Sandpoint commissioners postpone action on short-term rental rewrite amid legal risk and public opposition

City planning staff and legal counsel framed a proposed rewrite of Sandpoint's short-term rental (STR) regulations as a response to recent Idaho court rulings and urged commissioners to bring the ordinance into compliance with state law while keeping strong local controls.

Community Planning & Development Director Jason Welker said the existing 2017 ordinance contained a hard cap of 35 non-owner-occupied STRs in residential zones, representing about 1% of housing stock in those zones, and that the Idaho Supreme Court's decision on Lava Hot Springs has made numerical caps legally vulnerable. Welker told the commission the draft removes the cap but adds other rules the city believes are defensible under Idaho Code 67-65-39: a new "high-occupancy" permit requiring conditional-use review for larger rentals, off-street parking requirements, a requirement that nonresident owners have a local representative within 20 vehicular miles, and a transition to an annual permit window for administrative efficiency.

Legal counsel explained that the Lava Hot Springs ruling treats regulations that "forbid, prevent, preclude or severely hinder" STRs as prohibitions and that the 35-unit cap likely would be struck down. Counsel said the draft aims to stay on the permissible side of the line by focusing on health, safety and neighborhood integrity measures (parking, occupancy limits, local contacts, enforcement) while removing the explicit numerical cap.

That approach drew sharp public reaction. Dozens of residents spoke during the public hearing. Opponents said removing the cap was effectively deregulation that would encourage out-of-state investors, reduce long-term housing supply and erode neighborhood character. Eric Engling urged commissioners not to "change our entire housing policy out of fear of litigation," saying litigation can preserve protections; Cassandra Morelli and other residents testified that unbounded STR growth destroys community ties. Other speakers — including current and former STR hosts — urged fair, targeted rules for owner-operators and questioned details such as the proposed two-space off-street parking requirement for small ADUs.

Commissioners debated how far local controls could go without becoming a de facto prohibition. Topics included the proposed high-occupancy threshold (staff modeled 12 occupants), parking formulas, whether occupancy should be set by bedrooms, and whether stricter rules should apply in residential versus commercial zones. Staff noted the city currently registers roughly 200 STRs (about 160 owner-occupied) and enforces violations with an advertising fine (noted in the draft as $110 per day for advertising without a permit) and permit revocation with a two-year reapplication bar.

After deliberation, a commissioner moved to postpone action so staff could further evaluate occupancy thresholds and parking standards and to re-open the public hearing at the Planning & Zoning meeting on Dec. 16. The motion was seconded and carried on a roll-call vote.

Next steps: staff will refine the draft based on commissioner direction and public input and return the ordinance for a new public hearing on Dec. 16; any Planning & Zoning recommendation will go to City Council for final action.