Red Lodge Short Term Rentals Face Further Regulation
Mere weeks after passing a much debated and hotly contested ordinance to regulate short term rentals (STRs), a new assault on the industry is underway in the form of city zoning regulations. According to statements made during the October 24 City Council meeting hearing on the subject (full footage at end of story), the STR zoning map as proposed would push all of the STRs into the half of the city that currently houses the majority of affordable long term rentals, leaving the more affluent neighborhoods with none.
In the public comments section of the meeting Sandy Conlee, Chelsea Toupin, Kathleen Delahanty and Michael Keys voiced their concerns and opinions. Conlee, a real estate agent and soon-to-be councilmember, implored, “Don’t pass something that you can’t enforce and takes away even more individual property rights. You’ve done more than enough to short term rentals, [an industry] which brings in tourists, families and income to the City of Red Lodge.” Toupin, co-owner of Red Lodge Reservations and Ward 1 alderman candidate, proclaimed, “This change would effectively take away the property rights of half of our city to continue to operate and generate tax revenue for our community.” She asked that the issue be tabled for now. They were followed by Delahanty, owner of both long-term and short-term rentals, who stated that she attended all of the STR committee and board meetings and did not remember a 42 day limit being discussed and wondered where that came from. She also decried the further restriction of property rights. Michael Keys, local business owner, rounded out the public comment period with a different point of view stating that “we had plenty of tourists, before VRBO even existed” (NOTE: Short term rentals have been around for far longer than VRBO or Air B&B. Tony Toupin, co-owner with Chelsea of Red Lodge Reservations, would mention later in the meeting that their business has been managing STRs in Red Lodge for over 35 years). He stated, “I think it’s been visited. I think the studies are there. I think it just has to be decided now.” The footage of the public comments portion of the meeting is below:
The public hearing on STRs opened with Jenn Capp, owner/operator of AAA Rentals and member of the disbanded STR committee. She recounted asking a member of the Planning Board before that night’s meeting “how this could impact STRs. That person answered the question incorrectly. I think that indicates some confusion within our planning, thus confusion pushing this forward to City Council.” She went on to state, “And we will suffer as a business, thus reducing the professional management style that many of you have claimed to support all along.” She also presented that, “There is also data out there. It’s very strong data right now, and it’s growing, that communities that offer short term rentals see increased tourism, and increased numbers of visitors.” Capp and others cited evidence that a robust tourism economy is currently dependent on STRs. Capp objected to the proposed zoning change on private property rights grounds and reiterated Toupin’s earlier request that Council table this issue.
Marcella Manuel, a realtor with an office in Red Lodge who was actively involved in the STR process that developed the STR ordinance, asked Council to give that recently passed ordinance a chance before rushing to pass a new restrictive zoning chart “because these allowed uses are not, they’re not in the best interest of the community.” She also pointed out that Red Lodge doesn’t have the number of lodging units it had 20 years ago because of closures and conversions. She ended with, “We don’t have the capacity for the tourists if we don’t have short term rentals.”
Tony Toupin pointed out that “Just a few moments ago, we heard the Council speaking about only being able to give our police officers a raise of $1.50. A few moments later, we’re talking about cutting out the two legs of the table that would be able to support additional tax income or resort tax that generates over $2 million for our community.” He stated it would put him out of business leaving his six employees to find other jobs. He detailed the years of hard work it took for him to earn the funds to buy the business he now fears he will lose if this zoning map is put into effect. Chelsea Toupin followed up asking the Council to “focus on what this impact will have on us economically, and what that impact will have on your constituents and their property rights.”
Conlee finished the public comment portion of the hearing by pointing out that she has tried for years to get the City to do something about workforce housing. “So now, here you are talking about restricting short term rentals, when it (tourism) is our only economic base. I understand that the property managers are like, ‘Oh, my God, this is my business.’ But, oh, my God, this is our town! Be responsible. That’s all. I just don’t know why you guys are doing this.”
Courtney Long, Red Lodge City Planner, and Jenn Battles, councilmember, explained that amending the zoning ordinance with the allowed use table was a directive of the Short Term Rental Committee. They both acknowledged that there is confusion over terminology and purpose.
As pointed out by Councilmember Jody Ronning, the zoning as proposed would push all of the STRs out of the highest value property areas and into the lowest, putting further pressure on affordable long-term rentals for local workers as well as parking. Her larger issue is the the effect on the property owners within the Urban Renewal District (URD). She pointed out that “When that was passed, we assured people that by forming this URD, we would not be impeding their private property rights or changing the use of their property or affecting their future use of their property unless they used URD funds. And by doing this, we are going against what we said we would do when we passed the URD.”
Contacted after the meeting, Ronning clarified some aspects of the change. She stated that the ban on STRs affects the entire URD. In zones R3, R4, C3N, C3S and C4, Short Term Rentals become an accessory use only which means the homeowner needs to live in the unit 42 days a year. Only areas zoned R1 and R2 would allow STRs as a primary use. Ronning does not see how the 42 day rule can be enforced. The change will eliminate investment property opportunities in the restricted areas. Properties on Broadway, Haggin, parts of Hauser, and properties at the Golf Course and The Island at Rock Creek condos would all be affected by the change. Most of the new construction is occurring in the areas zoned R3 and R4. “This construction provides the higher paying non-tourist industry jobs the mayor has repeatedly championed when proposing developing the airport property. This construction and the jobs it brings will likely slow, if not stop altogether, if this change is allowed to go through.”
Courtney Long, Red Lodge City Planner, raised some eyebrows when, in the midst of describing how zoning limitations and the 42 day rule would be enforced, she revealed that one goal of the group designing the zoning strategy is to discourage investment buyers and non-locals from purchasing properties in the City (video footage below). Councilmember Terri Durbin didn’t understand, when the City’s current STR inventory is at 10%, the cap is 20% and it has been testified to that STRs aren’t a problem until they reach 25%, why the City is trying to solve a problem that doesn’t exist. “But to proactively start coming up with solutions to a problem that doesn't exist and start deciding who's, you know, whether they're out of state or whether they're local, who you're going to approve buying income property to me is discrimination. And I just, I can't buy into that.”
Battles moved to table the issue so she can do some follow up to make sure the Planning Board knows what they put forward and to ask the committee that developed the use table to write up a summary that addresses the concerns raised. The motion was carried unanimously.
City Planning is the planning and control of the construction, growth, and physical development of a town or other urban area.
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Complete footage of the October 24 Red Lodge City Council meeting Public Hearing and Council discussion of short terms rentals is below: