Columbia Falls City Council Holds Short-Term Rental Workshop

Dozens of people packed into the Columbia Falls City Council chambers Monday night to learn more about the presence of short-term rentals in the city and how their local government regulates the controversial lodgings.

Short-term rentals are defined as a rental that is rented for a period of less than 30 days. They have exploded in popularity over roughly the last decade, and Flathead County is believed to have the highest number of short-term rentals in the state. Columbia Falls is aware of 128 short-term rentals operating in its jurisdiction, which extends about a mile outside of city limits, although that total does not include Meadow Lake Resort.

The nearly standing-room-only meeting was informational, and whether or not the city council opts to take further action remains to be seen.

Columbia Falls City Attorney Justin Breck encouraged the council not to take any drastic measures. During a presentation to the council, he noted there are ongoing lawsuits in Montana related to cities’ abilities to regulate short-term rentals under the Montana Residential Landlord Tenant Act, and because short-term rentals are a relatively new phenomenon, there are no precedent-setting decisions from the Montana Supreme Court on the topic that could provide guidance. Breck’s presentation to the council also included reference to a 2021 study from the University of Montana which found Columbia Falls, Whitefish, and Bozeman have some of the most comprehensive short-term rental regulations in the state.

“I’d much rather be careful, cautious and prudent, than become another defendant city that has to spend a lot of money defending a lawsuit, potentially. We do, as the study indicated, more than 95% of cities and local governments in Montana,” Breck said.

Breck also shared that of the total short-term rentals the city is aware of, none are owned by corporations, and five are owned by limited liability companies, all of them consisting of one to three people, with one such company owning two short-term rentals.

“The only involvement that we can see of corporations or larger businesses is in the property management of them, not the ownership. A lot of vacation home owners will hire a property management company and pay them a commission or a fee to clean, advertise and market the place, but they’re not owned by those,” Breck said.

When asked by Mayor Don Barnhart if he could recall receiving a complaint having to do with a short-term rentals, Columbia Falls Police Department Chief Clint Peters said that he could not recall being called to a short-term rental for anything other than parking issues. The police chief also indicated that he might not necessarily know a complaint was related to a short-term rental unless that came up in the course of investigating or responding.

Eric Mulcahy, the city planner, explained that the current city regulations for short-term rentals were adopted in 2012, after a subdivision in 2011 garnered interest from prospective buyers, including one who was interested in short-term rentals. The city council at the time opted to put what Mulcahy called “sideboards” into place to identify health and safety issues, and ensure the payment of property taxes from the rentals, and use the conditional use permit process to review proposed short-term rentals on a case-by-case basis.

The city requires a conditional use permit for a vacation rental in a residential zone, while allowing vacation rentals as permitted uses in the city’s commercial districts. In zoning districts where vacation rentals are permitted, the city requires a form to be filled out in order to register the rental, and the rental is also required to have an inspection from the fire department and the Flathead County Health Department.

For the conditional use permits, those same inspections are required, and the city also requires additional paperwork, and can have a city zoning administrator conduct an onsite inspection prior to approval. Of the short-term rentals in city limits, the majority of them — 78 — have gone through the conditional use permitting process.

Homeowner’s associations can institute additional regulations, but homeowners who vote against those regulations are allowed to opt out, something Breck said is related to legal precedent that protects the property owner on the basis of what regulations they knew to be in place when they originally bought their property. A future homeowner, though, would be subject to the new homeowner’s association regulations.

Attendance at the meeting was promoted, in part, by Housing For ____, a community group headed by Whitefish resident Leanette Galaz, which had also encouraged public participation in a November Whitefish City Council meeting where officials in the neighboring city made the decision to hire a short-term rental enforcement officer.

During public comment, a handful of people asked questions or made comments. One woman told the council she had complained about trash from a vacation rental that had not been collected, but that emails to the city had gone unreturned. Another person wanted to know how short-term rentals related to campgrounds. Mulcahy, the city planner, said that the ability to have a campgrounds or an RV park is dependent on whether or not they are allowable in the zoning district in question.

Another person asked how changing zoning for short-term rentals could affect home prices. Councilor Mike Shepard responded, saying that he lives 80 feet from a short-term rental, and that someone who recently appraised his home told him that it doesn’t do anything to the home value and that the home is worth what it’s worth based on current market value.   

Another commenter encouraged the council to be proactive, saying that housing was getting difficult in Columbia Falls, including as it relates to long-term rentals. The same man told the council that while it was good to hear Shepard’s anecdote about the appraisal value for homes, people who live in Columbia Falls’ neighborhoods want to see families move in, something he connected to the city’s sense of community and to community involvement.

At one point, Barnhart, the mayor, speculated that expensive homes being used as vacation rentals aren’t taking affordable housing off the market, and pointed to a lack of affordable rentals as a housing-related problem the city is going through right now.

One of the last commenters said that he owns both long- and short-term rentals and asked what the city would do for people like him that had invested in properties at expensive rates and wouldn’t be able to keep up with mortgages if there were more zoning changes put in place. In response, Mulcahy said that if the city did enact something more restrictive related to zoning, people with existing short-term rentals would be grandfathered in.