Kalispell allows short-term rentals, with conditions

The Kalispell City Council on Monday passed a new set of regulations to allow short-term vacation rentals within city limits. But the final ordinance passed came with a last-minute amendment that could narrow the number of rentals for owners. 

In its 10th month on the city’s agenda, the ordinance allowing short-term rentals in Kalispell finally passed on a 4-3 vote, with council members Tim Kluenser and Kari Gabriel absent from Monday’s meeting.

Considering the regulations discussed at a work session two weeks ago, council member Chad Graham suggested an ordinance requiring short-term rentals to be the owner’s primary residence. The amendment aimed to keep residential areas from being commercialized by companies hoping to replace real estate with rentals.

“I think that when we first started talking about this issue it started out much smaller,” Graham said. “I can see a lot of potential commercialization into neighborhoods where people have lived for decades.”

Council member Jim Atkinson expressed his support for the amendment, adding the need to maintain the fabric of the community.

“I think that (short-term rentals are) a good new thing that’s happening,” he said. “It helps people to get to know our community more than a motel does. I do not like to see it commercialized. For that reason I encourage the council to vote for this amendment.”

Mayor Mark Johnson said he disagreed with the amendment because it wouldn’t bring a number of short-term rental owners, all of which who currently operating illegally in residential areas, into the legal threshold.

“Right now we have people in a non-compliant use. We’re looking at an ordinance that will still have people in non-compliant use,” he said. “We’re looking at having that kind of economic impact on this.”

After discussion, the amendment passed on a 5-2 vote, with Johnson and council member Sandy Carlson voting against.

Council member Phil Guiffrida amended Graham’s amendment, striking apartments and residential business areas from the primary ownership rule. The amendment also passed on a 5-2 vote.

“I think it’s conceivable to have short-term rentals in there,” Guiffrida said. “It also opens it up a little bit more.”

Still, with the first reading of the ordinance passed, short-term rental owner Scott Lester said the primary ownership rule could shut down a majority of the rentals currently in place.

“The last-minute amendment to the draft and two of the council members not being here was a game changer for a lot of vacation rental owners,” Lester said.

Lester and his wife Megan have been consistent proponents of short-term rentals throughout the 10 months of discussion at City Hall. Lester said he knows a lot of the other short-term rental owners in Kalispell and, while the primary ownership rule won’t affect his rental, he believes the measure would shut down three-quarters of the rentals currently operating in the city. He said the owner-occupied model is far less common in Kalispell’s market.

“Keep in mind, the 30 or 40 that are around right now, these are the ones that haven’t been shut down because there were not complaints about them,” he said.

Lester argued that the short-term rental market is essentially self-regulating. He said noise complaints made by neighbors have successfully shut down the rentals known to cause problems, while poorly maintained rentals often fail because of user reviews.

“[The city council] had a version that they all seemed to agree upon in the last meeting ... and then there’s this major amendment introduced that totally changes it.”

In addition to Graham and Guiffrida’s amendments, the council also added a measure requiring short-term rental applicants to check with their appropriate homeowners association to determine if short-term rentals are allowed by the neighborhood covenant.

Reporter Seaborn Larson may be reached at 758-4441 or by email at slarson@dailyinterlake.com.