Vacation Rental

A vacation rental is advertised in this Chronicle file photo from 2017.

A few years after Marilee Brown bought her Bozeman home, she realized the math wasn’t going to work out to afford to keep the property. So she began renting her house during peak tourist seasons.

“Short-term rentals have taken a bad rep for taking affordability out of town, but it helped me be able to keep my house,” Brown said, who began operating her short-term rental in 2017.

At the time, city staff estimated there were as many as 500 Airbnb-like rentals in Bozeman as they worked to create rules for the growing market, which went largely unregulated.

Two years into Bozeman’s new regulations, there are 106 homes registered in the city’s short-term rental program.

“That’s a big number, that’s a good number,” Assistant City Manager Chuck Winn told Bozeman commissioners as he gave an update on the program this week. “We know that we still have more work to do.”

Winn said there are as many as 57 rentals operating outside the bounds of Bozeman’s regulations.

“The big effort we’re making right now is to get those 57 properties…we want to engage those owners or managers of those properties and get them registered voluntarily,” Winn said.

Bozeman’s short-term rental program went in place in December, 2017, and defined short-term as anything less than 30 days.

At the time, Airbnb listed 360 short-term rentals in Bozeman while some websites showed closer to 140 rentals.

Winn said identifying the actually number has been a focus this first year.

“‘In Bozeman’ can mean a lot of things to people. We were finding out there were short-term rentals on the Gallatin River in Bozeman listings,” he said.

Winn said the program’s biggest boost came this August when Bozeman hired a code compliance program manager.

Out of the existing registered rentals, 34 went through the city’s program after that position came on board.

City leaders who adopted the rules said it largely came down to safety. Homes that make it through the program go through a fire inspection and obtain a health certificate.

Not everyone makes it.

Of the 169 short-term rental inspections the city made in 2018, 82 were approved. Winn said some people back out after figuring out the cost to bring their home up to code.

The annual $250 fee to operate a short-term rental hasn’t changed since it went in place. Winn said that’s covered the program’s cost.

In its first full year, the city collected more than $37,570 from the fee. In the 2019 budget year, the program brought in $21,700.

Winn said that drop is because some people realize renting doesn’t bring in as much money as expected.

“Or they might take a year off because people’s lives and circumstances change,” he said.

For Brown, converting her primary house into a short-term rental when she leaves town in the summers has been worth it.

Brown said the city’s program created a clear path to operate a rental instead of sorting through state and federal laws that felt murky.

The process hasn’t always been simple. Brown said the city’s software has been confusing sometimes or didn’t work well when she tried to renew her registration. City staff have said they hope a software update this week changes that.

Brown said she could see one day moving out of town and renting her home to college students through the school year and vacationers in the summer. City rules don’t let people join the program unless they live in the home at some point in the year, unless they’re grandfathered in.

But for now, it’s doing what she hoped for.

“I’ve been able to make just enough to cover taxes, utilities and upkeep of the home. So the house is basically paying for itself,” Brown said.

Katheryn Houghton can be reached at khoughton@dailychronicle.com or at 582-2628.

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