Despite Influx of Vacation Rentals, Traditional Lodging Remains Strong in Flathead Valley

During the bustling summer months, the Flathead Valley brims with out-of-state visitors whose lodging options now include more than 400 new hotel rooms built this past year.

And with the growing presence of e-commerce, there are also an increasing number of private residences available for vacation bookings through online platforms such as VRBO and Airbnb, which on any given day advertise hundreds of lodging rentals in Whitefish, Kalispell, Columbia Falls, and Bigfork.

But according to city and county officials, scores of local short-term rentals are either illegal or in violation of zoning rules, whether they are occurring in restricted neighborhoods or not following proper safety and business protocols.

Both Kalispell and Whitefish prohibit properties from being rented for fewer than 30 consecutive days in most traditional residential neighborhoods. Properties in Flathead County are also not allowed to rent nightly stays in most areas with single-family housing, although Flathead County officials are on the cusp of finalizing zoning regulations to manage short-term rentals after months of discussion.

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In Whitefish, the resignation of the city’s code enforcement officer has temporarily hampered officials’ ability to investigate reports of illegal short-term rentals, but City Manager Adam Hammatt said it is generally vigilant about pursuing complaints.

“I think we are doing a pretty good job of staying on top of it, but it is a challenge,” he said.

According to VRBO’s online registry, there were more than 670 private lodging rentals in the Whitefish area as of late July, ranging from luxurious homes for $300 a night to a two-bedroom cabin in the woods for $191 or a condo on Big Mountain for $98.

In Columbia Falls, there were more than 300 short-term rentals, and Kalispell had nearly 90, according to research by city officials.

Short-term rentals can only occur in Whitefish’s commercial and “resort” zoning districts, which include the Railway District and some neighborhoods around Whitefish Lake. Properties eligible for vacation rentals are also required to have a short-term rental permit with emergency contact information and parking requirements, as well as a business license, which includes an annual fee ranging from $30 to $100 depending on the size of the property. Properties must also pay the town’s 3 percent resort tax and gain approval from the fire marshal.

A property owner found in violation of the city standards will receive a cease-and-desist letter from the city. Violations can also result in a revocation of the short-term rental permit and business license, and potentially a fine.

As the volume of short-term rentals has swelled in recent years, enforcing those regulations has proven burdensome, particularly as property owners omit details about the locations of their properties.

“We do deep dives into vacation rental websites, but some property owners don’t post their addresses, so it can take time to track down their properties,” Hammatt said. “Sometimes all we have is a photograph.”

One problem that the growing popularity of short-term rentals presents is that it diminishes the inventory of long-term rental options, which has emerged as an impediment to a local workforce that is increasingly being priced out of the housing market.

“As more people realize that there is money to be made in short-term rentals, they are increasingly taking long-term housing off the market,” Hammatt said. “That’s just one less space for our local residents to occupy.”

Despite the rise of short-term rentals in the Flathead Valley, local tourism bureaus report steady occupancy rates in its traditional lodging accommodations.

Whitefish’s suite of lodging options include several new hotels within city limits and a host of offerings at the base of Whitefish Mountain Resort, while Columbia Falls added a 64-room hotel last year.

During the spring and summer of 2016, Whitefish gained approximately 160 new guest rooms, significantly boosting its catalog of lodging options.

“Last summer, there was some form of lodging availability in Whitefish every day of peak season,” according to Whitefish Convention and Visitors Bureau Executive Director Dylan Boyle. “The same pattern has held true so far this summer.”

“With that said,” he continued, “both lodging occupancy and the average daily rate increased in June compared to last year, which is encouraging as June is still considered part of our spring shoulder season.”

Most Popular Airbnb Cities in Montana

1) Big Sky 452 listings

2) Bozeman 443 listings

3) Whitefish 335 listings

4) Missoula 324 listings

5) West Yellowstone 238 listings

6) Kalispell 147 listings

7) Livingston 137 listings

8) Helena 108 listings

9) Columbia Falls 105 listings

10) Bigfork 97 listings

Highest Average Priced Airbnb Cities in Montana

1) Big Sky, $652

2) Gallatin Gateway, $378

3) Polson, $300

4) Red Lodge, $295

5) Bigfork, $280

6) Whitefish, 278

7) West Yellowstone, $263

8) Emigrant, $226

9) Columbia Falls, $214

10) Gardiner, $212