Senate backs law limiting local bans on short‑term rentals but preserves zoning authority

The Senate approved legislation (Senate Bill 336) that defines short‑term rentals as a residential use of property and limits certain municipal and county prohibitions, while leaving local governments authority to restrict rentals within entire zoning districts.

Senator Hertz, sponsor of the bill, said the measure provides a statutory definition and clarifies where local governments may lawfully prohibit short‑term rentals. The bill specifies that a primary residence — defined in the bill as a place where an owner resides at least seven months of the year — may be rented short‑term and that an express prohibition “may not preclude the short‑term rental of all or part of a property owner’s primary residence.” The measure also contains an “adjacency” provision protecting short‑term rentals adjacent to a primary residence.

Opponents, including Senator Pope and others, said land‑use decisions are best made at the local level and argued the bill amounts to a state mandate over municipal zoning. Pope said local governments and the Montana Land Use Planning Act (MLUPA) give communities tools to address housing and zoning and that statewide mandates could conflict with locally adopted plans.

Senator Fern said she supported most of the sponsor’s approach but opposed the adjacency language, saying it could be abused and would disproportionately affect certain communities. Other senators noted the bill had been revised from last session, came out of committee unanimously, and that the statutory definitions were needed before local governments could reasonably regulate short‑term rentals.

After debate, the Senate passed the bill on second reading, 36 yeas to 14 nays. The sponsor said the measure still allows local governments to prohibit short‑term rentals within specified zoning districts; proponents argued the law protects homeowners who rely on short‑term rentals to help pay housing costs, while opponents argued it reduces local flexibility to manage housing and community character.

The committee record reflects extensive discussion of local control, housing affordability, and the interplay with MLUPA.