A buyer walks a listing on one of Cherry Hills Village's larger parcels and spots the phrase every agent loves to underline: guest house. Maybe it is a converted carriage house behind the main residence, maybe a freestanding casita with its own kitchen. The buyer's mental math kicks in immediately. A place for aging parents. A long-term rental to offset the mortgage. An Airbnb for a busy weekend in town.
Most of that math is wrong, and the reason has nothing to do with taste or tradition. It is written into the municipal code, and the city has spent the better part of fifteen years making sure nobody mistakes a guest house for a rental unit.
The Word "Guest House" Is Doing a Lot of Legal Work
Cherry Hills Village's zoning code does not treat a guest house as a smaller, cheaper version of a second home. It treats it as an extension of the family living in the main house. The code allows guest houses only in the R-1 and R-2 zone districts, and it restricts occupancy to family members of the people living in the principal dwelling, or their non-paying guests. Not tenants. Not long-term renters. Not a property manager collecting rent on behalf of an out-of-state owner.
That last distinction matters more than most buyers realize. The occupancy restriction is not a short-term-rental rule. It is a use restriction that applies regardless of lease length. A six-month lease to an unrelated paying tenant violates the same standard as a two-night Airbnb booking, because the code does not define the guest house by how long someone stays. It defines it by whether money changes hands at all. You can find the actual language in the guest house standards the city publishes for permit applicants, and it is worth reading before you fall in love with the idea of rental income from a secondary structure.
The Size Caps Are Doing Work Too
Even if you have no interest in renting the thing out, the code limits how much house a guest house can actually be. An attached guest house cannot exceed 900 square feet or 25 percent of the principal building's floor area, whichever is smaller. A detached guest house is capped as a percentage of the lot itself.
| Zone District | Attached Guest House Cap | Detached Guest House Lot Coverage | Who Can Live There |
|---|---|---|---|
| R-1 | 900 sq ft or 25% of main house (whichever is less) | Up to 3% of lot area | Family members or non-paying guests only |
| R-2 | 900 sq ft or 25% of main house (whichever is less) | Up to 4% of lot area | Family members or non-paying guests only |
Lots of five acres or more get some additional latitude for accessory structures under the code, which is one reason the largest estates in the Village can support a guest house, a barn, and a pool house without tripping the same limits that would apply on a one-acre parcel. But more square footage allowance does not change who is allowed to live in any of it. The occupancy rule travels with the structure no matter how big the lot gets.
Why the City Keeps Revisiting This
If the occupancy restriction sounds like something nobody enforces, the ordinance history says otherwise. The city first banned short-term rentals of single-family homes under 90 consecutive days back in 2012. A decade later, Ordinance 3, Series 2022 tightened that definition to 30 consecutive days and, this is the part that catches people off guard, explicitly extended the ban to accessory dwelling units and guest houses by name. It also classified using a home for a paid party or wedding as a commercial use, which is flatly prohibited in the city's residential districts.
This spring, the City Council was still working the same problem. According to reporting from the Cherry Creek News, council members discussed reinforcing the existing rental restrictions in May 2026, and city agenda documents from earlier that year show ongoing oversight of leasing practices even on city-owned properties, including the Farm House and Hopkins House. If the city is scrutinizing its own leases on historic structures it owns outright, it is not going to look the other way on a private guest house down the street. The reporting also noted that Prairie Village, Kansas adopted a similar 30-day minimum stay rule in November 2025, suggesting this is not an isolated Cherry Hills Village quirk but part of a broader move among wealthy, low-density suburbs to keep transient rentals out of estate neighborhoods.
What This Means When You're Comparing Two Listings
None of this makes a guest house a bad feature. It makes it a different feature than the one many buyers assume they are getting. In cities where accessory dwelling units are treated as flexible rental inventory, a secondary structure adds to a property's income potential. In Cherry Hills Village, a guest house adds to a property's living capacity for the family that owns it and nothing else. It is worth more to a buyer who wants space for a parent, an adult child, or full-time household staff than to a buyer running numbers on rental yield.
That distinction should show up in how you evaluate a listing, not after you close on it. If a guest house is part of what is pulling you toward a particular property, ask what the current owner has actually used it for and pull the zoning file before you assume the square footage translates into cash flow. The code caps what the structure can be. The ordinance history shows the city has no plans to loosen who can live in it.
A Short FAQ
Can I rent the guest house on a long-term lease if it's not short-term? No. The occupancy restriction limits guest houses to family members and non-paying guests regardless of lease length. This is separate from the short-term rental ordinance.
Does a five-acre-plus lot change the rental restriction? No. Larger lots get more flexibility on accessory structure size and number, but the occupancy rule for guest houses applies the same way across lot sizes.
Can domestic staff live in the guest house? Yes. The code specifically allows guest houses to be occupied by domestic servants of the family in the principal dwelling, in addition to family members and non-paying guests.
What happens if I want to convert a guest house into a rentable unit? That would require a change the city is actively moving away from, not toward, based on the 2022 ordinance and the council's continued attention to leasing enforcement in 2026.
If you're weighing a Cherry Hills Village listing because of what sits behind the main house, it is worth understanding what that structure can legally be before it factors into your offer. Niki Collier can walk you through the zoning file on a specific property and help you separate what a guest house is worth to live in from what it might have looked like on paper as a rental.
