Ketchum uses health and safety standards to regulate STRs

Editor’s note: Highlands is not the only town struggling with an influx of people due to COVID-19, lack of affordable housing and a short-term rental issue on its hands.

Resort towns across the United States are scrambling to find ways to house employees and appease both sides of the aisle when it comes to short-term rentals.

In “STRs causing ‘peak’ problems”, The Highlander is taking an in-depth look at different resort mountain towns to see how different local governments across the nation are dealing with these crises.

This is the first in the series.

Traveling to the peaks of the Mountain West have always been a bucket list item for many people.

In Ketchum, Idaho, the permanent population is 3,555. At 9,150 feet, Bald Mountain, called Baldy, presides over the city with 12 lifts and 105 trails.

With city officials noticing the influx of people over the years, the city council started regulating short-term rentals.

Ketchum finds a loophole

With Idaho being a strict private property state, Mayor Neil Bradshaw said they are not allowed to restrict STRs in any shape, form or fashion.

With that being said, the board looked at other ways to regulate these vacation homes - health and safety regulations.

“The state says you can do whatever you want with your property,” Bradshaw said. “We cannot restrict short-term rentals or anything people do with their property in any way, unless there is a health and safety issue. Our town council is very much hamstrung in what they can do, with the new state regulations in place.”

Bradshaw said historically, Ketchum has allowed short-term rentals in tourist areas, but not in neighborhoods.

“Not only is it a takeaway from the city if these short-term rentals are in neighborhoods, but it destroys residential neighborhoods,” Bradshaw said. “We have a lot of weddings here in Ketchum and particularly when you have bachelor parties or the wedding itself, if you are living next to one of those houses, it really hurts the neighborhood.”

One week ago, the Ketchum town council approved to enact a fee of $527 per property for short-term rental owners to cover the administrative costs of implementing new maintenance and safety standards.

The decision follows the adoption of an ordinance in January, which requires short-term-rental owners to obtain a city permit and meet new standards, including requirements such as having smoke alarms and fire extinguishers, and keeping noise levels down. The ordinance is also intended to collect data that will better inform decisions regarding short-term rentals in the future. The data will help determine any increase or decrease in the fee.

“We are not restricting people,” Bradshaw said. “They can do whatever they want with their properties, but they must license their property and have an inspector come in. Before, all they needed was a $50 business license. Now, you have to have a $527 short-term rental license. This will also help us create data, because there are so many properties that we don’t know about. There are so many different properties. Some have an 8,000 square foot house, but another one may be an 800 square foot little apartment. What we are trying to do is get a handle on what we have and how it is done.”

Short-term rentals that are already in operation will have a 90-day grace period in which to get a permit. Many buildings that house short-term-rental properties are currently “grandfathered” in, meaning properties built before modern safety standards were not subjected to new requirements. Short-term-rental owners in that position do not need to meet the city’s code unless they are making extensive renovations, according to Ketchum Assistant Fire Chief and Fire Marshal Seth Martin.

Bradshaw said the regulations have been met with push back.

“Of course, the realtor community that is selling these places have been pushing back,” Bradshaw said. “Their sales pitch is usually, ‘You can buy this place and then rent it out when you’re not using it and that will help you pay your loan.’ We got quite a lot of pushback from those people selling the properties because they thought it would make it less liquid, but now, since there is such short inventory, they are backing off a little bit. We also have owners of these properties, who are often second or third homeowners, who are pushing back. They don’t really represent a vote, per say, but they want the flexibility of doing what they want with their property. Right now, where we are is a pretty comfortable middle ground. I think paying a $500 fee just so we can pay for the administrative costs is reasonable.”

The city estimates that the total cost to implement the ordinance in the first year is just over $260,000. That includes paying Granicus, inspection software and salaries for city employees tasked with enforcement. Ketchum officials estimate that the city has 760 short-term-rental units. A 65 percent compliance rate would be about 494 units. The $527 figure is the minimum amount required to cover the $260,000 estimated cost, assuming 494 units pay.

The city also provided estimates for the amount of time each involved city employee will need to spend on tasks related to the ordinance. The treasurer will spend an estimated 10 percent of their time on short-term rentals, a business tax specialist will spend 50 percent of their time, the fire marshal will spend 30 percent of their time, and a community safety officer will spend an estimated 20 percent. The only position that will be completely focused on enforcement of the ordinance is the newly formed fire inspector role. The salary for that job is about $79,000 a year.

Affordable housing is the bigger issue

With a 25 percent increase in population over the last two years, Bradshaw said the town is fighting to keep workers in the valley.

“The last year has been very challenging for us,” Bradshaw said. “Ketchum is a very nice town. It is a beautiful place to live. It’s remote, but it’s very sophisticated. We have sophisticated restaurants. We’ve got arts and culture. Now, we have seen a 25 percent increase over the last two years in our population. It is almost doubling the price of our property value. That creates the big issue of creating affordability for our year round residents and our workforce. Now, restaurants are closed on Sunday and Monday nights because they don’t have the workforce. The wealthy people are realizing that this housing situation is affecting them. Businesses are trying to grow here and there is a lot of work, but there’s no way to get an employee because there is nowhere to stay. Even when we interview for the city, the first question we ask them is if they have a place to live. It is that tough.”

Bradshaw said the character of Ketchum is defined by its people.

“We need a diversity of people living here, not just wealthy homeowners,” Bradshaw said. “We want people working in our businesses and contributing to the community. This isn’t Disneyland, we aren’t going to bus in and bus out workers. It’s a much bigger issue than short-term rentals. Short-term rentals are just a flashpoint to the bigger issue, the affordability of living in a resort town and creating a workforce to support the businesses.”

Currently, the workforce in Ketchum lives in the surrounding towns 15, 30 or even 50 miles away.

“I always say seeing the lights leave town at the end of the day is like seeing the lifeblood of our town disappearing,” Bradshaw said. “We end up with dark condos every night. We lose that life that we are so used to.”

Advice to Highlands Town Board of Commissioners

Bradshaw advises the Highlands Town Board of Commissioners to figure out how extensive their toolbox is.

“Our toolbox is pretty limited,” Bradshaw said. “It is not going to take just one tool. It is going to take a whole bunch of tools. There is no silver bullet in any of this. It’s all incremental change and we as elected officials are really in the business of change management. We are not trying to preserve what was there two years ago. What we are doing is trying to manage the change that is inevitably happening. Utilize all of the tools that are available to you and use them to the fullest extent that you can and the most appropriate way possible to make incremental changes that are inevitably going to happen, in a way that is best for your town.”   

In next week’s article, The Highlander will take a look at how Breckenridge, Colorado, is dealing with their short-term rental situation.

- By Christopher Lugo