HomeMy WebLinkAboutSTR Focus Group Summary 02.07.2023Short Term Rental Focus Group Summary
The City Commission prioritized efforts to better understand how regulation of Short Term Rentals
(STRs) in Bozeman may influence housing supply and affordability. According to available data from
Host Compliance, there are 918 active Short Term Rental (STR) listings in the Bozeman area (based on
City's jurisdiction limits). Out of 20,988 total households, STRs make up roughly 4.4% of the overall
housing supply. The city’s STR registration process requires owners of STRs to register with the city. Only
253 or 27.5 % of STRs are registered with the City.
After a City Commission work session in summer 2022, staff were directed to engage with owners of
STRs about potential incentives to convert STRs into long term rentals. The purpose was to gather
feedback from local STR owners on motivations, incentives, and barriers to converting short term rentals
to long term rentals.
On Wednesday, January 18th, city staff from Communications, Legal, Planning Division, and Community
Housing Program facilitated and recorded conversations with 13 STR owners at City Hall. Participants
were selected from the city’s current list of registered STR owners to represent diversity across duration
of time registered with the city, number of STRs owned, and location across the city.
Summary of Themes
What we heard from participants is summarized into five main themes:
1.Financial benefits of STR over LTR
o Participants stated that the income earning potential is greater with STRs
o Helps some participants pay their mortgage
o Some mentioned STRs as a long-term financial investment for their future (retirement)
o About 1/3 of participants voiced support for a financial subsidy to convert their STR to
an LTR
“Big Sky does it; it’s a short-term solution”
“As an owner, it would help bridge that gap”
o About 2/3 did not support financial subsidy to convert their STR into an LTR
“Tax payers won’t want to foot the bill for a program that only benefits STR
owners, and it likely wouldn’t incentivize them anyway”
“Subsidy is a recipe for failure. Would not incentivize them to convert. Better off
putting subsidy toward building affordable housing”
“Focus on future planning. Incentivize developers, not hosts”
“Big Sky Rental program is an example of what didn’t work”
2.Lack of enforcement of existing STR regulations
o Participants viewed the city as not enforcing or following through on STR regulations
and wanted staff to focus on compliance rather than converting or banning STRs
“We haven’t seen what enforcement can do – and there are problems w/ the
permit system”
“People are doing STRs illegally”
“Enforce a business license for a type 3”
“The data suggests 5,000 STRs for Bozeman may be healthy. We should enforce
it, and celebrate it”
3. Flexibility and convenience of STR over LTR
o Some participants brought up how STRs are more flexible than LTRs for owners as they
want to be able to use it part of the year or have family and friends use the property
4. Challenges with landlord/tenant relationships and property maintenance with LTRs
o Participants talked about challenges with LTRs when it comes to tenants. There is
increased wear and tear on LTRs
o Some hosts had long-term rentals and decided to convert to STRs due to bad
experiences
“Tenants not paying rent, or are late with rent, and the eviction process is
daunting”
o Many viewed long-term leases as a bigger liability and STRs as less risky.
5. Potential solutions
o Bulk leases for large employers –
“Hospitals are desperate to find housing. May ease some concerns about finding
reliable tenants”
o Limits on number of STR licenses per owner –
“I shouldn’t be able to have 15 vacation rentals”
“Restrict 2nd and 3rd homes as STRs. Prevent out-of-state investors”
“Give developers incentives to ban STRs in subdivisions and CC&Rs to prevent
future proliferation”
o Prohibiting certain types of STRs –
“No new Type 3s”
“Type 3s have increased drastically. City needs to look at that”
“We should all be in favor of more restrictions as long as we are grandfathered
in.”
o Regulating STRs by location –
Setting up a points system on top of existing regulations (seniority, priority in
higher intensity zoning districts, fast track ADU eligibility, STR core
areas/allowing more in areas with existing STRs)
o Create a program to educate, match, and “certify” reliable renters and landlords –
Create a pool of funds (from deposits and fees paid by the tenant) to pay for
background checks; underwrite leases; offer insurance coverage for damages
(like Airbnb)
o City and County investment in buying land, developing housing
Many view lack of housing and increased rental costs are causing the housing
crisis, not STRs.
Instead of focusing on STRs, focus on how we can create a housing market and
environment that creates more LTRs.
Look at vacant land in the County to build housing