Key Takeaways

  • A small Colorado mountain town is taking another run at short-term rental regulations after voters repealed its first ordinance
  • The rejected rules would have capped the town at 30 short-term rental licenses
  • A new committee has until the end of 2026 to recommend a replacement

A small Colorado mountain town is reopening its short-term rental debate more than a year after voters overwhelmingly rejected its first attempt at regulation.

Paonia, a town of roughly 1,500 residents about 70 miles southeast of Grand Junction, has agreed to consider a new STR ordinance being developed by a special committee, according to the Montrose Daily Press.

The move gives the proposal a path back to town trustees after an earlier draft was temporarily set aside.

It also extends a regulatory fight that has become increasingly familiar in small vacation destinations across the country, where officials are weighing calls for greater oversight against concerns about property rights and unnecessary restrictions.

Mayor Sheree Fischer, who has been serving on the committee, has said the regulation battle gas been”very ‘bang-your-head-against-the-wall,’ to be honest,” according to the Delta County Independent.

No new rules have been approved, and the town is still months away from receiving a final recommendation. But trustees have agreed to formally review the committee’s work once it is complete.

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Voters rejected the town’s first STR ordinance

Paonia has already tried once to place tighter controls on its short-term rental market.

According to the 2024 U.S. census, 943 housing units were located in the town of Paonia, and there were only 27 or less STRs.

Town trustees approved an ordinance in November 2024 that created a licensing system and capped the number of STR permits at 30.

Residents responded with a petition drive that forced the ordinance onto the ballot. In April 2025, voters repealed the rules by a 381-160 margin, sending town officials back to the drawing board.

The result did not end the broader debate over whether Paonia needs a registration program, operating standards or a clearer system for handling complaints.

Instead, the town formed a five-member ad hoc committee made up of two trustees, two appointed residents and the town administrator. The group has been meeting twice a month to explore what a replacement ordinance could look like.

Residents question whether new restrictions are needed

The committee is considering issues such as registration, permitting, safety requirements and enforcement, while trustees have reserved 16 policy questions for the town board to decide.

Residents opposed to additional restrictions have argued that officials have not documented enough STR-related problems to justify another broad ordinance.

Some have pointed to the town’s limited record of complaints and said existing nuisance, parking and safety laws should be used before Paonia creates a new regulatory program.

Supporters of basic oversight say registration would help the town determine how many STRs are operating and give officials a reliable way to contact owners when problems occur.

The dispute reflects a larger question playing out in communities nationwide: whether towns should regulate short-term rentals before major problems emerge or wait until complaints show that new rules are necessary.

Related: Wisconsin city debates its short-term rental stay minimum

Committee has until the end of 2026

The committee must submit its final recommendations to trustees by the end of 2026, giving members several more months to work through the town’s most divisive issues.

A resident group called Common Ground, which helped organize opposition to the previous ordinance, has also submitted an alternative proposal.

The group’s plan favors a simpler registration system and complaint-based enforcement rather than a fixed cap on the number of STR licenses available.

Trustees have not announced when they will hold a public hearing or vote on the committee’s finished proposal. Any ordinance would still need to move through Paonia’s formal public approval process.

For now, the town has agreed to give STR regulations another look. Whether the next proposal can survive the same voter opposition that killed the first one remains an open question.

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