Flathead, Gallatin counties host majority of short-term rental units, report finds

Significant increases in short-term rental properties may be adding pressure to local housing supplies, especially in high-value tourism areas of the state near Yellowstone and Glacier national parks.

That’s according to a report by the University of Montana’s Institute for Tourism and Recreation Research published this month on the State of Short-Term Rentals, which looked at the growth of short-term rentals and how local communities are responding with regulatory strategies. 

“Short‑term rentals in Montana present a complex situation shaped by many factors, with tourism representing only one piece of a much larger puzzle. Short-term rentals account for less than 3% of Montana’s total housing stock statewide, but during peak summer months, they can comprise up to 11% in gateway communities near national parks,” ITRR Director Melissa Weddell said in a press release. “Their influence on the housing market is highly uneven, with impacts localized and concentrated in a small number of tourism-driven counties.”

The study period spanned 2019 to 2023, during which the number of short-term rentals listed in Montana shot up 55%, heavily concentrated in Gallatin and Flathead counties. The rise also corresponds with record increases in outdoor tourism activity in Montana, similarly concentrated in the two counties. 

Although these properties are only one factor affecting housing availability in the state, they’re having an outsized impact on counties that are already the most expensive in the state.

Of the 12,808 short-term rentals listed on sites like AirBnB and VRBO in Montana, nearly half of them are located in Gallatin and Flathead counties. 

Demand for rentals are often seasonal, peaking in the summer months, and during the summer of 2023, Flathead County led the state with nearly 4,000 listed rentals. 

Bookings follow a highly seasonal pattern, with Flathead and Gallatin Counties reaching peaks of 70,000 and 50,000 monthly bookings in recent summers — with peak Flathead bookings in 2023 nearly doubling 2018 levels. 

“These findings suggest that STR impacts on the housing stock are much more localized than statewide,” the report concludes. 

Statewide, the study found that short-term rentals comprise 2.4% of total housing stock, on average, rising to 2.8% during peak tourist months. 

But that number differs drastically by county. 

In Flathead County, data shows short-term rentals comprise 6% of housing stock on average, and nearly 7.5% during peak months. 

Gallatin County, a more balanced seasonal destination with both summer and winter peaks, rises from 5.05% to 5.19% during peak months, while Lake County jumps from 4.2% to 5.45%. 

But the biggest standout is in Park County, due to its proximity to Yellowstone National park, where in September 2023, short-term rentals accounted for 11.5% of total housing stock, with just over 1,100 rental properties. 

To gain a better understanding of how short-term rentals might be impacting the housing market, ITRR researchers narrowed their analysis to short-term rentals that resemble traditional housing — entire homes or apartments as opposed to unique spaces such as barns or tents. 

Using those metrics, Gallatin and Flathead counties still remain at the top of the short-term rental list, with 2,337 and 1,988 rental listings, respectively.

Park County again stands out under the filtered data, with short-term rentals accounting for 6.2% of housing stock at peak months, while Flathead and Gallatin counties drop to 4.5% and 3.9% respectively.  

The study notes that additional structural factors, such as rising construction costs and shortages, and limited land availability also contribute to housing shortages.  

ITRR highlighted three major contributing factors that have affected the tourism and the housing market since 2019 — and boosted demand for short-term rentals: the COVID-19 pandemic, Montana’s nearly 5% population growth, and amenity migration, as individuals involved in remote work relocated to outdoor lifestyle hotspots in the state. 

The report, which is a followup to a 2020 short-term rental study, interviewed local officials from 11 Montana communities on their perspectives of the benefits and challenges of short-term rentals and housing concerns. 

“Officials acknowledge that while (short-term rentals) support Montana’s economy and tourism and provide flexible housing options for temporary workers, they also present potential challenges for neighborhoods and housing affordability,” according to the study. “Many stress that (short-term rentals) are just one factor in the broader housing landscape and call for balanced, locally tailored monitoring and regulation.”

Tourism-focused communities were found to have adopted more comprehensive regulatory systems for rental units, according to the study, including requiring special-use or conditional-use permits, annual renewals, and “Good Neighbor” policies in newer developments that steer rental use. 

“Short-term rental policies are one of several tools communities can use to address housing pressures,” Weddell said. “While implementation requires resources and impacts vary by location, these local policy options give Montana communities greater control in shaping solutions that fit their unique housing and economic needs.”

The study notes that there remains a “lack of comprehensive data” directly linking short-term rentals to displacement of residents or affordability issues in Montana communities. 

“Short-term rentals represent one piece of a complex housing puzzle,” the study concludes. “While they contribute to local challenges, their role is often secondary to broader economic and structural factors. Each community must take a data-driven, context-specific approach that balances housing affordability with economic opportunity. Effective housing strategies will depend on continuous monitoring, adaptable regulation, and sustained community engagement, ensuring that both residents and local economies can thrive in Montana’s evolving housing landscape.”