

  • It is unlawful for booking agents to advertise unregistered STRs.
  • Enforcement includes administrative checks on third-party platforms and coordination with the Police Department.
  • Penalties will be outlined in the final ordinance.

Source:

• cms3.revize.com/revize/craigco/1A.%20STR%20Workshop%20Minutes%201.28.25.pdf

Specific Regulations (City, County, and State)

City of Craig (Moffat County) — Proposed Framework

• Zoning: Allowed in all districts, including RLD.
• ADU: Permitted as STR but treated separately.
• Types: Primary and Hosted STRs subject to the same rules.
• Occupancy: Two individuals per bedroom plus two additional.
• Parking: Off-street spaces at one per bedroom (up to four); CD district exempt.
• Fees: $75 application + $150 per bedroom annually.
• Inspections: Initial inspection; potential annual sign-off.
• B&B Exception: 403 Taylor Street Bed & Breakfast exempt if proof of operation is provided.
• Advertising: Booking agents may not list unregistered STRs.
• Enforcement: Administrative reviews of listings; coordination with Police.
• Tax Compliance: Ensure city, county, state, LMD, and lodging taxes are collected via third-party platforms.
• HOA Supersession: HOA rules prevail.

Source:

• cms3.revize.com/revize/craigco/1A.%20STR%20Workshop%20Minutes%201.28.25.pdf

Moffat County

• County-specific STR regulations are not documented in the provided content. Investors should verify directly with Moffat County if any county-level rules apply.

State of Colorado

General state-level obligations that affect STRs statewide:

• State Sales Tax: 2.9% (Colorado’s state sales tax rate is among the lowest in the U.S.).
• Local Lodging Taxes: Counties and municipalities may impose lodging taxes. Examples in Colorado resort towns are substantially higher than the state sales tax; e.g., Steamboat Springs total lodging tax rate is approximately 20.4%, and Aspen’s is approximately 21.3% (vs. about 11.3% for hotels), according to industry reports.
• Excise Tax Proposal: A state bill expected to allow counties/statutory cities to create an excise tax on industries could be reintroduced. If enacted, county commissioners could impose excise taxes with no statutory ceiling, affecting STR businesses.
• Property Tax Bills:
  • Senate Bill 33 (2024) proposed reclassifying STRs with more than 90 nightly stays per year from residential to lodging property tax rates; the bill did not advance but could reappear due to budget pressures.
  • House Bill 1299 proposed applying lodging tax rates only to owners of multiple STR properties; it did not advance but indicates ongoing legislative interest.
• Regulatory Environment: House Bill 1117 (2021) enables local control over STRs, which has led many Colorado jurisdictions to adopt their own rules. A statewide vacancy tax proposal was modified to exclude STRs and did not advance.

Source:

• www.postindependent.com/news/colorado-short-term-rental-regulation-new-organization-forms/
• www.summitdaily.com/news/short-term-rental-regulations-challenging-homeowners/

Contact Information for Local Authority in Charge of STRs

City of Craig, CO (primary local authority)

• City Manager: Peter Brixius — 970-826-3406 — [Email: citymanager@craig-co.gov]
• City Attorney: Heather Cannon — 970-826-3406 — [Email: cityattorney@craig-co.gov]
• Finance Director: Mindy Elliott — 970-826-3406 — [Email: finance@craig-co.gov]
• City Clerk: Katie Carmody — 970-826-3406 — [Email: cityclerk@craig-co.gov]
• Building Official: Marlin Eckhoff — 970-826-3406 — [Email: building@craig-co.gov]
• Admin Assistant (Building Department): Sierra Arellano — 970-826-3406 — [Email: admin@craig-co.gov]
• Mailing Address: 300 West 4th Street, Craig, CO 81625

Notes:

• Craig Daily Press, the local news neighbor, is often a useful source for updates: www.craigdailypress.com/

Moffat County

• No specific county STR contacts were identified in the provided content; verify county involvement directly.

State of Colorado (informational resources)

• Colorado Short-Term Rental Alliance (COSTRA): ColoradoSTRA.org/join (advocacy and education; membership and industry updates).

Links to Source Pages

• STR Workshop Minutes (City of Craig, Jan 28, 2025): cms3.revize.com/revize/craigco/1A.%20STR%20Workshop%20Minutes%201.28.25.pdf
• Post Independent: Colorado STR regulation and industry context: www.postindependent.com/news/colorado-short-term-rental-regulation-new-organization-forms/
• Summit Daily News: STR regulatory environment in Colorado resort communities: www.summitdaily.com/news/short-term-rental-regulations-challenging-homeowners/
• Craig Daily Press (News Neighbor): www.craigdailypress.com/

Practical Tips for Craig STR Investors

• Start with compliance readiness: plan for the $75 + $150 per bedroom fee and the initial inspection.
• Build your occupancy assumptions around the two-per-bedroom-plus-two cap when forecasting revenue.
• Confirm parking adequacy (hard-surface off-street) before listing; CD district operators should verify exemptions.
• Ensure your listings clearly display all applicable taxes; keep receipts and remittance records.
• Monitor the City’s public hearing calendar for ordinance adoption and final rule changes.
• If you’re adjacent to a resort area or anticipate high seasonal demand, consider longer minimum stays and off-peak pricing to optimize within occupancy and booking constraints.
• Join COSTRA for state-level advocacy and education: ColoradoSTRA.org/join

This guide reflects the best-available, source-backed information for Craig and Colorado as of the provided content. Final city rules will be established after the public hearing and Council adoption; always confirm the adopted ordinance and fee schedules before operating.