Council asks staff to study applying lodging tax to short-term rentals and potential revenue for housing

A councilmember asked staff to prepare a preliminary report estimating potential revenue if Thornton extended its lodging tax to include short-term rentals and to outline steps required to pursue a voter-approved change or municipal action.

Background: The councilmember said a vendor-run snapshot of short-term rental listings showed more than 200 properties in Thornton. The city currently levies a 7% lodging tax applied to hotels but not to short-term-rental platforms; several other Colorado municipalities have extended lodging or lodging-like taxes to short-term rentals and used proceeds for affordable housing.

Requested analysis and next steps: The council directed staff (city attorney, finance, housing and relevant departments) to prepare a preliminary analysis estimating revenue at a sample 9% tax rate on short-term rentals, outline the legal and procedural steps to place such a measure on a ballot (if required), and identify comparable approaches other municipalities have used. Staff said they would collaborate internally and provide draft information for council review.

Why it matters: If applied, a lodging tax on short-term rentals could create a new revenue stream that councilmembers suggested might be used for affordable housing or homelessness initiatives; councilmembers noted timing considerations if a ballot measure were desired for an upcoming election year.

Ending: Council expressed consensus to request the initial staff analysis; staff committed to coordinating across departments and returning preliminary findings to the council for follow-up.