City of Woodland Park sued for ordinance that could eliminate more than 150 short-term rentals

WOODLAND PARK, Colo. (KRDO) - Looming regulations on short-term rentals in Woodland Park could force dozens of homeowners to sell their properties, which is why some have filed a lawsuit saying the regulations violate state and federal laws.

Woodland Park resident Mary Sekowski has owned a property near Memorial Park since 2019. She said she’s invested about $350,000 in it as a short-term rental (STR). However, she could soon lose the rental and about $48,000 a year in supplemental income.

“It takes away property rights of those homeowners who have invested a lot of money into their real estate investments,” Sekowski said.

On December 12, 2023, Woodland Park residents voted in a special election to pass an ordinance that would strictly regulate short-term rentals, with some claiming it essentially bans them by limiting who can operate short-term rentals and where they can be located.

There is a battle in many communities across the country over how to best regulate short-term rentals. Sekowski said in Woodland Park there is concern short-term rentals affect the character of neighborhoods.

The ordinance only allows primary residence short-term rentals, where the owner lives at the property, to be located in residential zones. Rentals where the owner lives off-property, which is more common, are only allowed in commercial zones.

“A house can no longer be operating in a residential zone as a short-term rental, so for any owner, they are basically being given a notice of eviction that they have to get out of a residential zone and they have 12 months to do it,” said attorney David Illingworth.

In response, the Teller County Short-Term Rental Alliance, a group made up of short-term rental owners, filed a lawsuit against the city, stating the new ordinance violated state and federal laws.

“The end result is that not only will new property owners immediately be restricted in how they can use their properties for STRs, any current lawful STRs will be completely eliminated by the end of the year,” the lawsuit said.

Illingworth, who filed the lawsuit, said the short-term rental ban violates federal law by not allowing a property owner to do what they want with their own property. He also said it goes against state law, as local governments can’t “eliminate lawful businesses through zoning.”

According to the City of Woodland Park, there are more than 150 short-term rentals within city limits. Most of those properties will be affected by these new regulations since they aren’t primary residences and are located in residential zones. This leaves owners, like Sekowski, with a difficult decision.

“What do we do with the property at this point? Do we sell it? Do we keep it and turn it into a long-term rental?” Sekowski said.

She claimed this ban would have a larger financial impact on the City of Woodland Park. She said there aren’t many commercial places to stay, like motels and hotels, so many visitors rely on short-term rentals. If this ban forces owners to sell their rental properties, there could be less space for visitors.

“It's going to have a negative impact financially where people aren't going to be able to stay here,” Sekowski said. “So they're going to continue to drive through to other places that are more friendly.”

KRDO13 Investigates reached out to the City of Woodland Park multiple times about the short-term rental ordinance and the lawsuit against it. However, we never heard back.

Although these regulations are currently in effect, the so-called ban wouldn’t start until Dec. 31, 2024, when the city said it won’t renew short-term rental licenses for properties that don’t follow these new regulations. Owners hope this lawsuit forces the city to revoke the ordinance before the end of the year.

“(Visitors) want to be settled in and enjoy this community for what it is, which is a hospitable, beautiful, welcoming community that's being choked out by this ordinance.”