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HomeMy WebLinkAbout10-17-23 Public Comment - C. Heiland - Vote NO on Ordinance 2149From:Chase Heiland To:Agenda Subject:[EXTERNAL]Vote NO on Ordinance 2149 Date:Tuesday, October 17, 2023 10:58:51 AM Attachments:Outlook-eu413y2z.png 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. a. Ordinance 2149 is not necessary. While there is a shortage of affordable housingin Bozeman, vacancy rates for rentals are on the rise. Bozeman’s HRDC is reporting that there is currently a 7% vacancy rate for rentals in Bozeman. b. Ordinance 2149 will not help create affordable housing and will harm effortsto create affordable housing. i. STRs are not transferable to affordable housingunits. Bozeman commissioned a study this summer by a firm calledEconomic & Planning Systems, Inc. (or EPS). EPS found that about63% of STRs are valued above the median value of housing units. Those homes are far from being affordable. If the City stops them frombeing rented short-term, they will not be converted to affordablehousing. For the vast majority of Bozeman STRs, those STRs are nottransferable to affordable housing units. As a result, cracking down onSTRs does little to nothing to improve the affordable housing crisis wehave in Bozeman. ii. STRs bring tax revenue that can be used to createaffordable housing. Just like hotels, there is an 8% total lodging tax ona stay in an STR. Local entities get funds from that tax pool, which canbe used for promoting tourism or partnerships to create affordablehousing options, among other things.c. Ordinance 2149 would create an unreasonable burden on property owners inexchange for a very minimal public policy impact. The City shared that thereare 306 registered short-term rentals, and there are 22,500 total housing units(homes, apartments, etc.) in the City. That means that STRs are 1.36% ofBozeman’s housing stock. Type 3 STRs, which the Ordinance would banoutright, are just .31% of Bozeman’s housing stock.d. Ordinance 2149 is premature and will be confusing. i. Ordinance 2149 includes new charts for what typesof short-term rentals will be permitted in what zones, but the City is in the middle of rezoning. Through its Development Code update work,the City is rezoning, and properties in one type of zone now may well be in a different type of zone when the Code is completed. It does notmake sense to pass Ordinance 2149 in the midst of the development code update, which makes it impossible to tell for sure what types ofSTRs will be permitted at what addresses in the future. ii. Also, the City just passed Ordinance 2131 thissummer, If the City were to enforce that, the City would shut down hundreds of STRs that are operating without a City license. Until thatOrdinance is implemented to determine what kind of impact it will have on the lodging base, housing, and the economy, it doesn’t make sense to take even more STRs out of the market.e. If Ordinance 2149 does not grandfather existing STRs (if the Commission ignores the Board’s recommendation), it will be depriving property owners ofvested property rights through a retroactive or ex post facto law. i. The new MT Land Use Planning Act that passedthrough the Legislature this year and was effective in May appears torequire cities to grandfather existing STRs. See SB 382, Section 18,Subsection 8. Also, Bozeman’s proposed amendments to theDevelopment Code would require grandfathering too, though the newCode hasn’t been voted on yet. Montana’s zoning laws in othercontexts (including county zoning statute, Mont. Code Ann. § 76-2-208)call for protecting prior uses that would otherwise be non-conformingtoo. ii. Many owners have spent thousands of dollarsupgrading their properties to rent them out, and they made investmentdecisions to buy and rent their properties. They use that income to paytheir bills and support their families, and they had reasonableexpectations about the use of their properties. If they are forced to stoprenting, they may be in violation of mortgage agreements or 1031exchange requirements. When the City created the first STR ordinancein 2017 (Ordinance 1974), it grandfathered existing STRs, and, at aminimum, the City should offer grandfathering now. f. Ordinance 2149 would permit hotels and bed and breakfasts in many zones – butnot short-term rentals. And it would shut down all Type 3 STRs, even incommercial zones. From a policy perspective, that is unfair and illogical, and itfavors hotel and other corporations over Montanans who are just trying tomake ends meet. As the Board heard last Monday, many STRs are owned bylocal Montanans – most are not owned by large out-of-state investors or nationalcorporations. i. STRs have been around for decades in Bozeman,and they are part of Bozeman’s historic character. If the City shuts down STRs, the result will be more hotels and commercial housingunits.g. STRs are good for Bozeman’s economy. i. They fill a critical need for lodging for tourists,families bringing kids to sporting events or school, and visitingprofessionals. The EPS study that the City conducted this summerfound that STRs account for 43% of the lodging base in Bozeman. Many of those are operating without a City license, so if the City cracksdown on those (by implementing Ordinance 2131 that it passed thissummer), and then cracks down on the legally operating STRs at thesame time, there will be a large shortfall of available rooms. Accordingto the Bozeman Chamber of Commerce, tourists brought around $1Billion into the Bozeman economy in 2022 – to restaurants, recreationalactivities, and lodging. ii. STRs bring jobs for Bozeman residents, includingthose who work in lawncare, snow removal, cleaning, construction,painting, paving, property management, security, and trash collection, not to mention those who work in local restaurants, bars, retail stores,and recreation outfits. h. Along those lines, STRs provide valuable and affordable lodging options forMontanans. i. According to the Bozeman Airport, only 10% ofvisitors to Bozeman arrive here through the airport, which means that90% arrive by car – most of whom are coming from other cities inMontana. Those Montanans need housing options, including STRs –not just hotels. When traveling with children, many people prefer tohave a place to stay with a kitchen and rooms together – not separatehotel rooms where they have to go out into a hallway to get to theirkids. Many traveling healthcare providers want a place to stay wherethey can use the kitchen, do laundry, and feel like they are at home –not just a room with a bed. Many people traveling with friends orextended family want a place to stay where they can barbeque on a deckor let kids play in the yard. STRs provide a valuable lodging alternativeto hotels. ii. STRs are often much more affordable than hotels. And this Ordinance – by decreasing the supply of lodging optionsavailable – will drive up the price for the remaining hotel rooms that areavailable in the City of Bozeman.