Sioux Falls and Rapid City consider new licensing fees for rental properties

The Mobridge City Council meeting on January 8, 2025, focused on the regulation of short-term rentals and the varying approaches taken by other cities in South Dakota. Council members discussed the licensing fees and inspection requirements for short-term rentals in several municipalities, highlighting the need for a structured ordinance in Mobridge.

During the meeting, it was noted that Sioux Falls charges a one-time fee for the first annual license, with subsequent inspections conducted by the Department of Health. In contrast, Brookings has a standard rental ordinance with a fee of $108 every four years, while Belle Fourche currently has no regulations in place. Deadwood's approach includes a base fee of $250, plus an additional $100 for each bedroom, with annual licensing and an initial health inspection requirement.

Other cities, such as Hot Springs and Winter, are still in discussions regarding their regulations, with no formal ordinances established yet. Aberdeen combines short-term and long-term rental regulations, similar to Sioux Falls. Spearfish has formed a task force to draft an ordinance, but progress has been slow due to resistance among council members. Rapid City is also in the process of developing an ordinance, with proposed fees ranging from $150 to $250 per year.

The council members expressed concern over recent legislation that limits municipalities' ability to regulate short-term rentals, which could impact local housing markets. An article from the Argus Leader highlighted that Hill City experienced a rise in new single-family homes while simultaneously seeing a decline in owner-occupied homes, raising concerns about the long-term effects on community stability.

The discussions at the meeting underscored the importance of establishing clear regulations for short-term rentals in Mobridge to address potential challenges in housing and community dynamics. The council plans to continue exploring options for creating a comprehensive ordinance that aligns with the needs of the city.