The Negative Effects of VRBOs on Neighborhoods

Vacation rentals hurt neighborhood stability and property values

By Fred Zavodny

Vacation Rentals By Owners (VRBOs) are short-term vacation rentals. Short-term vacation rentals are defined as occupancy of 30 days or less. They are primarily focused on alternate lodging for travelers and tourists on vacation. In most cases they are fully furnished and equipped private residences.

VRBOs are currently permitted in most business zones within the City of Kalispell. They are not permitted in any residential zones. Slowly but surely, Kalispell is experiencing VRBO creep into residential areas. In other words, illegal businesses are currently operating in residential areas of the city. Unfortunately, instead of shutting the illegal VRBOs down and keeping residential neighborhoods intact, the city is moving forward with a plan to legalize them in all residential areas of the city. If this plan takes effect, there will no longer be any purely residential areas left in the city! This is unacceptable.

The illegal business intrusion into residential areas is problematic for residents for the following reasons.

Neighborhood Stability: VRBOs can impact the stability of established residential neighborhoods. By their nature they introduce an unknown transient component that can quickly upset neighborhood stability. With a VRBO in your neighborhood, it is likely you will have different neighbors every couple of days. You will never know who your neighbors are. Is this what we want our community to become?

Property Values: VRBOs can have a negative impact on property values. A VRBO adjacent to a residential home for sale can certainly have a negative effect on prospective buyers looking to establish themselves in a residential neighborhood.

Additionally, how many VRBOs would be permitted in any given block or neighborhood? Given the fact Kalispell is located in a prime tourism area, it is certainly possible VRBOs could become so popular that they could easily outnumber permanent residences in any given block or neighborhood. This is detrimental to everyone in Kalispell who has invested their hard earned money to purchase a house with the understanding they were investing long-term in a residential neighborhood.

At the City Council workshop held on Sept. 12, 2016, the following items concerning VRBO’s were discussed.

Covenants: Neighborhoods with existing covenants could change them to exclude VRBOs. This may sound reasonable at first blush, but it reality it would involve a monumental undertaking that would be remarkably unfair to everyone that invested in the residential neighborhood. It certainly sounds like the city is trying to pass the buck on the covenant issue. Neighborhoods without covenants most likely have no recourse whatsoever.

Self-Regulation: The VRBO community would be self-regulating. I believe we have seen enough recent self-regulating failures to know that this should not even be an option.

As city-wide VRBOs will impact every residential property in the city, I encourage the city to include a copy of any proposed action concerning VRBOs in residential zones to be included with the appropriate water billings, or other official mailing, well prior to acting on it. This will allow the residents that will be impacted by VRBOs the opportunity to voice their concerns. Everyone with a concern should contact city officials and the planning department and provide your input to them. The residential structure of the community may well depend on it.

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