As its neighbors to the east are nearly a year into a contentious battle of how and where short-term rentals should be allowed to operate, the town of Hayden is having its own conversation on the matter.

Hayden will allow vacation home rentals — an entire home being rented out without a full-time resident living in it — in the town’s commercial district only, treating the units like businesses.

Those wanting to rent out a garage, basement or extra bedroom in their primary home — a standard short-term rental — will be able to do so in residential zones.

Mary Alice Page-Allen, Hayden planning and economic director, said the practice has always been the unofficial rule, but the town’s planning commission wanted to codify the matter in its community development code sooner rather than later.

“We have an opportunity with our update to the development code to reinforce the differentiation between a vacation home rental and a short-term rental,” Page-Allen said in a Thursday, Feb. 3, interview. “We treat what is typically considered a vacation home rental, a house or a second house that you don’t live in as a lodging property in Hayden.”

Page-Allen said the town does not have a short-term rental problem, as there are only a small handful of vacation home rentals, and all but one are located in the commercial zone district and are, therefore, in compliance with town rules.

A search of AirDna, a website that tracks short-term rental listings in various communities, shows the town has seven active listings on Airbnb and VRBO, the most common websites for finding a rental.

“There are likely some folks out there saying to themselves that we don’t have a problem, but because we had to make a differentiation in our code, it provided the opportunity for the conversation,” Page-Allen said. “We determined that it was appropriate to be proactive and just make sure that we were clear.”

Town Manager Mathew Mendisco said as Steamboat Springs continues to grow more expensive and Hayden keeps up its trend of a rapidly expanding population, the town is trying to strike a balance between welcoming visitors, maintaining affordable units for young families and keeping its character as a small and tight-knit community.

“How do you find balance accepting tourism and being welcoming while not compromising the integrity of your community?” Mendisco said. “The integrity of those neighborhoods is so important to us, and we are never going to lose sight of that.”

Mendisco said the Yampa Valley Regional Airport, which is Hayden’s largest current economic asset, has a large, if indirect, impact in the town, as most who fly into the airport are visiting Steamboat.

“Indirectly, tourism has a massive impact on Hayden,” Mendisco said.

As for whether tourism will ever be a larger part of the town’s core economy, Mendisco said he is unsure, but codifying the short-term rental rule is part of a larger conversation across Routt County: As Steamboat continues to get more popular and more expensive, what happens to its neighboring towns?

The town of Oak Creek recently voted to pass a cap on all short-term rentals in town, as town board members said they noticed an increase in such units and wanted to preserve the town’s affordability and character.

Meanwhile, Steamboat is nine months into a moratorium on applying for vacation home rentals, which is set to expire June 30. The city’s planning commission has also had several discussions on potential overlay zones where nightly rentals could be allowed, restricted or prohibited.