The alleged proliferation of short-term vacation rentals in Missoula has gained the attention of the Missoula City Council, but without hard data on the number of rentals, where they’re located and how many operators actually pay the city’s licensing fee, it’s unable to address the issue.
On Wednesday, members of the council expressed support to include $23,000 in the FY22 budget to hire a vendor to track short-term vacation rentals in Missoula.
While that one-time fee would come from taxpayers this year, the rental owners would eventually cover the cost as the city gets a handle on how widespread the businesses actually are.
“The cost pays for a vendor to provide ongoing services to the city. Those services are to provide us real data about the number of short-term rentals being advertised in our city,” said council member Julie Merritt. “They don’t just report what’s on the VRBO sites, they actually pay people to look into them.”
Merritt said some short-term rentals advertised on the many websites that promote the businesses don’t include a specific address for the listed property. The vendor would research the address to ensure it’s honest, and it would also help the city determine if the owners of advertised properties are paying the registration fee and meeting other city requirements.
“Our ordinance says people are required to register short-term rentals, and we have very low compliance on that ordinance,” Merritt said. “I think it’s important for us to have that information if we’re going to consider making any changes to our ordinance. If we’re going to take any action, it needs to be data driven, not just anecdotal evidence.”
Anecdotally, many Missoulians believe short-term rentals are eating up what otherwise could serve as housing to those who live and work in the city. Like many cities in Montana, Missoula is facing a housing shortage that has, in part, contributed to an increase in prices.
A vendor could also determine what sort of costs customers are paying for short-term rentals in Missoula. That would enable the city to “determine what an appropriate registration fee would be for us, if we determined we wanted to increase fees,” Merritt said.
While the council expressed support for hiring a vendor at $23,000, some also acknowledged the potential pitfalls of cracking down on what’s considered a business. The properties are privately owned and, as a result, come with property rights. Some also use one home as a short-term rental to pay the mortgage on the home in which they live.
“There are many people in the community who have a short-term rental and use that as a tool to pay their mortgage and be able to retain their home,” said council member Mirtha Becerra. “It’s a delicate balance. We need to know what we’re dealing with here so we can tweak our ordinance if we have to, or understand how big of an impact it’s having on our housing inventory.”
The city four years ago set a foundation for dealing with properties listed on Airbnb and Vrbo. Among other things, it required that owners register the property with the city and have the property inspected for safety.
On Thursday, Airbnb had around 300 properties listed as available in Missoula with fees ranging from $60 to $120 or more per night. It suggested that “more than 35,000 guests have stayed in Missoula.” Those guests spend money at local businesses as any tourist does while visiting.
“We don’t really even know in total what types of houses are being used in this manner, and having that information could provide us a road map if we wanted to do something more stringent with our ordinance,” said Merritt. “If the data shows us it’s having a big impact on workforce housing or low income housing, then I think it points us in that directing of changing the ordinance. Until we have the information, we don’t know what direction to go in.”
Administration officials with the city said that while the data could be valuable, actions open to the city remain unanswered, including regulatory tools allowed by the state. But those questions could be answered once the data is secured, council members said in supporting the $23,000 vendor fee.
“These (short-term rentals) should be paying for this service. I have a very hard time pulling tax dollars out of people’s pockets, putting them in the general fund, then paying so we can monitor people’s business enterprise,” said council member Gwen Jones. “It’s a commercial enterprise in a residential district. We need to make them work in our community, and we do have housing issues.”