Understanding the Denver Zoning Code: A Guide for Hosts and Investors
Behind every profitable rental in any city in the United States of America lies an operating system in the form of a zoning code, and Denver is no different. Denver Zoning Codes determine what you can rent, for how long, and under which license, and they affect your underwriting just as much as interest rates or HOA rules.
This guide breaks the DZC into decisions hosts actually make. Things like STR versus 30+ day licensing, how zone labels affect feasible unit types, how the ADU changes improve feasibility, what the 2025 parking reform means for small projects, and where the numbers land in real scenarios.
Looking to see how your property’s zoning rules dictate what you can do with rentals?
How Denver’s Zoning Code works
In 2010, Denver decided to modernize its zoning code to balance conservation and growth, while reflecting “neighborhood contexts” across the city. This encompasses everything from single-block units to mixed-use downtown districts featuring some of the most high-end properties on the market.
Some properties still follow older rules, but most addresses you’ll consider today fall under the DZC.
📌 How to read the zone labels:
Example: E-SU-DX = Urban Edge context / Single-Unit house / a specific lot/height designation. Once you can decode labels like these, you’ll know in seconds what’s plausible on a property: single-family only, small multiplex, or mixed-use with units over retail.
What do zones mean for operating a rental in Denver?
| Context | Typical housing stock | Demand signals | Host implications |
|---|---|---|---|
| D- (Downtown) | High-rise residential, hotels, mixed commercial | Retail/office proximity, medical, and corporate stays | Hotel/lodging uses cluster here; STR still limited to your primary residence. Strong case for 30+ day furnished units where allowed. |
| C- (Urban Center) | Mixed-use corridors, upper-floor housing | Neighborhood amenities, hospital access, and campuses | Good for MTRs; verify use tables and HOA minimum lease terms before modeling. |
| G-/U- (General Urban/Urban) | Rowhouses, small apartments, ADU-friendly lots | Primary-residence STRs work; the strongest fit is 30+ day furnished rentals and ADUs. | Primary-residence STRs work; strongest fit is 30+ day furnished rentals and ADUs. |
| E-/S- (Urban Edge/Suburban) | Single-family, larger lots, garages/alleys | Family visits, relocations, project-based stays | ADUs pencil well; plan for utility separations and access/parking layout early. |
Short-term vs. long-term licensing and zoning
Denver defines different rental types almost as different types of businesses completely, and the licensing process reflects that. In Denver, stays under 30 nights are short-term rentals (STRs) and require an STR business license, but only when the dwelling is your primary residence. A second home or pure investment unit does not qualify as a legal STR and is technically not possible with current Denver zoning laws. That being said, there are plenty of regulatory loopholes that allow for renting STRs in Denver that can be found with a bit of research.
Stays of 30+ days are not considered STRs. Therefore, those require a Residential Rental Property license, which includes an inspection and a four-year license cycle. This license applies to condos, single-family homes, and ADUs used for 30+ day stays.
| Stay length | What Denver calls it | License required | Details |
|---|---|---|---|
| < 30 nights | Short-term rental (STR) | STR business license | Must be your primary residence (ADUs qualify); license number must appear on listings |
| 30+ nights | Residential rental | Residential Rental Property license | Inspection and four-year renewal; ADUs, condos, SFHs all qualify |
Practical takeaways
- Live-in hosts can tap STR demand around event weekends and peak seasons.
- Non-occupant investors should plan around 30+ day stays to remain compliant.
Taxes on STR stays (and who collects them)
For stays under 30 nights, guests pay a combined stack of lodger’s and sales taxes that appear at checkout on major platforms. Most platforms collect and remit these directly, but you still need to follow city registration steps and keep your records clean.
Typical combined burden for stays under 50 rooms: 14.75%
Hotels with 50+ rooms: 15.75% (includes a special tourism district charge)
Practical takeaways
- Live-in hosts can tap STR demand around event weekends and peak seasons.
- Non-occupant investors should plan around 30+ day stays to remain compliant.
- For furnished units near hospitals and campuses, MTR demand can be steady and easier to manage.
Example: Three-night STR stay
- Room rate: $220/night × 3 = $660
- Tax at 14.75% = $97.35
- The guest pays $757.35 before platform fees and cleaning
This line is powerful in pricing strategy: small adjustments to weekday rates can raise occupancy and improve effective RevPAR without shocking the tax line seen by guests.
ADUs and the 2023 reforms: Small homes, big impact!
Denver has a shortage of inventory, and if you’ve followed the market for the last few years, that’s obvious to everyone. In 2023, Denver updated ADU rules to make accessory dwellings easier to design and build while fitting neighborhood form. The phrase “Denver Double” was coined, which defined the practice of building a big ADU in a backyard. This was done with the idea of increasing housing supply in a market that was stretched to the max inventory-wise.
In practice, more ADU lots than originally planned qualify for the reforms, and certain height/plane rules scale better with lot size and context. For hosts, ADUs are compelling because they create a dedicated, private rental unit with multiple strategies:
- STR only if the property is your primary residence (An ADU is located on the primary residence)
- 30+ day rentals (MTR/LTR) under the Residential Rental Property license for simpler compliance and steady income.
Why ADUs shine for visitor-oriented investing
- They unlock additional housing in popular neighborhoods without changing the main house.
