Lawmakers eye changes to short-term rental regulations

Legislation to shield short-term rentals from local restrictions failed to clear the Senate Wednesday, while another bill making it harder for localities to regulate them advanced.

Senate Bill 467 would have prohibited counties, cities and towns from enacting restrictions on rental periods for Airbnb-style lodgings, or from banning them outright. Bill sponsor Sen. Jeremy Trebas, R-Great Falls, said those restrictive ordinances can stand as a barrier to residents being able to make extra money by renting out a room on their property.

“Local government, to me, has only usually served to be an impediment to being able to support myself, and many others are in the same boat,” Trebas said. “They certainly like to raise taxes, but what are they doing to allow me to pay those taxes?”

Yet both Republican and Democratic lawmakers argued it should be up to local governments to make decisions on short-term rentals, which some blame for exacerbating the lack of affordable and workforce housing in the state.

Sen. Carl Glimm, R-Kila, said he’s seen short-term rentals displace what could otherwise be much-needed affordable housing stock in Columbia Falls, a gateway community to Glacier National Park that lies within his district.

“Usually I’m pretty everybody-do-what-they-want, but in this regard I think we need to leave it up to the localities, because it’s not a one-size-fits-all throughout the state,” Glimm said.

Democrats have bemoaned a steady parade of GOP legislation this session that limits the power of local governments. Republican Sen. Russ Tempel, of Chester, echoed those complaints in a moment of frustration during the floor debate.

“I think what we should do, is we should just eliminate all counties and cities,” he suggested sarcastically, prompting laughter from the chamber as is neared the tenth hour of an all-day floor session. Referring to his tenure as a Liberty County Commissioner, Tempel added, “I spent 18 years fighting some of this stuff and trying to make local government work. And it looks to me like we’re fouling it up.”

The bill failed to pass a preliminary vote, 18-32.

But Senate Bill 268, creating some barriers for local governments imposing regulations on those types of rentals, cleared the chamber on a party-line vote on the final day before the transmittal deadline.

Sen. Greg Hertz, R-Polson, said his bill is aimed at allowing families struggling to afford homeownership to use a residence on the same parcel as their home as a short-term rental. The measure would prohibit local governments from passing regulations that prevent property owners from doing so on their primary residence, and would apply in the same way to homeowners with an Airbnb on an adjacent property.

The measure further restricts localities by requiring them to complete an extensive process to justify regulations on short-term rentals. That includes local covenants.

“They can’t just say, ‘Oh, we’re gonna ban short-term rentals, we don’t like them, they’re getting into our rental property,’” Hertz said. “You really have to dig down and provide evidence that there is a need to eliminate these.”

All but three Republican senators voted for the measure, while Democrats were united against it.

And another measure working through the house, House Bill 430, seeks to tax short-term rentals to fund a proposed “rent local” program to incentivize property owners to rent to local employees. It’s sponsored by Rep. Jane Gillette, a Republican from Bozeman, where the lack of affordable workforce housing has been especially acute.

To participate in the program, counties and other local jurisdictions would need to enact a 0.25% sales tax on short-term rentals to fund it. HB 430 was heard in committee last month, but because it is expected to incur an additional cost to the state to oversee the program, it doesn’t need to pass the House until later in the session.