Whitefish sticks with current short-term rental regulations

Whitefish has decided for now that no further regulations are necessary for vacation-style rentals in the city.

There are about 160 short-term rentals permitted in the city limits, and since last year the City of Whitefish has taken steps to enforce regulations around the rentals making sure they are licensed with the city, collecting taxes as required, and are operating in the correct zones.

City Council recently held work sessions pertaining to short-term rentals after asking staff to bring forward information regarding such rentals to determine if further regulation might be needed. Following those meetings, Council opted not have city staff pursue any further action at this time regarding vacation rentals.

“I think we got ahead of the curve early on,” Councilor Richard Hildner said. “I think one of the big worries and complaints is generated by short-term rentals in the residential neighborhoods, but I think we’ve come to this understanding over time that short-term rentals are acceptable in certain places in the city.”

Short-term rentals are only allowed in WB-3 general business district downtown and in the resort residential zoning districts. They are prohibited in all other zones, and rental of an entire house or rental of a bedroom in a dwelling is also prohibited.

“Whitefish has regulated and restricted short-term rentals since the 1980s and is more stringent than most communities,” said Planning Director Dave Taylor. “Most other communities were not as visionary and are just now trying to regulate short-term rentals in their traditional residential zoning districts.”

Last year the city prohibited short-term rentals in WB-2 district secondary district which is generally along the U.S. Highway 93 corridor south of downtown.

Councilor Katie Williams said the city has done what it can for now to keep short-term rentals in check.

“We tried to attack the problem last year and it seems to be working,” Williams said. “I don’t think there’s anything else we can implement in terms of restricting short-term rentals.”

Whitefish in 2018 issued permits for 103 short-term rentals compared to 25 in 2017 and 15 in 2016. However, the increased permit activity is attributed to the city’s efforts to bring such vacation rentals into compliance with regulations. Last year the city began using STR Helper, a software company that tracks vacation rentals.

City Manager Adam Hammatt said weekly scans of short-term rental sites is completed by STR Helper and then referred to the city for review. He noted that assistance from the company has been extremely helpful for the city to identify short-term rentals that may not be operating legally.

During comment, Rhonda Fitzgerald, who owns the Garden Wall Inn, said while regulations are working, short-term rentals still need to be recognized for what they are — a hotel room.

“All the actions taken last year have worked,” she said. “They are being licensed and are collecting taxes.”

However, she noted, continued concerns about a lack of parking for vacation rentals. City zoning code requires parking be based on the number of units not on the number of bedrooms.

“Every bedroom is a car just like a hotel room,” she said. “We need to make sure in the commercial and resort residential areas that there is adequate parking.”

Dan Cutforth, owner of the Stumptown Inn, said he has concerns about older homes in the downtown area being torn down and converted to short-term rentals. He also agreed that a lack of parking being provided along with vacation rentals is an issue.

In the Whitefish Strategic Housing Plan one of the strategies discussed for creating affordable workforce housing is to convert short-term rentals back into long-term housing.

An article in the Montana Business Quarterly earlier this year discussed a study conducted by the Institute for Tourism and Recreation Research at the University of Montana, noting that short-term rentals are “flooding” communities around the state. The article says that while short-term rentals can have financial benefit for owners, they have disrupted traditional rental and home sales markets.

“On the downside, short-term rentals create a number of issues for communities, including increased home prices, a reduction in workforce housing and affordable housing stock and changes in a neighborhood’s complexion,” the article said.