HomeMy WebLinkAbout08-07-23 Public Comment - M. Egge - 8_8 Short-Term Rentals Work Session CommentFrom:Mark Egge
To:Agenda
Cc:Cyndy Andrus; Terry Cunningham; Christopher Coburn; I-Ho Pomeroy; Jennifer Madgic
Subject:[EXTERNAL]8/8 Short-Term Rentals Work Session Comment
Date:Saturday, August 5, 2023 1:29:31 PM
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Madam Mayor, Mr. Deputy Mayor, and Commissioners:
I have three recommendations concerning short-term rentals and housingaffordability:
1) Divide future Type 2 STR permits into two categories: Type 2a) owner-
occupied dwellings, occupied by the owner at least 50% of the calendaryear; and Type 2b) an ADU or one unit of a duplex where the owner lives
in the other unit. This will enable a better future understanding of which
Short-Term Rentals could conceivably be long-term rentals.
2) Discontinue or cap new Type 3 STRs permits (perhaps subject to some
occupancy or affordability threshold).
3) Focus your policy-making energy on enacting reforms (such aseliminating parking minimums and reducing minimum lot sizes) that will
lead to the creation of more housing (especially more affordable types of
housing) or reducing construction costs. This addresses the root of the
problem (not enough housing).
I offer the following observations in support of my recommendations:
The statement that "STRs make up only 2.5% of overall housing supply"
misinterprets the data. The only accurate statement that can be drawn
from the available data is that "2.5% of overall housing units are
registered with the City and/or listed on a short-term rental platform."
This distinction is meaningful. The EPS count of ~600 "STRs" includes Type
2 and Type 3 STR listings that are "owner-occupied primary residences"
that are occasionally rented out on a short term basis while the owner isaway.
To improve future policy discussions, I recommend that the City divide
future Type 2 STR permits into two categories: Type 2a) owner-occupieddwellings, occupied by the owner at least 50% of the calendar year; and
Type 2b) an ADU or one unit of a duplex where the owner lives in the
other unit.
From a policy standpoint, this difference is significant:
"Type 2a" dwelling units that are a primary residence for their owner
occupant (where short-term rental is a secondary use) and cannot,
will not be converted to a long-term rental."Type 2b" dwelling units—where their principal use is as a Short-Term
Rental—are theoretically eligible to be converted to long-term rentals.
If banned, Type "2a" owner-occupied STRs would not be "added" to the
stock of long-term rentals (it would just mean that vacations would beharder on the family finances). There would be no upside (but some harm)
from such a ban.
It seems reasonable to assume that, given the city's existing enforcementefforts, most of the short-term rentals not registered with the city would
fall into the "Type 2a" owner-occupied category.Someone can probably get
away with renting their house out for a week while they're on vacation, but
not week after week).
A significant portion of existing STRs would not be converted to long-term
tenancy, even if banned. 1) Many are primary residences. 2) Some are not
suitable for long-term rental (e.g. lack a full kitchen). 3) Some "Type 2b"STRs are rented only outside of periods of being used for the owners' own
guests—a primary use that many owners would not give up.
Finally, I urge you to keep in mind that short-term rentals are relativelyfew in number, already subject to effective regulation, and provide
community benefits in their own right:
The number of apartments currently under construction in Bozeman
dwarfs the number of existing STRs. Tourism is an important contributor to Bozeman's economy (and STRs
are an amenity that tourists seek). Most STRs in Bozeman are owned
and operated by community residents and are a form of tourism-
related employment. In some cases, STR revenues can help finance the construction of
new ADUs which add to the overall housing stock and may eventually
get converted into long-term rentals (and wouldn't otherwise get built
due to extremely high construction costs in Bozeman). The City should be celebrating the success of the existing ordinance
and promoting it as a model for other communities to follow. Data
from the Montana Department of Revenue concerning the growth of
short-term rentals statewide reported on Page 47 of the firstGovernor's Housing Task Force report shows that the rate of growth
of STRs in Bozeman is significantly lower than other communities
around the state.
Updates to the ordinance to improve enforcement seem warranted.
Ultimately, figuring out how to promote the creation of more housing(especially of more affordable types) is a far more productive place for theCity to invest its policy-making energy than overregulating how a very thin
slice of existing housing units are used. In a housing shortage, more
housing of (all types and uses) is the answer. Enacting reforms (such as
eliminating parking minimums and reducing minimum lot sizes) that leadto the creation of more housing or that reduce the cost of constructions
(such as eliminating requirements that new homes be built with sprinkler
systems, which are illegal to operate due to permanent watering
restrictions much of the time) will ultimately result in a durable increase inhousing stock and reduction in housing costs.
Thank you for your consideration,
Mark Egge
219 E Story St
Bozeman, MT 59715