SANDPOINT — Planning and Zoning commissioners will review a complete overhaul of the city’s code that governs short-term rental properties at its Tuesday meeting.

The city’s current ordinance has several restrictions, which Mayor Jeremy Grimm said opens the city up to potential litigation. At the Nov. 5 City Council meeting, Grimm said several organizations warned they were already teeing up lawsuits against Sandpoint, hence the need to amend the ordinance.  

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 citywide cap in residential zones that is in place. Grimm said that no lawsuits were ever filed against the city and that the amendment is a preemptive move. 

“We are going to remove that restriction and it’s not out of a desire, it’s out of practicality and cost,” Grimm said. “[STRs] will become available for any speculator or investor who wants to buy and house and convert it from a place that a community member lives to one a visitor can visit.” 

In his staff report, Planning and Community Development director Jason Welker referenced two Idaho court cases which have reshaped the power cities have to regulate STRs. The key ruling came in Idaho Association of Realtors v. City of Lava Hot Springs, where the Idaho Supreme Court ruled that the city’s ban on STRs in residential zones was unlawful in violation of the state law 67-6539 or Short-term Rental and Vacation Rental Act. 

Welker said the ruling states that cities cannot limit or ban STRs from their communities, but that a district court ruling in Scott v. City of McCall states that cities can take other avenues to preserve the character of neighborhoods. 

"What we are doing here is what is absolutely necessary,” Welker said. “We are bringing our code into compliance with state law. It's state law that puts handcuffs on the city’s ability to regulate STRs.” 

The amendments to the ordinance include removing the citywide cap of STRs in Sandpoint but maintaining a limit of the amount of STRs to one per parcel. Another significant change is the separation of STRs based on occupancy, with any building meant for 12 or more people now needing a conditional use permit in residential zones before proceeding. 

Owners of STRs that would fall under the new high-occupancy limit will have to go through a public hearing during a P&Z Commission meeting for their CUP.  

In addition to the new occupancy standards, the city is increasing parking requirements to a minimum of two off-street parking spaces for each STR. The ordinance also would require STRs to have a local representative who lives within 20 miles of Sandpoint city limits. 

“I would say we are increasing regulation of STRs when it comes to protecting the integrity of residential neighborhoods,” Welker said. “That cap of 35 is literally only one line in our existing ordinance and the rest of our regulations are around protecting neighborhoods.” 

Currently, Sandpoint collects revenue from owners of STRs as part of its 14% lodging tax revenue. Welker said the revenue and maintaining the city's makeup are the reasons the city regulates STRs. 

At the Nov. 5 meeting, Welker said he believes there will be a push from lobbying groups within the Idaho Legislature to strip cities of all rights to regulate STRs. Grimm said these groups have been trying to deregulate fully for years, most recently with Idaho Senate Bill 1162. 

That bill was shot down in the Idaho Senate 11-23 with District 1 Sen. Jim Woodward, R-Sagle, among the senators who voted against the bill. 

"There is a strong, well-funded effort to completely strip us of our ability to regulate STRs in this legislative session,” Welker said. “Talk to Mark Sauter, Jim Woodward and Cornel Rasor, they’re the ones who are going to be able to stop this reckless effort to take local control away.” 

Welker said if the lobby groups are successful, STRs would be treated like normal housing and explode in population. Grimm said he was extremely disappointed by the Idaho’s Supreme Court’s decision and feels that STRs are inappropriate for residential zones. 

At their meeting on Tuesday, the commissioners will have the opportunity to make modifications, approve or table the amendment. That meeting will be held at 5:30 p.m. on Tuesday, Nov. 18 at City Hall.