Can Short-Term Rentals and Affordability Coexist?

Can Short-Term Rentals and Mountain Towns Coexist?

Short-term rentals are one of the most emotionally charged topics in Colorado mountain towns , but the conversation is rarely as simple as "for" or "against."

On this episode of Real Estate in the Rockies, Ashley Kappel and Jessica Chariton sit down with Lisa Runkel and Summer Anderson, founders of Rainbow Rentals, a Salida-based short-term rental management company built around a "Live Like a Local" philosophy, to talk through what responsible STR management actually looks like on the ground , permits, fees, policy whiplash, and all.

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Quick Answer: Can Short-Term Rentals and Affordability Coexist in Mountain Towns?

According to Rainbow Rentals' founders, it depends on whether policy is proactive or reactive. Salida's short-term rental rules have shifted repeatedly over the past five to six years , permit waitlists, residency requirements, and fee structures have all changed in response to pressure rather than as part of a long-term plan. As Lisa Runkel puts it, the real question communities need to answer is "what do we want this to look like in 20 years?" , and set policy toward that vision instead of reacting project by project.

How Rainbow Rentals Got Started

Lisa Runkel had bought a Salida condo in 2021 and applied for a short-term rental permit, only to be placed on a waitlist for four years. Summer Anderson, who had managed short-term rentals on the Front Range, offered to help manage it once the permit came through. What started as an after-yoga conversation over margaritas turned into a full property management company, launched roughly a year before this episode aired, focused specifically on mountain town hospitality done well.

Salida's Shifting Short-Term Rental Rules

One of the most concrete parts of the conversation is just how much Salida's STR policy has changed in a short window. At one point, the city ran two separate waitlists , one for Chaffee County residents and one for non-residents , with non-resident applicants required to wait until the entire resident list had been processed first. Non-residents also had the option to offer their property as workforce housing for three cumulative years (not necessarily consecutive) to move up the list, though Runkel and Anderson noted that option effectively closed before some owners could take advantage of it.

Currently, a Salida short-term rental permit runs about $1,000 upfront, plus a room tax of roughly $15 per night per room , a fee structure Runkel says is notably higher than resort towns with much higher nightly rates, which puts Salida properties at a competitive disadvantage on cost even though the town doesn't command Telluride- or Aspen-level pricing.

Why the Fees Hit Different Owners Differently

One structural issue Runkel flagged: the room tax applies to every bedroom in a home, even if an owner only wants to rent out a single room. A resident renting one bedroom in a four-bedroom house pays room tax as if all four bedrooms were available to rent , a policy detail that, in her view, discourages exactly the kind of small-scale, owner-occupied rental that could help residents afford to stay in their homes.

Her broader point: current policy tends to restrict outsiders rather than proactively support residents who want creative ways to keep their properties. She specifically suggested reduced fees, license costs, or room tax structures for full-time residents who want to rent out a portion of their own home.

Why Most STR Owners Aren't Who People Assume

A common assumption , that anyone running a short-term rental must be getting rich off it , doesn't hold up in Salida, according to Runkel and Anderson. Because nightly rates are lower than in major resort towns, most of their owners are using STR income to hold onto second homes purchased years ago, not to generate major profit. In one example they shared, a family's own income projections showed that short-term renting their home wouldn't even cover their mortgage and expenses at current interest rates , a case Rainbow Rentals was upfront about rather than inflating numbers to win the business.

The COVID-Era Price Spike Still Shapes the Conversation

Both founders pointed to the pandemic-era wave of buyers that pushed Salida property values up an estimated 50% in a short window , a shift that made the town comparatively unaffordable relative to some other Colorado cities almost overnight. That spike is part of what's driving today's more restrictive, reactive policy environment, even though, as Runkel noted, not all of that price increase was necessarily driven by short-term rental activity specifically.

Occupancy Data: Salida vs. County Properties

Rainbow Rentals has noticed a measurable occupancy gap: Chaffee County properties (outside Salida's stricter fee structure) are staying booked at a higher rate than comparable properties inside city limits. Guests checking out of Salida properties are often paying several hundred dollars more for a comparable stay, since higher city fees typically get passed through to the guest.

What "Live Like a Local" Actually Means

Rainbow Rentals' hospitality model goes beyond providing a place to sleep. Their "Live Like a Local" approach actively directs guests toward local restaurants, shops, and small businesses , treating tourism dollars as something that should circulate through the community rather than stay contained inside a rental property.

The Housing Needs Assessment: Why It Matters Right Now

One concrete action item from the episode: Chaffee County conducts a comprehensive Housing Needs Assessment roughly every 10 years, which becomes the foundation for local housing policy for the following decade. Runkel and Anderson specifically urged listeners to complete the assessment while it's open, since it directly shapes how the county approaches affordability, workforce housing, and STR policy going forward.

Frequently Asked Questions

How much does a short-term rental permit cost in Salida, Colorado? Approximately $1,000 upfront, plus a room tax of roughly $15 per night per bedroom, according to Rainbow Rentals' founders.

Did Salida used to require residency for short-term rental permits? Yes. The city previously operated separate resident and non-resident waitlists, with non-residents required to wait until the entire resident list was processed, or offer their property as workforce housing for three cumulative years to move up.

Are most short-term rental owners in Salida making significant profit? According to Rainbow Rentals, no , most owners are using STR income primarily to help retain second homes they purchased years ago, not as a major profit center, since Salida's nightly rates are lower than major resort towns despite comparable fees.

What is the Chaffee County Housing Needs Assessment? A comprehensive housing study conducted roughly every 10 years that forms the basis for the county's housing and affordability policy for the following decade.

🎧 Hear the full conversation with Lisa Runkel and Summer Anderson on this episode of Real Estate in the Rockies , the real story behind managing short-term rentals responsibly in a small mountain town.

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Learn more about Rainbow Rentals: rainbowrental.net | @staywithrainbowrentals

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