SANDPOINT — The City Council approved an overhaul to the short-term rental code in a reluctant 4-2 vote on Wednesday evening.

The changes to the STR code would remove the citywide 35-unit cap on non-owner occupied STRs in residential zones in addition to increasing regulations around parking and occupancy. Councilors Joel Aispuro, Joe Tate, Joshua Torrez and Deb Ruehle voted in favor of the amendments but said they did not want to make the changes. 

Planning and Community Development Director Jason Welker said the city is removing the cap to bring its ordinance in-line with state law and the Idaho Supreme Court’s ruling in the case of Idaho Association of Realtors v. City of Lava Hot Springs. Welker and Mayor Jeremy Grimm have said previously that their code opens them up to costly litigation, however as of Jan. 21 Grimm said no lawsuits against the city have been filed. 

Dissenting councilors Pam Duquette and Kyle Schreiber said they wanted the city to make a stand and not cave to potential litigation. Both said they don't view the 35-cap as a prohibition because a prohibition means to have none, and the city allows some STRs. 

“My view on this is that allowing 35 of something is not a prohibition,” Schreiber said. “If I limit myself to 35 beers, am I as sober as if I have none? So, I'm not inclined to blatantly violate our comp plan based on rumors and when our ordinance has yet to be challenged.” 

The city’s legal counsel, Fonda Jovick and Zachary Jones, have repeatedly said the city’s current code is out of line with the Supreme Court’s ruling. Jovick said as soon as an applicant is denied based on the cap, they have been prohibited from operating a STR and could bring a case against the city. 

Grimm said a potential lawsuit that escalated to the Idaho Supreme Court could cost the city $100,000 just to defend the ordinance. When voting in favor, Ruehle said she feels her primary responsibility to the public is fiduciary. 

“I would love to dig my feet in and take a stand, because I'm an individual who will skin up mountains forever and I dig my feet in and I want to fight never fall,” Ruehle said. “But again, I'm not willing to spend your taxpayer dollars on this.” 

The amended ordinance also creates a new STR permit type for high occupancy STRs, or rentals advertised to house 11 or more people. Those STRs will need to acquire the HSTR permit which follows a similar process as a conditional use permit. 

In addition to the council’s decision, Welker also gave a preview of upcoming state legislation that would eliminate cities’ ability to regulate STRs at all. Welker said STR software companies like Airbnb are using Idaho as a testing ground to push for complete deregulation. 

“I've been in the room. I won't name the legislator, but this is how the conversation went. ‘The real estate lobby is super supportive of my campaigns. I'm sure you can work together to find an agreeable solution,’” Grimm said. “Basically, it was insinuated they're good to that legislator.” 

All of the public comments shared at the meeting opposed the changes, and some residents continued to urge the city to take on litigation to fight back. Grimm encouraged those speaking to reach out to their local representatives at the state level, because they will have more power over the incoming changes. 

“I don't know any council members here that want short term rentals to go the way that they want in Boise,” Aispuro said. “We're not going to make the change up here... but I am in support of the motion, because it comes down to what we can do to protect our city.”