At workshop, city reveals its short-term rental numbers

Seats were filled at Columbia Falls City Council on Monday, Jan. 22 for a workshop on short term rentals. Currently there are no recommended changes, and all information gathered by the council is being taken under advisement. 

City Manager Susan Nicosia outlined present STR regulations in Columbia Falls. The current zoning code was adopted in 2012, allowing conditional use permits (CUPs) for STRs in agricultural and residential zones and permitted use within commercial zones CB2, CB4 and CB5. 

The city reported 128 total vacation rentals, with 108 in city limits and 20 outside but in the city’s planning jurisdiction. Within city limits, 78 were granted CUPs and 21 were commercial permitted, with nine in progress. 

City numbers seem to conflict with data provided by AirDNA, a firm that tracks the vacation rental industry. The company reported a peak of 650 vacation rentals in the ZIP code 59912 for July 2023 — granted, that includes rentals ranging from a room to an entire home and rentals that are short-term only for the summer months. Also, the 59912 Zip Code is geographically large and includes lands outside the city’s planning jurisdiction.

Nicosia noted that the city searches common STR sites for properties that may need to be permitted and additionally relies on utility bills to alert them to noncompliant rentals. Of all the city’s registered STR properties, only five were owned by LLCs, which were made up of three or less people. None were owned by corporations.

Each STR must be registered with the state of Montana and city, and have a health department and fire department inspection, the latter of which sets maximum occupancy limits. Letters are sent to all neighboring properties within 150 feet of a potential STR to collect public comment during the permitting process. Each unit is required to provide at least two off-street parking spaces, and no signage advertising nightly rentals is allowed to be placed in suburban, residential or agricultural zoning districts. Repeated complaints of disturbance of the peace by visitors or violation of city regulations can result in revocation of an STR’s permit. 

Columbia Falls Police Department reported no increase of calls for service related to STRs. Chief Clint Peters confirmed that the only case he could recall was a single parking dispute. 

“Unless we can tie more restrictive local laws to hard evidence that they are needed to address actual threats to public safety, those laws may not pass the due process to be applied,” City Attorney Justin Breck advised. 

Breck presented examples of attempted regulations in cities worldwide. Some city ordinances require AirBNB or VRBO host sites to disable accounts of owners who do not comply with local regulations, and cities tend to limit guests, nights and times a property can be rented.

Across Montana, the most comprehensive regulations are found in Bozeman, Whitefish and Columbia Falls. Examples of other regulations within the state include specific STR zoning, a limit on the number of STRs in all zones, a maximum percentage of residents in some zones that can own STRs, and a cap on STRs where operating STRs were grandfathered in and no more allowed. In the future, taxes have been considered. Some STR owners are required to provide a list of do’s and do not’s for renters to reduce complaints. 

Breck pointed out that recent legislation, namely HB 283 and SB 262, could prohibit self-governing powers from requiring licensing or regulating landlords when the state is the original regulator through the Montana Residential Landlord-Tenant Act, Residential Tenant Security Deposit Act and Montana Residential Mobile Home Rental Act. 

“The original license for operating an STR comes from the state for a tourist home, and by requiring a separate license, as the argument goes, a city would be attempting to occupy a field of regulation the state already occupies,” Breck explained. Litigation is currently pending as to whether that rings true.

“My thought with regard to recent litigation is, because we don’t know what the outcome of some of these cases is going to be … I’d much rather be careful, conscious and prudent than become another defendant city that has to spend a lot of money defending a lawsuit,” Breck said.

Breck cited a Montana survey recording positive impacts of STRs in the state, such as temporary places for people to stay while searching for housing and a financial benefit for singles with high rents, retirees with empty homes or couples with spare rooms that need extra income. At city council, owners of STRs were informed that any changes to zoning would not be applied to present STR properties, which would be grandfathered in. No evidence was presented that having an STR in a neighborhood could affect market value. 

On the con side, Montanans were concerned by potential availability of affordable housing for working families, negative impacts of noise and traffic, loss or change of community identity, and perceived increase of home prices and reduction in workforce. These worries were echoed through public comments at the council meeting, with many people wanting to build a community of neighbors they know, not strangers passing through, and concern about available housing for local families. 

Mayor Don Barnhart brought up a previous discussion of properties downtown being used for STRs. 

“Those are expensive houses, and the folks that are buying them and putting them out there as [STRs] aren’t taking anything off the market for affordable housing… I don’t know whether the rest of the [STRs] in Columbia Falls, if they weren’t being used for an [STR], are they even considered affordable rentals?” Barnhart said.

Breck added that further regulation by the city could be a legal risk. 

“We are already one of the most restrictive communities in Montana regarding STRs. I wouldn’t suggest that necessarily makes us a target.. but I think going any further poses some risk,” he said. 

City Council will return to their regular meeting Monday, Feb. 5 at 7 p.m. Agenda had yet to be released as of presstime, but be can found at www.cityofcolumbiafalls.org.