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Long hearing on SB 336: sponsor seeks to classify short-term rentals as residential; industry and local governments oppose
Summary
Senate Bill 336 would classify short-term rentals as a residential use of property rather than commercial. Supporters said the change protects property owners who rely on rental income; municipal officials, hoteliers and housing advocates warned it would undercut local zoning and exacerbate housing shortages.
Senate Bill 336, sponsored by Sen. Greg Hertz, drew one of the longest hearings before the Senate Local Government Committee. The bill would declare that a short-term rental (STR) is a residential use of property and would limit how local governments and covenanted communities can regulate such rentals in certain circumstances.
Supporters — a mix of Montana homeowners, tourism-industry workers, property managers and advocacy groups — said classifying STRs as residential preserves a property right that many Montanans rely on to afford housing and pay property taxes. Witnesses described individual stories: homeowners who rent portions of their residences to cover mortgage and tax bills; guests who used STRs while caring for ill family members; and managers who said STR properties often pay the same state lodging taxes as hotels. Proponents included Stephanie Baucus (attorney), Wendy and Albert Dixon (properties owners), Cindy Morrison, Blaine Konkel, Allison Conkle, Tara Ahmet and others. The Montana Association of Realtors and the Montana Landlord Association testified in favor.
Opponents — including Kelly Lynch (Montana League of Cities and Towns), the Montana Hotel Lodging Association, the Montana Association of Planners, city officials from Billings, Bozeman, Missoula and Whitefish, and neighborhood groups — argued the bill would remove a locality’s ability to control commercial lodging in residential zones, override HOA covenants, and could worsen housing supply by encouraging conversion of long-term housing to short-term use. Opponents raised concerns about local public-safety controls, inconsistent enforcement of lodging taxes, and the growth of investor-operated STR platforms.
Committee members pressed witnesses on several points: whether STRs are primarily owned by in-state or out-of-state investors (witnesses offered differing estimates and noted the data are incomplete); how grandfathering or nonconforming-use protections would work when an STR is sold; and whether the bill would impair existing private covenants or municipal zoning. Several testifiers said the bill as written would preempt longstanding local zoning decisions and asked the committee to reject the bill or to craft narrow clarifications. The sponsor and other proponents urged the committee to add targeted exemptions for specialty facilities and preserve the rights of primary-residence owners while allowing local regulation of commercial-scale operations.
The committee did not record final action in the provided transcript excerpt. The hearing included dozens of witnesses on both sides and detailed legal and practical questions that committee members said would require follow-up drafting.
