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HomeMy WebLinkAbout10-17-23 Public Comment - B. Konkel - Ordinance 2149 Short Term RentalsFrom:Blaine Konkel To:Agenda Subject:[EXTERNAL]Ordinance 2149 Short Term Rentals Date:Tuesday, October 17, 2023 10:38:51 AM CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Dear City Commissioners: I am writing to urge you to vote no on Ordinance 2149. No further restrictions are needed currently. We have yet to see what sort of roll phase one (Ordinance 2131) will have on the market. The city has yet to study the whole picture regarding short term rentals and the role they play on Bozeman’s tourism economy. According to the EPS study that the city had done, STR’s make up 43% of the lodging base. This is inclusive of all 568 legal STR’s and those not registered. At the recent Community Development Board meeting it was stated that there are now 306 registered STR’s, up from 262 previously. This shows that a majority of the 306 unregistered STR’s will no longer be able to rent in the short term. This will wipe out nearly half of Bozeman’s lodging base overnight. The same EPS study shows that it will do little to nothing to affect housing affordability in Bozeman. In fact, the HRDC recently showed that vacancy rates have exceeded 7% and will likely continue to grow in the future as new construction comes on board. The markets are already correcting themselves from the covid “boom”. In fact, short term rental revenues are down nearly 30% at a national level. This shows that it is becoming less lucrative from an investment standpoint. Short term rentals are not causing the housing shortage. Numerous studies including the Colorado Impact Model, California Short Term Rental Study and recently Oxford Economics did a study that showed that housing prices would have been only $800 lower if STR density had not increased between 2015 and 2021. Rent prices would only be $5 lower if short term vacation rental density had not increased between 2015 and 2021. The facts are clear. The existence of short- term rentals does not cause housing affordability issues. Even the state ITRR (Institute for Tourism and Recreation Research) has publicly posted similar information in the State of Short-Term Rentals in Montana as well as other documents and data that can be found on their website. The ITRR is funded by Bed Tax Dollars and exists to provide local entities and businesses with information about Tourism. Instead of the City hiring EPS for a presumably expensive report that showed what the ITRR already showed, I wonder if our tax dollars would have been better spent looking at existing studies and using the ITRR data. Furthermore, this ordinance will do more harm than good and is bad public policy. The airport is already constrained by bottlenecks for airlines. The two main constraints are the population of Bozeman and lodging base. During covid, the airlines were able to change routes to get more passengers in and out of Bozeman, but travelers did not show up due to exorbitant hotel rates and lack of rental car inventory. It is estimated that Bozeman potentially missed out on 20k travelers per month during the summer of 2021 due to lack of lodging availability. Those travelers spend time in the community and help small businesses and families stay afloat. I wonder how many families will struggle with housing affordability if the tourism industry is cratered overnight. STR’s contributes to the 8% bed tax that is paid to the state. These funds are co-mingled with taxes collected from hotels, guest ranches, campgrounds and STR’s and then are distributed at the state level. The local Bozeman Chamber receives roughly 620k in funding annually from this Bed Tax fund. I wonder if the City could look at ways to direct more of those funds to the city for affordable housing and infrastructure projects rather than cut down the source of funding. The State collected over 120 million dollars in Accommodations taxes in FY 21. This ordinance has two stated objectives: 1.Preserve the historic nature of Bozeman. 2.Control the supply of long-term housing to create affordable housing. While it has already been factually shown that banning STR’s will not create affordable housing I also have a hard time reconciling how banning STR’s will preserve the historic nature of Bozeman. STR’s are a part of the historic nature of Bozeman. STR’s have been around for decades if not longer. It wasn’t until 2017’s ordinance 1974 that they were restricted in any way whatsoever. That ordinance allowed for the grandfathering of existing STR units. Bozeman has always been a welcoming tourist community and if we want to preserve that then some level of STR’s needs to be allowed to exist. The city can grow and provide housing for long term tenants as well as have flexible options for tourists, workers, nurses, and anyone else that may need the flexibility of a rental agreement that is not longer than 28 days. What should the city do? The city at a bare minimum must do the following if it fails to vote down ordinance 2149: 1.Amend the ordinance to permit grandfathering of all existing registered short-term rentals. 2. Change the ordinance from prohibiting Type 3 short term rentals to capping them at 5% of the city’s available housing units. 3.Change the definition of primary residence regarding Type 1 and Type 2 rentals from a home where an owner resides 70% of the year to 50% of the year. 4. Clarify that the city will issue short-term rental permits for applicants who comply with all requirements. 5. Clarify that people who own their homes through LLC’s or trusts can still rent their homes. 6. Provide additional notice and time for owners to respond to any notices of potential violations. 7. Make all permits expire at the end of the calendar year and allow a grace period for renewals. Links to Studies: Institute of Tourism and Recreation Research: https://scholarworks.umt.edu/cgi/viewcontent.cgi? article=1419&context=itrr_pubs#:~:text=As%20of%20September%202020%2C%20over,all%20other%20counties%20in%20Montana. Colorado Short Term Rental Study: https://scholarworks.umt.edu/cgi/viewcontent.cgi? article=1419&context=itrr_pubs#:~:text=As%20of%20September%202020%2C%20over,all%20other%20counties%20in%20Montana. California Short Term Rental Study: https://scholarworks.umt.edu/cgi/viewcontent.cgi? article=1419&context=itrr_pubs#:~:text=As%20of%20September%202020%2C%20over,all%20other%20counties%20in%20Montana.