A town's creative way for homeowners to tap into the short-term rental market could be a blueprint for others

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Boulder is finally embracing short-term rentals … on a short-term basis.

The city is lifting its long-standing ban on most Airbnbs, allowing permanent residents to rent out their homes during four weeks spanning January and February. It's a potential model for other cities looking to dabble with the short-term rental market again.

Boulder's shift is due to the arrival of The Sundance Film Festival. The college town is replacing Park City as the host of the iconic independent film festival for the next decade. But with roughly 100,000 expected visitors and only 3,000 hotel rooms, the local government needed to get creative.

Now residents are hoping to lure film enthusiasts into their homes, erasing some mortgage payments in the process.

BI's James Rodriguez has the full rundown on the Boulder community's crash course on the short-term rental business.

Some residents are already having an Instagram-vs-reality moment when it comes to pricing their abodes. They're eyeing five-figure stays despite their homes not necessarily fitting the bill.

"I think people need to get over that idea that they're going to just make their retirement on the first year of Sundance coming to Boulder," Juli Kovats, a longtime real estate agent there, told James

Boulder's success would show how a city can allow residents to benefit from Airbnb without swallowing up housing supply.

Short-term rentals have been a hotly debated topic for years, especially as the housing market has worsened. Many cities have banned or enacted strict regulations to prevent investment properties from sitting dormant while hopeful homebuyers struggle with limited inventory.

The market hasn't been a cakewalk for investors either. Vacation homes, once viewed as almost a fool-proof play in real estate, have proven to be a nightmare to sell, James previously reported.

Rentals based around specific events come with their own issues. Owning a rental property near a big stadium is great when the team is crushing it. The appeal drops if it's a losing team that struggles to fill the stadium, making it harder for you to book guests.

Boulder's approach could be a happy medium. Permanent residents have the chance to cash in on specific events without turning the community into a bunch of rental properties that risk sitting empty most of the time