Board OKs changes for short-term rentals, seeks additional regulations
New procedures for managing short-term rentals are headed to City Council after the Planning Board recommended approval last week.
The board voted 5-1 on the zoning code amendment, with John Middleton voting in opposition.
The code amendment requires a short-term rental permit for each unit and creates a joint short-term rental permit and a business license. The change also includes the rental of a bedroom in a home for less than 30 days as a short-term rental.
The board then added language requiring owners to register with the Montana Department of Revenue, be subject to the state bed tax and define short-term rental owners as a person rather than a corporation.
The language is similar to Kalispell’s short-term rental code and was suggested by Rhonda Fitzgerald during public comment.
“The short-term rental phenomenon is a fast moving thing that’s had a lot of repercussions in communities all over the world, and especially in small towns in the Rocky Mountain West,” Fitzgerald said. “So I commend you for this and I think it will go a long way toward helping us with our affordable housing and also with the integrity of our neighborhoods.”
Right now, city regulations define a short term rental as any privately owned house, townhouse unit, condominium unit, apartment or other residence that is rented for less than 30 days. Short-term rentals are only allowed in the resort zoning districts and in the WB-2 and WB-3 commercial zones.
Adding a tax to the amendments makes the situation fairer for everyone, Fitzgerald said, using a 7 percent accommodation sales tax as an example.
“The reason I think this is essential is that 7 percent is a significant amount of money, and if you want to establish a level playing field with all the other people in the accommodation business in this community, it’s essential that these short term rentals who are competing should also be registered with the state and collect the 7 percent,” she said.
Middleton voted against the amendment because he was concerned with liability issues arising when rental owners are defined as individuals.
“Individuals that receive part of their ordinary income through this process really are exposing themselves to legal liabilities by not having a limited liability corporation,” he said. “I do think that’s something that ought to be considered in addition to this process, not being personally liable in the event of an accident.”
The city is also considering contracting with a short-term rental compliance company that would track such rentals in the city.
The company would use information provided by the city along with searches of short-term rental sites to determine which rentals are not complying with standards. A list of those in violation of regulations will be forwarded to the city to contact the owner.
About 50 short-term rental properties are currently registered with the city, though estimates put the total number of such rentals at about 300, City Manager Adam Hammatt has said.
Getting the short term rental market under control is going to have an effect on addressing other issues in Whitefish, City Councilor and Planning Board member Richard Hildner said, during the planning board meeting.
“I think it’s really important that this is one of those tools that we need to have in place if we’re going to deal with affordable housing, workforce housing, and, as Rhonda pointed out, to level the playing field,” he said.
The zoning amendment will go before City Council on Feb. 20.