Board holds off vote on vacation rentals

The Whitefish City-County Planning Board on Feb. 17 postponed a vote on a plan to increase the number of short-term rental units in Whitefish so more information can be gathered.

As explained by Eric Mulcahy, representing Courtland Chelmo, who brought the proposed zoning-text amendment to the planning office, the opportunity to offer short-term rentals inside residential areas could be increased by a three-step method:

• Approve a text amendment that establishes the process and protective measures for neighbors. That requires approval by the city council.

• Create 10-acre zoning overlays with multiple contiguous properties where short-term rentals would be allowed. That would require approval by 65 percent of the property owners in the area.

• Require that any home used for short-term rentals be registered with the city. Planning staff recommended instead that each rental unit have an administrative conditional-use permit, which would require notifying adjacent neighbors.

Among the protective measures offered were limiting dwelling-unit density to less than what already is allowed for the neighborhood; requiring three off-street parking spaces per unit, a state accommodation license, a sign-off from the fire marshal, an inspection by the planning office, a city business license and posted owner contact information; and not allowing signage advertising.

An enforcement measure attached to the plan would address the large number of suspected illegal short-term rental units. Lacking manpower to track down illegal units, city planners recommended instead making it illegal to advertise a short-term rental in an area where it’s not allowed.

City planning director David Taylor described the plan’s pros and cons. While increasing the number of short-term rentals could increase resort- and bed-tax revenues, expand options for tourists, improve property values and spur development in some subdivisions, it could also impact traditional neighborhoods with strangers, traffic, noise and reduced parking, increase competition with other lodging, and shrink the pool of available homes for long-term rentals and affordable housing.

Five people addressed the planning board. Jill Evans, who lives in the same neighborhood as the applicant, asked the board to reject the proposal. She cited all the past efforts that went into zoning Whitefish and areas already set aside for short-term rentals.

“Is Whitefish a town or a resort?” she asked, predicting a future lawsuit if the plan was implemented.

Jill Zignego, of Five Star Rental, disagreed,

“We’re a great town and a great resort,” she said.

Zignego described the demand for short-term house rentals versus bed-and-breakfasts and hotels but said she didn’t expect many applications would make it through the process. She also pointed out that in 15 years of handling short-term rentals, she had only received three complaints.

Jeff Raper, a Realtor, said Whitefish has an “extreme shortage” of short-term rentals. Whitefish has grown and changed a lot since it was zoned, he said, and the city didn’t establish enough resort-residential zoning areas.

Donna Emerson, who lives at Wildwood Condominiums on Wisconsin Avenue, described how the owners there had offered short-term rentals illegally in the past without knowing it, but without any problems. She said the 10-acre minimum could pose a problem for getting Wildwood to qualify.

John Gladder said he paid a premium for resort-residential property on Colorado Avenue and was concerned the proposal would lessen his property’s value.

Following an hour-long discussion, planning board members agreed they needed more information on the economic impact of the plan on the community. They wanted to know the number of potential 10-acre overlays, the number of short-term rentals that currently exist and how often they’re rented out, and how many illegal rentals potentially exist.

Diane Smith said increasing the supply of short-term rentals without increasing the demand could drive down prices. She also noted that the enforcement section could be implemented separately from the rest of the plan.

Several board members said they believe Whitefish has a shortage of short-term rentals, but Karen Reeves wanted to know how the plan would affect the city’s carrying capacity for traffic and police in summer.

Chris Kelsey proposed allowing areas smaller than 10 acres where multi-family zoning exists as a way to address Wildwood’s dilemma.

The board will discuss the proposal again on March 17 and take comments from lodge owners and others. The plan will go to the Whitefish City Council on March 21.