Idaho city removes short-term rental cap ahead of possible legal challenge

US: The city council of Sandpoint, Idaho, voted on Jan 21 to remove the 35-rental cap on non-owner-occupied STRs in residential areas to avoid a potential legal battle.

The decision came after both the state supreme court and federal district courts have seen cases in the past year end in confusion as to how municipalities can, if at all, regulate STRs.

City attorney Fonda Jovick said that the adjustment undertaken by the council is to adopt a “legally defensible” policy.

While there is now no limit on the number of non-owner-occupied STRs, the motion also creates a high-occupancy category with distinct permitting requirements and conditions for local management service.

The council also voted to relieve density requirements within city limits, raising concerns among council members that together, the new regulations could allow a disproportionate amount of non-owner-occupied STRs in new developments.

Despite the measure’s passing, both the public in attendance and councillors were largely against allowing more non-owner-occupied STRs in Sandpoint. However, the prevailing attitude was to firm up the legal ground which the city stands on, rather than risk engagement in a costly legal battle.

“I am not pleased this item is before us tonight,” Sandpoint mayor Jeremy Grimm said. “The salient point here is there’s an intense lobbying effort to preempt local control and take the ability to manage and regulate short-term rentals out of our hands, which I totally disagree with.”

Highlights:

• The Sandpoint city council eliminated its cap on non-owner-occupied short-term rentals to preempt a costly legal challenge, aiming for a legally defensible policy.
• City officials acted amid confusion from recent state and federal court rulings on how municipalities can regulate short-term rentals.
• Despite broad public and council opposition to expanding STRs, the prevailing priority was to avoid spending taxpayer money on a lawsuit.