Long term solutions for short term rentals

Some cities and towns in tourist destinations like Wyoming and Montana have been capping, or are looking at capping, the number of allowable short-term rentals as a way to increase the number of long-term rentals for workforce housing.

Some of these cities say requiring a permit through the ordinance gives the fire department authority to make safety inspections. This ensures properties are safe to occupy with working smoke alarms and other safety protections for the guests.

The ordinance permit process gives towns a way to track the number of short-term rentals, they say.

Realtors who manage long-term rentals say restricting the number of short-term rentals leaves more properties available either for long-term rentals or for purchase as an owner-occupied home.

Todd Stowell, planner for the city of Cody, Wyoming, said the Cody City Council originally created its short-term rental ordinance as a way to require safety inspections by the fire department. He said the fire department found that making safety inspections was needed.

“Our experience has been that more than 90 percent of [the short-term rentals] need upgrades [such as] smoke detectors [and] adequate handrails,” he said.

The city assumed if it needed more long-term housing, the “market will adjust.”

“But years have gone by and that argument has not held up,” Stowell said, referring to the non-vacation rental housing shortage in Cody.

The ordinance went into effect in 2007, but the city only started enforcing it about six years ago, he said. Because the market has not “adjusted” and there is a housing shortage, the council has begun to look at whether or not to impose some sort of maximum amount for short-term rentals, he said.

“Realtors say the number of short-term rentals does affect the availability of housing for our workforce,” Stowell said.

The ordinance is also a way for the city to know how many short-term rentals it has, so if an issue arises, the town can address it, he said.

Cody has a population of 10,224, according to the 2022 U.S. Census. Cody has about 150 short-term rentals, he said.

Saratoga has 147 short-term rentals, according to Airdna.com. The population of Saratoga is 1,747 as of the 2022 U.S. Census data.

Pamela Sandoval, owner and broker for Platinum Real Estate Services, which serves Albany and Carbon County, said if Saratoga had fewer short-term rentals, “there would be more long-term rentals.”

“The Airbnb market in Saratoga is saturated,” Sandoval said. The profitability of short-term rentals has not been what it was during COVID. “You might see a shift back to long-term rentals.”

Wendy Barkhurst, owner and broker of White Stone Realty which serves Carbon County, said it is only “logical” that if there were fewer short-term rentals in Saratoga, there would be more long-term rentals and/or homes for sale.

Barkhurst said she knows this because in the past two-to-three years, she has had multiple long-term rentals which the owners sold to buyers to turn into short-term rentals.

“The tenants of the [formerly] long-term rentals have had to find other places to go,” she said. “Housing is tight in Saratoga, regardless of whether [they are] for-sale or rental properties. Limiting the number of short-term rentals would have an effect, I am not saying that is good or bad. That could be a possible result if they were to cap short-term rentals”

Stowell said Cody is looking at possibly adopting an ordinance like the one in Red Lodge, Montana. Red Lodge adopted a short-term rental ordinance in August 2023, as stated on the city website. The ordinance caps the number of short-term rentals at 20 percent of the housing stock or dwelling units.

Ordinance 963 reads, “In the event that the limit is reached, a waiting list shall be established to facilitate new permits when existing permits expire and are not renewed.”

The city also included a good neighbor policy in its ordinance.

“The City shall adopt a written Good Neighbor Policy summarizing local laws, regulations, and community norms pertinent for visitors,” as stated in the ordinance.

Red Lodge, Montana Mayor Dave Westwood said the vote was tight to enact the ordinance.

“It was a divisive issue,” he said.

The population of Red Lodge is 2,510 as of the 2022 U.S. Census.

“A lot of people don’t want Red Lodge to be a resort town,” Westwood said. They want it to remain their “own private spot.”

Prior to enacting the ordinance, the city looked at studies which concluded if a short-term rental stopped operating as such, it would not be turned into a long-term rental for the workforce because of the cost to rent a high-end finished property, he said.

Red Lodge council member Sandy Conlee explained the narrow vote on the ordinance.

“The mayor, at the time, thought STRs were the reason we didn’t have enough rental housing for our workers,” Conlee said in an email. “She chose a committee to research the issue. They did, however, debunk the perception that STRs were the reason we were short on rental housing for our workers.

In a follow-up email, she said, “The appointed committee members were already against short term rentals. Their recommendations went to the planning board as the mayor directed. On the planning board there are two of the seven that are definitely anti-short term rentals just on principle.

“The committee was slanted from day one. One was angry because she lives next-door to a short term rental and they park in her ‘parking spot’ on the public street. Another gentleman complained the short term rental next-door let the kids play in the hot tub during the day and the kids were loud. The chair of the committee had lived in Red Lodge for four months and had trouble finding a long-term rental. So the committee was slanted from the beginning, and chose to ignore their own survey because it didn’t validate their opinions.

“A lot of what this committee suggested needed to be done was not done. A few of the items did go through such as the cap on the number of rentals. The committee wanted only 15% of the homes to be allowed to be short term rentals but the city council bumped that up to 20%. The ‘good neighbor policy’ was just a feel good thing, but not a big deal. Many of the short term rental property managers already had a policy that asks their guests to be good neighbors to the properties around them.

“The makeup of the city council at that time had three of the six city council members that would rubber stamp anything that the mayor wanted to be done. There was another set of restrictions proposed to the city council last year that failed. That one put short term rentals only in one zone. It was decided that it was better to have them spread all over town as opposed to one zoning area so that when they’re not rented you wouldn’t have a dark block.”

Attempts to contact Jody Ronning, Red Lodge Council president, whom the mayor said was involved in the creation of the ordinance, did not respond to requests for comment about the vote.