Whitefish shores up vacation rental regulations, but delays medium-term rental rules

Whitefish is updating its short-term rental regulations with the intention of improving enforcement of the rules, but is delaying for a year the creation of “medium-term” rentals in its zoning code.

City Council last week voted to approve additional requirements for short-term rentals and increase the fine for illegal rentals, while choosing to postpone implementing medium-term rules for those rentals that fall in the 30 to 90-day category.

Councilor Andy Feury said the change in regulations is the best the city can do right now to crack down on illegal short-term rentals while trying to curb the trend of medium-term rentals in residential neighborhoods.

“I’m not naive enough to think that we won’t see this issue in court or before the state Legislature,” he said. “And it’s not going to change affordability, but I can’t say that it’s not affecting our neighborhoods.”

Councilor Steve Qunell initially made a motion to remove the language pertaining to medium rentals, but that failed on a 2-4 vote. Councilor Frank Sweeney was the only other supporter.

Qunell said he worried about language in the zoning saying that medium-term rentals are for tourists and remote workers.

“I get the problem,” he said. “But I don’t see how we can get away with this in the state’s eyes because this targets certain classes of people. The intention is right, but we have to go about this a different way.”

Council said the year delay in creating medium-term rentals is designed to let owners and property managers prepare for the change, but also adjust the language pertaining to medium-term rentals as necessary.

Changes create an additional designation of medium-term rentals, which are set as for stays between 30 and 90 days without the intent to rent to the same person or group for long-term housing. The mid-term rentals would be only allowed in the same zones as short-term rentals are permitted currently, in the resort zones and the WB-3 zone downtown.

By creating the medium-term rentals and only allowing them in specific zones, planning staff says that would create more tools to enforce illegal both short and medium-term rentals that may be operating in the areas set aside as for long-term residential housing.

A PROLIFERATION of vacation rentals in and around Whitefish have been pointed to as exacerbating overvisition impacts and potentially contributing to the shortage of workforce housing.

The city’s Sustainable Tourism Management Plan committee came to the city several months ago asking it to consider several measures to address the issue.

Lauren Oscilowski, who chairs the tourism committee, said the goal is to ensure that traditional residential neighborhoods are not turned into tourist areas to the detriment of long-term residents.

“There is a limited pool of workforce housing and this is designed to try to stop the hemorrhaging,” she said. “What we’re asking you for is to protect our neighborhoods.”

According to the committee, in the third quarter of 2021, there were 567 short-term vacation rental listings in Whitefish compared with the first quarter’s listing of 408. The numbers include 30-day rentals.

PUBLIC COMMENT came from both sides of the issue with some asking the city not to restrict medium-term rentals while others said it’s become a necessary step.

Erica Wirtala with the Northwest Montana Association of Realtors said medium-term rentals remain an important piece of the rental market.

“Mid-term rentals serve a unique set of individuals such as those that work at the hospital for a short period of time or even those that are in between houses when looking to build or waiting on a closing for a new house,” she said.

Suzy Schweikert with Five Star Rentals said restricting medium-term rentals would further add to the need for housing.

“Seasonal workers are often looking for rentals that are one to four months with rental flexibility,” she said. “This would take away homes that are needed.”

Tony Veseth told Council that the proliferation of medium-term rentals is harming neighborhoods by creating a constant turnover of neighbors.

“We need to respect the past and plan for the future,” he said. “We’re trying to preserve our community, yet still allow people to come here.”

Rhonda Fitzgerald told Council that hotel rooms haven’t increased in Whitefish since 2017, but what has increased is the number of vacation rentals.

“Tourism is a powerful force,” she said. “There’s a proverb that compares it to fire. Fire is good when you need to cook dinner or it can burn down your house — our town is on fire.”

John Sinrud, president of the Montana Landlords Association, cautioned Council saying the new regulations run afoul of state law which specifically calls out the ability for 30-day rentals.

CHANGES include creating a definition that recognizes month-to-month standard long-term rentals as being different from any type of vacation rental.

Also, to assist with enforcing short-term rental regulations, such rentals will be required in advertising to post their short-term rental registration number, hosting site property ID and property address.

Changes to the fines regarding illegal rentals are also included. Those found in violation could face a fine of $300 for the first violation and then $500 for each subsequent violation, per day that it occurs.

Whitefish’s management of short-term rentals began in 1982 when the city established specific “resort” zoning districts where tourist-related housing would be permitted. It has updated its regulations several times in the years since.