SANDPOINT — The Planning and Zoning Commission will hear public comment on proposed changes to the city’s short-term rental and lot coverage codes at its meeting Tuesday.

The commission previously tabled a decision on an overhaul of the city’s short-term rental code. The most significant proposed change would be the removal of the city’s cap of 35 non-owner occupied STRs in residential zones, Planning and Community Development director Jason Welker said the city is bringing these changes to avoid potential litigation. 

Welker is referencing a decision by the Idaho Supreme Court in the case of the Idaho Association of Realtors v. City of Lava Hot Springs, in which the court ruled cities could regulate, but not prohibit STRs in city limits.  

"Clearly, the 35 units disallows or practically prohibits short-term rentals within the city,” Zachary Jones, the city’s legal counsel, said at P&Z’s Nov. 18 meeting. “That one in and of itself is a prohibition because it prohibits anything more than 35 units within the city and I think it would be a difficult one to defend.”  

At the City Council’s Nov. 5 meeting, Mayor Jeremy Grimm said several organizations were “teeing up” lawsuits against the city. In a statement sent to the Daily Bee in August, the Idaho Vacation Rental Association said it was evaluating legal action against Sandpoint due to the 35-unit cap. 

Grimm said later in November that no lawsuits were ever filed against the city and that the amendment is a preemptive move.   

In addition to the removal of the cap, the code would also separate STRs into two groups, low and high occupancy. An STR that is high occupancy, 11 or more people, in a residential zone must apply for a conditional use permit, under the amended code. 

The city would also be increasing the parking requirement for STRs, requiring two off-street spaces for rentals that advertise accommodating six or more people. Welker said he believes that Sandpoint’s current STR code is the strictest in Idaho, and that would not change with the amendments. 

"Ours is currently the most restrictive, but also unlawful,” Welker said at the Nov. 18 meeting. “We are bringing it into compliance with state law, and we will remain the model for other cities on how to regulate STRs for the benefit of residential character.”  

Following the public hearing on the STR code, the commission will open a public hearing on the expansion of lot coverage standards in residential zones. The change would allow 70% of a lot to be covered by building footprint, except in the case of two-story structures in residential single-family zoned lots. 

Those structures would only be able to take up 35% of the lot size, which is the current standard. Sandpoint City Planner Bill Dean said change would increase density by allowing property owners to expand their homes with more rooms or an accessory dwelling unit.   

“The idea behind this proposed amendment was to let property owners do what they want with their property,” Welker said at the Nov. 18 meeting. "More living space per square foot in Sandpoint infill density, this is going to be what ultimately promotes affordability in this town.”   

The city is also bringing further changes in an effort to increase the density of housing in the city, Welker said. These include decreasing the minimum lot size in residential multi-family zones from 5,000 square feet to 3,500 square feet, to bring them more in line with Sandpoint’s original lot sizes. 

In addition to that change, the minimum for common wall townhouse lots in RM zones would decrease by 1,000 square feet to 2,500 square feet. The city would also increase allowed density by one unit at each lot size range in RM zones. 

“You think about who plotted Sandpoint originally. These were the mill owners in town that needed housing for their workers,” Welker said. “Sandpoint’s original subdivisions were plotted for local workers ... here we are today struggling to find place for local workers to live.”  

Welker said he hopes the commissioners will make a decision whether to recommend the changes to City Council on Tuesday. The P&Z commission meeting will be held Tuesday at 5:30 p.m. at Sandpoint City Hall.