Bozeman’s city commission tightened its grip on short-term rentals Tuesday with members voting to increase restrictions on rentals listed on Airbnb, Vrbo and other booking sites.
Commissioners voted 3-1 in favor of the new ordinance, which heavily regulates short-term rentals where the owner does not live onsite, termed “Type 3” by the city.
According to the rules, Bozeman will no longer permit Type 3 rentals, which critics say take up valuable housing that could be used for local workers.
However, commissioners opted to allow more than 100 of the Type 3 units that are already permitted to continue operating under a “grandfather clause.” Commissioners Jennifer Madgic and Mayor Cyndy Andrus supported the amendment, citing a shared concern that an outright ban on the Type 3 rentals wouldn’t meaningfully add to the city’s housing stock and could erode trust in local government.
“I don’t think we can forget about the fact that some of the folks we heard from tonight, who own and operate Type 3 rentals, also live and work in Bozeman,” Andrus said, referring to a vocal majority who addressed the commission before Tuesday’s vote.
Bozeman resident Kent Madin was among those who asked commissioners to proceed with caution, saying that a ban on all Type 3 rentals in the city could have unintended consequences.
“Banning Type 3 STRS is like doing surgery with a hand grenade,” said Madin, who told the commission that he owns two rental homes on South Bozeman Street and that seven of his tenants there are long-term renters. Madin said that he offers a large bedroom in one home as a short-term rental and that the income allows him to keep the rents low for his other tenants.
“I think you need to be very, very careful with this,” Madin said.
The commission also voted to increase the yearly residency requirements for what it terms “Type 2” short-term rentals, where the owner lives on-site but is not present during the rental period.
More specifically, that part of the ordinance increases residency requirements for owners of Type 2 short-term rentals from 50% of the year to 70%. The Type 2 rental category also now includes subtypes that specify whether the rental unit is physically attached to the owner’s home or is a separate unit on the same property.
City staff will now review the proposed changes made during Tuesday’s meeting and present the ordinance for a final vote in November. Officials say they’ll continue to accept applications for Type 3 short-term rentals until Dec. 14.
Commissioner Christopher Coburn, who was the lone dissenting vote after the ordinance was amended to grandfather the city’s existing Type 3 rentals, said the city had missed an opportunity to provide housing for its citizens.
Coburn said during the meeting that he couldn’t support the ordinance as amended, noting the 104 rental homes preserved by the grandfather clause should be turned into permanent housing for locals. Addressing the city’s housing emergency, he said, is more important than supporting rental property owners.
“We have to do everything we can to make sure people who live and work in Bozeman are housed, full stop,” Coburn said.
Back in August, Bozeman’s commission passed a separate set of rules to oust illegal rentals when it approved an ordinance requiring booking sites to ask for a license number before approving short-term rentals listed in Bozeman.
City officials say they’ll now work with various licensing platforms like Airbnb, Vrbo, and Booking.com to prevent the restricted Type 3 rentals from coming online.
Airbnb policy manager Jordan Mitchell told MTFP after the meeting that his organization has been in “constant contact” with the city after learning about the proposed restrictions and will work with its staff to implement the changes outlined in the ordinance.
“Airbnb, I believe, was the first platform to come to the table when the city said they were considering an ordinance on short-term rentals,” Mitchell said. “We will continue to be a good partner with the city and continue to work with them on a regulatory structure.”
Members of the group Bozeman’s Tenants United claimed Tuesday’s vote as a victory won through a months-long campaign to ban short-term rentals in the city.
About a dozen supporters of the group gathered outside of City Hall after the meeting, holding a small press conference to celebrate.
“We organized town halls, rallies, vigils, knocked [on] thousands of doors and met with commissioners in our own homes,” said Bozeman’s Marie Lynn, who is a leader in the tenants’ organization. “We believe that people who work in Bozeman deserve to live in Bozeman.”
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