- Guests love the privacy and “back-house” vibe.
- On a furnished 30+ day model, ADUs can pencil with realistic paybacks (see scenarios below).
What’s allowed where? A map for visitors and hosts
| Context | Typical feel | Visitor takeaway | Host takeaway |
|---|---|---|---|
| D- (Downtown) | Towers, arenas, convention activity | Hotel core; walkable to venues and nightlife | “Lodging” uses concentrate here; STR only if it’s your primary residence |
| C- (Urban Center) | Mixed-use corridors (Cherry Creek/Broadway) | Shopping/dining with upper-floor stays | MX/MU districts can enable housing or lodging over retail; verify the use table |
| G-/U- (General Urban/Urban) | Rowhouses, small apartments, corner shops | Neighborhood vibe close to hotspots | Great for 30+ day furnished stays; STR only as a primary residence |
| E-/S- (Urban Edge/Suburban) | Quieter blocks, garages, bigger lots | Park and trail access | ADUs feasible after 2023 reforms; check setbacks, height planes, and alley access |
Real host scenarios at a glance
Ok, so what exactly do these zoning codes mean, and how do they affect investors and landlords? We’ve distilled each scenario to the numbers that matter: gross income, key costs, and annual net income, which can give you a side-by-side comparison of how zoning codes and Denver trickle down to numbers in real life.
Scenario 1: Primary-residence STR (Highlands)
A live-in host in the Highlands rents a private garden-level suite on weekends and during peak travel weeks. Because it’s the owner’s primary residence, they hold an STR license and display the license number on every listing. Major platforms handle the tax line at checkout, keeping compliance straightforward. The playbook here is to experiment with weekday pricing and short promos to nudge occupancy; gentle rate moves that fill gaps often outperform big headline increases.
Scenario 2: Mid-term rental near hospitals (30-day stays)
A one-bed condo near major hospitals rotates traveling nurses and medical staff on multi-week contracts. It’s a 30-plus-day model, so the owner uses the Residential Rental Property license with periodic inspections, avoiding the primary-residence requirement that applies to STRs. Demand is steady, turnovers are predictable, and operations are lighter than nightly hosting. The only wildcards tend to be HOA lease minimums and parking availability, both of which are easy to underwrite up front.
Scenario 3: Add an ADU to a primary residence for a steady 30+ day income
On a general urban lot with alley access, the owner builds a detached ADU and rents it for 30 days or longer. This keeps licensing simple, trims turnover, and gives guests a private, self-contained space with its own entry.
Scenario 4: Cherry Creek condo investor (MRT vs. STR)
In Cherry Creek North, a condo association bans nightly STRs but allows leases of a month or more, steering the owner toward a furnished mid-term strategy. The neighborhood’s corporate and medical demand supports longer stays, while building amenities justify a premium over standard unfurnished rentals. Ongoing association dues become the main operating consideration, but they’re offset by reduced turnover and cleaner scheduling.
Compliance checklist for rental landlords in Denver
Stay compliant, folks! A clean record that sparkles in the sunlight is something that sticks with you and can be a great asset in the future, particularly when it comes to lending.
Use this quick reference to stay compliant in Denver. Pick the category that matches your plan (nightly STR, 30+ day rental, building/using an ADU, or a project affected by parking rules), then take a look at our advice and tips so you can navigate the market.
| Category | What you need to do | Notes / pro tips |
|---|---|---|
| Short-term rental (under 30 nights) | Prove primary residence status. Display your STR license number on every listing and ad. Register for lodger’s tax and maintain records even if platforms remit. Model a 14.75% guest tax line in pricing and forecasts. | Platforms typically show and collect the tax at checkout. Weekday pricing and minimum-stay tweaks can lift occupancy without compliance risk. |
| Mid-term / long-term rental (30+ days) | Obtain a Residential Rental Property license. Complete inspection and plan for four-year renewals. Keep a clean lease packet and move-in checklist. Align house rules with occupancy and group-living limits. | Great fit for travel-worker demand and buildings with lease-minimum HOAs. Lower turnover than nightly STRs simplifies operations. |
| ADUs (30+ day or primary-residence STR) | Confirm ADU eligibility and design for your exact zone and lot. Choose model: primary-residence STR or 30+ day furnished rental. Budget for utility separations, site work, and inspections. | Alley access and compact footprints control cost and downtime. Durable finishes reduce maintenance between stays. |
| Parking (new builds / changes of use) | Account for citywide removal of minimums for qualifying projects. Check for maximums near rail and transit corridors. Coordinate early with design and code consultants. | Reallocate former parking costs into guest experience and life-safety upgrades. Document assumptions for lenders and investors. |
FAQ
Can I buy a condo and run it as a full-time STR?
Only if that condo is your primary residence and you maintain an STR license. Most condo associations have lease minimums that effectively block nightly rentals. If your goal is a second home or investment unit, plan around 30+ day stays and the Residential Rental Property license.
What changed with parking, and why does it matter?
Denver removed minimum parking requirements in zoning for new builds and qualifying changes of use. Adaptive reuse near transit benefits most: capital once trapped in structured parking can be reallocated to rooms, safety, or guest amenities. You still must satisfy building codes and any applicable caps.