Spokane Journal of Business

VRB-WHOA!: Cd’A leaders attempt to rein in short-term rentals

Property owners organize to defend against aspersions

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-—Keith Erickson
Roosevelt Inn owner Tina Hough stands in front of the historic bed-and-breakfast inn at 105 E. Wallace Ave. in downtown Coeur d’Alene. Hough has been an outspoken critic of short-term rental growth.

Escalating concerns surrounding short-term rentals, such as those offered through online vacation rental marketplaces Vrbo and Airbnb Inc., have prompted the Coeur d’Alene City Council to consider code changes to better regulate the industry, says City Clerk Renata McLeod.

That includes making a push to get all such rentals with a special short-term rental permit, so the city can track the short-term rental inventory better.

McLeod says the city is aware of 883 short-term rentals in Coeur d’Alene, and about 650 of them are licensed. The city defines short-term rental as a residential dwelling that is rented for 30 days or fewer. It does not include bed-and-breakfast inns, RV parks, campgrounds, hotels, or motels.

Meantime, homeowners across the city increasingly have been voicing frustration over short-term rentals, McLeod says. Since the city began considering short-term permit code changes last August, it has received 163 written comments from residents concerned about such vacation rentals—including complaints about noise, parking problems, and littering.

“We have posted all comments on the city’s website and will continue to do so as received,” McLeod says.  

In hopes of increasing compliance and reducing neighborhood conflicts, the city has hired Denver-based civic software company Granicus to collect data on the short-term rental market and engage the public in the issue.

“We want to bring the neighborhoods and short-term rental folks together to find a happy medium,” McLeod says. 

Coeur d’Alene bed-and-breakfast owner Tina Hough says unfair competition from a rapidly rising number of short-term rentals in North Idaho is threatening the livelihood of her industry. The numbers, she says, prove her point.

Hough, owner of the historic Roosevelt Inn, at 105 E. Wallace in downtown Coeur d’Alene, says 22 bed-and-breakfast inns operated in Idaho’s five northern counties in 2009. Today, she says, nine such inns are in business. Hough says she has fought for years to level the playing field in the highly competitive lodging market in which short-term rentals aren’t regulated adequately, giving them an unfair advantage.

“There is no oversight on the number of people that can occupy (short-term rentals),” Hough says. “They have no stipulations at all. So right away, I’m at a disadvantage.”

Hough says property owners who opt to rent their homes without securing proper licensing through the city bypass the state-mandated 2% bed tax and 6% sales tax that licensed short-term rentals and bed-and-breakfast inns pay.

“The state is literally losing hundreds of thousands of dollars in tax revenue because it’s not being collected” from noncompliant short-term rentals, she says.

Coeur d’Alene City Councilman Dan Gookin says stricter regulations and oversight are needed to address short-term rental complaints.

“In some parts of town, a majority of the homes on a block are short-term rentals,” Gookin says. “Effectively, they create a hotel district, where our residents no longer have neighbors.”

Gookin says his concern is that short-term rentals essentially are commercial operations in residential zones.

“They increase traffic, noise, and reduce the feeling of living in a neighborhood,” says Gookin, who lives in the Fort Grounds neighborhood near North Idaho College.

“I have six on my street, which is almost 30% of the homes,” he says. “Another one is coming this summer. Kids don’t trick-or-treat here anymore because the street is packed with transient people who aren’t part of the community.”

Melissa Radford, of CDA Vacation Rental Alliance, contends, however, that concerns over short-term rentals are mostly unfounded, and the vacation rental industry is being unfairly singled out.

Short-term rental options are critical for a community like Coeur d’Alene that relies so heavily on tourism, says Radford. She and her husband, Jeremy, founded CDA Vacation Rental Alliance last year to advocate for owners of short-term rentals in response to the city’s plans to crack down on them. Radford says the group has 501 members.

“Rapid population growth in North Idaho has led to growing pains experienced by long-term residents in the area. It is understandable that a scapegoat would be sought,” Radford says. “Those advocating for new rules have presented no proof of threats from short-term rentals  ... only anecdotal stories and vague blame for the housing crisis.”

McLeod says annual short-term rental license renewals are due every March 1, however, explosive growth in the vacation rental industry has made licensing and oversight a challenge.

According to city data, there were 160 licensed short-term housing units in Coeur d’Alene in the 2018-19 licensing period. The following year, that number grew to 206. Licenses dipped to 196 in 2020-21 then grew to 294 in 2021-22 before spiking to 650 during the current licensing period.

Under a $38,000 contract with the city, Granicus will provide comprehensive data on short-term rentals with a goal of addressing community concerns and achieving better licensing compliance.

“When our findings are combined with city data, staff can have a holistic view of the short-term rental market and compliance with local regulations,” says Graeme Dempster, director of host compliance sales for Granicus.

“Coeur d’Alene can utilize our data to perform outreach to short-term rental operators, ensuring a level playing field for all types of lodging providers, and improve compliance to reduce any negative impacts on the community,” Dempster says.

Information gathered by Granicus will be shared with stakeholders later this year, McLeod says. This includes short-term rental operators, bed and breakfast owners, concerned neighbors “and all other interested parties.”

“(Granicus) will share what they learned and make a proposal to the Council on how best to proceed,” McLeod says. “I’m hopeful the city will have all the information to adopt a plan by March 2024.”

Any changes to the short-term rental ordinance wouldn’t take effect until then. McLeod says the city is considering increasing the annual renewal fee for short-term rentals to $180. The current renewal fee is $84. The first-year licensing fee would remain at $284.

She noted that there is an exemption to the short-term rental code for those renting fewer than 14 days in a calendar year.

Radford contends vacation rentals in Coeur d’Alene contribute significantly to the local economy, and she claims CDA Vacation Rental Alliance members pay their fair share.

“We are contributing equally to the taxes collected by hotels and other lodging operations in the state,” she says. “Short-term rentals are not in competition with other lodging operators; we are simply a vital section of the overall lodging options available to guests.”

Radford also contends short-term rentals support hundreds of local jobs.

Citing an economic analysis released earlier this year by the Idaho Department of Commerce, Radford notes that spending by Idaho visitors who stayed in short-term vacation rentals grew to $685 million in 2021 from $502 million in 2020, an increase of over 36%.

She disputes concerns like those raised by Councilman Gookin.

“There have been anecdotal stories that create the illusion of significant impacts to the community from short-term rental guests,” she says. “We have facts. We obtained a list of noise/disturbance complaints to the Coeur d’Alene Police Department from May of 2020 to August 2022 as well as a list of the permitted short-term rental properties in Coeur d’Alene. Out of 1,122 total complaints, only 14 were associated with legally permitted vacation rentals.”

At the Roosevelt Inn, which was built in 1905 and first served as a schoolhouse, Hough remains unimpressed by the short-term rental operators’ pushback.

“(Short-term rentals) are definitely having an impact,” she says. “We can’t compete with (unlicensed) short-term rentals.”

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