Missoula is Watching How Bozeman is Handling Short-Term Rentals

Missoula, MT (KGVO-AM News) - Air BnB’s and VRBO’s, (Vacation Rentals by Owner) commonly known as short-term rentals, are getting a lot of attention in areas where housing is tight and very expensive, including communities like Bozeman, the single most expensive place to live in Montana.

KGVO News spoke to Erin George, Deputy Director of Community Development for the city of Bozeman on Monday about what their city commission is doing to alleviate the shortage of housing currently tied up in short-term rentals.

Bozeman is Currently the Most Expensive Place to Live in Montana

George said Bozeman has designated three types of short-term rentals.

“Type one is ‘owner-occupied’, and the owner is present during the entire rental period,” began George. “Type two is ‘owner occupied but they rent it out when they're not present’. And type three is ‘non-owner occupied’. So those are the categories, and then there's kind of a gray area with the type twos, in that there are also accessory dwelling units (ADU’s) and one unit in a duplex when the owner lives in the other unit. So those are grouped into type twos as well.”

After much consultation, George said the City Commission made what was an unpopular decision with some Bozeman property owners.

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The Bozeman City Commission wants to Ban Type-3 Short Term Rentals

“We were given direction from our City Commission for the next steps, and the directions they gave us were that they would like to ban type three short-term rentals citywide,” she said. “They also want to divide our type twos into two ‘A’ and two ‘B’ to separate out single-family homes from ADU’s and attached units. The other piece is they also wanted to change the residency requirement for type one and twos to require instead of 50 percent of the year as a residency to count for type one or two that they would have to change it to 70 percent.”

Naturally, George said the owners of type three units were greatly opposed to the recommendation by the city commission.

A Renters Organization Supports the Ban that would Free Up More Rentals

“We did hear from quite a few people that they are not out-of-state hosts that own from elsewhere, and while there are some of those, we also heard from quite a few people who are local, and they just own a second home for investment reasons,” she said. “And so that's the kind of feedback we heard on that side. On the other side, we heard from renters, mostly involved with Bozeman Tenants United, expressing concerns over rising rents, housing availability, and their perception that short-term rentals are using up housing units and that banning type threes would free up housing units.”

Here in Missoula, City Councilor Sandra Vasecka opposed the idea of disallowing short-term rentals, as a matter of private property rights.

"Why should other people dictate what or who you can rent your house out to and for how long?," began Vasecka. "Like most big cities in America, a lot of people have to commute in. So, unfortunately, that's Missoula's trajectory. However, I don't think that we should stop that by hindering people's availability to use their property as they see fit."

There will be a meeting in Bozeman on Tuesday night to make a decision on eliminating the type three short-term rentals.

George will update KGVO News on the situation after the meeting on Tuesday.