House committee advances bill deregulating short-term rentals

By Zach Hagadone
Reader Staff

A bill to dramatically reduce the powers of counties and cities to regulate short-term rentals cleared the Idaho House Business Committee following a hearing Feb. 9, where legislators decided with a sole dissenting vote  to advance it to the full House with a do-pass recommendation.

House Bill 583 was introduced by Committee Chair Jordan Redman, R-Coeur d’Alene, and written in collaboration with international vacation rental company Airbnb. In his closing remarks at the Feb. 9 hearing, Redman described the bill as “part of a three-year discussion,” referring to previous attempts to reign in STR regulations that have all failed to make it to the governor’s desk.

“This is just part of restoring property rights back to our constituents in the state of Idaho,” he said.

Testimony at the hearing leaned toward support for H.B. 583, with almost all proponents framing the issue as one of overreach by local governments, placing undue restrictions on a specific class of property owners.

Idaho Realtors Government Affairs Director Max Pond said H.B. 583 provides “clarity” for both governments and property owners, establishing that because current law states that municipalities cannot prohibit the number of STRs in their communities and are defined as residential uses for zoning purposes, “they can’t be subjected to the overreach we’re seeing across the state, forcing them to meet commercial standards rather than residential standards.” 

Representing the Coeur d’Alene Vacation Rental Alliance, Melissa Radford told lawmakers that counties and cities around the state have “weaponized” existing statute to “turn our inherent property rights into revocable government favors.”

Meanwhile, she said STR operators have been “scapegoated for failed housing policies,” referring to critics’ claims that STRs reduce the availability of long-term housing and erode neighborhood integrity.

The issue has been front-and-center for the city of Sandpoint over the past year, as threats of a lawsuit have loomed over a cap on the number of STRs that are allowed to operate within city limits.

Idaho court rulings have found that municipalities cannot prohibit the number of STRs operating within their communities and, while some have claimed that a cap does not constitute a prohibition, Sandpoint City Attorney Zach Jones has repeatedly warned officials that it would likely be deemed a functional prohibition if taken to court and found to run afoul of current Idaho law.

Following that, the Sandpoint City Council voted in a tie broken by Sandpoint Mayor Jeremy Grimm on Feb. 4 to repeal and replace its former STR regulations — removing the cap and putting in place a number of new regulations including occupancy categories, permitting policies, parking requirements and administrative changes. Councilors Pam Duquette, Kyle Schreiber and Joshua Torrez were opposed, while Councilors Joel Aispuro, Deb Ruehle and Joe Tate were in favor.

While city officials have said the new ordinance brings Sandpoint into compliance with existing statute, if H.B. 583 becomes law, it would again need to be repealed.

“Basically it supersedes cities’ ability to regulate STRs at all,” Sandpoint Planning and Community Development Director Jason Welker told councilors on Feb. 4.

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.” 

That means cities like Sandpoint could not impose separate regulations for STRs based on owner occupancy, 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.

Among other stipulations, H.B. 583 would bar municipalities from requiring STRs to obtain a license, permit or certification, or pay a fee or register in order to operate.

Among those who spoke against the bill on Feb. 9, McCall resident Gregory Irvine said that a large STR next to his home had created a “nearly intolerable environment” with trash, litter, trespassing, uncontained bonfires, drunken brawls, disrespect and nudity.

“It’s been like living next to a luxury hotel — no, a fraternity house,” he told members of the Business Committee.

However, McCall’s STR regulations, which were upheld after a legal challenge, have since improved the situation, and Irvine said those policies should remain within local control — a consistent theme throughout the testimony.

He called on legislators to “maintain common sense regulation and licensing of these businesses that have invaded our neighborhoods. … Full-time residents of our communities should at least be afforded equal rights.”

Driggs resident Josie Gray, who said she owns two properties that operate as an STR/work force housing and long-term rental, opposed H.B. 583 because when STRs “saturate” neighborhoods it “undermines the very character of Idaho’s small towns.”

The bill “strips Idaho cities and counties of nearly all the tools they need to manage these short-term rentals,” she said. 

H.B. 583 proponent Julie Hill, of Lava Hot Springs, said that while local control is preferable “in theory,” “in practice, however, many cities … have abused that control to directly harm property owners and guests.”

Lava Hot Springs, like McCall, has been through the courts over STR regulations, though Lava Hot Springs’ policies were found to be unlawful because they contained a prohibition.

The bill doesn’t eliminate municipalities’ authority, Hill said, “it restores balance.”

Jonathan Wheatley, of the Idaho Association of Cities, testified in opposition, saying H.B. 583 is “giving a lot of weight to those who are not necessarily living in the community day in, day out. 

“Those that are living day in, day out in our communities should have their rights heavily weighted,” he added.

Lawmakers struggled most with the notion of striking that balance between local government control and private property rights.

Rep. Rick Cheatum, R-Pocatello, said that while he normally speaks forcefully for local control, “This time I’m going to have to vote the other way, because I think there are some local government violations that have become egregious.”

Rep. Mike Viele, R-Soda Springs, said that while “certainly cities have overreached, I really dislike this issue. I wish it would have been solved before it reached here.” 

He worried about the effect of unregulated STRs on local sewer and septic systems. Regardless, “In general, this bill needs to happen,” he said.

Casting the lone dissenting vote, Rep. Steve Berch, D-Boise, said, “This is probably going to be the single most difficult vote” he’ll make in the session.

“The most difficult decisions are where you’re trying to balance the valid rights of two parties that are in conflict with each other,” he said.

H.B. 583 now proceeds to the full House.

Editor’s note: This story has been corrected to list the correct vote breakdown on Sandpoint’s repealed-and-replaced short-term rental ordinance.