Bill deregulating short-term rentals heads to governor’s desk

Mayor Grimm: House Bill 583 is a ‘significant step’ away from ‘local control’

By Zach Hagadone
Reader Staff

The bill to effectively eliminate almost all powers of counties and cities to regulate short-term rentals is headed to Gov. Brad Little’s desk following a 23-12 vote March 9 in the Idaho Senate.

House Bill 583 cleared the House on a 54-16 vote on Feb. 12, with Rep. Cornel Rasor, R-Sagle, in favor and Rep. Mark Sauter, R-Sandpoint, opposed. Sen. Jim Woodward, R-Sagle, was also against the legislation.

The Idaho Vacation Rental Association applauded passage of H.B. 583, having pressed for the bill along with international vacation rental company Airbnb, Idaho Realtors and others. The organization described it as “a measure designed to clarify the treatment of short-term rentals as a lawful residential use while maintaining local governments’ ability to address community impacts through existing enforcement tools.”

However, critics of the bill such as Sandpoint Mayor Jeremy Grimm feared H.B. 583 would result in out-of-control proliferation of STRs while stripping municipalities of the ability to manage their impacts on neighborhoods — especially in resort communities.

“With the passage of House Bill 583, Idaho has taken a significant step away from one of the state’s longstanding principles: local control over land use and neighborhood planning,” Grimm told the Reader in a statement following the Senate vote.

“While the debate over vacation rentals is complex, the broader issue raised by H.B. 583 is straightforward,” he added. “Decisions about how residential neighborhoods function have historically been made locally through comprehensive plans and zoning ordinances developed with community input. H.B. 583 overrides that local authority.”

According to the text of H.B. 583, “A county or city may enact or enforce such reasonable regulations as are necessary to safeguard the public health and safety as long as the reasonable regulations do not impose different restrictions or obligations on short-term rentals than are imposed on single-family dwellings or similar structures not used as short-term rentals, or unless the regulations are permitted by this section.” 

Based on that language, municipalities are prohibited from applying regulations to STRs based on owner occupancy, nor can they require professional property management, additional insurance, reporting of use or other statistics, additional fire protection, additional or improved means of access, additional parking, structural modifications or inspections.

On top of that — and among other regulatory prohibitions — H.B. 583 would bar local governments from requiring that STRs obtain a license, permit or certification, or pay fees or register in order to operate.

H.B. 583 only allows municipalities to require that all STR sleeping areas be equipped with smoke alarms; properties have a functioning fire extinguisher and a carbon monoxide detector on each floor; include removable escape ladders for rooms above the ground floor; abide by occupancy limits as outlined in the International Building Code; and make available a handout to tenants describing the locations of exits, fire extinguishers and first aid kits, as well as provide a phone number to be used to contact an owner or manager in case of emergency. 

Critically for Sandpoint, H.B. 583 expressly eliminates the ability of municipalities to put any kind of cap on the number of STRs allowed in a given area. That was a major issue for City Hall, when representatives of the vacation rental industry made it clear in 2025 that they would sue the city because of its limitation on the allowed number of STR permits.

That threat, and the desire to get ahead of any potential state legislation, spurred the city to repeal and replace its former STR ordinance — removing the cap while putting in place a number of new policies related to establishing occupancy categories, permitting, parking requirements and administrative tweaks. 

Councilors voted in a tie on Feb. 4, which Grimm broke in favor of putting the new STR ordinance in place, though if Little signs H.B. 583, all that work will be undone.

“Staff will wait and see if the governor signs the bill and, if he does, get to work on rewriting our STR ordinance to reflect only what is allowed under the new state law,” Sandpoint Planning and Community Development Director Jason Welker told the Reader.

Welker warned the council in past statements that if H.B. 583 became law, Sandpoint’s ordinance would need to be rolled back sometime after it goes into effect on July 1.

It was unclear as of press time when Little might take up the bill, which he can either approve with his signature or veto.

Despite the concerns of local officials, Idaho Vacation Rental Association President Spencer K. Bailey stated that the legislation “does not remove local tools or diminish community protections. What it does is reinforce the idea that existing rules should be applied consistently across housing types, focusing enforcement on behavior rather than labeling one category of homeowner differently from another.”

Rep. Sauter told the Reader that he voted against H.B. 583 because he viewed it as “a local control issue.” 

Citing Sandpoint’s rewrite of its STR code earlier this year as an example of how local control works, Sauter added, “I got a lot of emails about it saying how important it was, saying we don’t need the state to gut this or step in and take over that local control, and I’ve tried to stick with the local control and respect that.”

Sen. Woodward and Rep. Rasor did not respond to a request for comment by press time.

Meanwhile, Grimm worried that, “Cities now have no ability to determine where short-term rentals should operate and how they should be managed. That decision has effectively been centralized at the state level, even though communities across Idaho differ dramatically in their housing markets, infrastructure capacity and neighborhood patterns.”

What’s more, he added that the Idaho Legislature’s approval of H.B. 583 contrasts with the national conversation surrounding housing — specifically referring to President Donald Trump’s executive order seeking to limit the amount of residential housing stock bought up by large investors.

“The concern raised in that executive action was clear: Homes should primarily serve families and communities, not simply function as investment vehicles,” Grimm wrote. “Yet, H.B. 583 moves Idaho policy in a direction that accelerates a similar dynamic — opening the floodgates to speculators to profit from converting neighborhoods to seasonal short-term rentals.”

IVRA stated that the bill instead is an “opportunity for Idaho to demonstrate that property rights and strong communities are not competing priorities.”

Again, Grimm pushed back.

“When residential homes are removed from the long-term housing market and converted into short-term rentals, the supply of housing available to local employees shrinks,” he wrote. “The pressure on prices increases, and employers struggle to recruit and retain workers who simply cannot find a place to live in the communities where they work. …

“The risk is not theoretical. If housing continues to shift away from long-term residents toward short-term visitors, communities like Sandpoint could lose the very economic diversification that state leaders and local officials have spent decades trying to build,” he added.