Enhanced regulations on short-term rentals – think Airbnb or VRBO – have been adopted by Rapid City.
As the state’s tourism market grows, many have voiced concern about the downstream impacts on affordable housing.
Advocates say short-term rentals provide a homier alternative to hotel stays, but those same rentals often take up houses that could be purchased by first-time homebuyers. Further, such rentals frequently are left vacant much of the year, especially during the tourism offseason.
These new regulations will, among other things, mandate parking requirements and prevent rentals without a permit for homes with more than five bedrooms. They were adopted at the most recent city council meeting.
However, local AirBNB operator Jennifer Verhey said her small rental doesn’t need additional regulation.
“Short-term rentals are already regulated by the state Department of Health, they perform an annual inspection and charge us a substantial fee for licensing," Verhey said. "So, another layer of local licensing isn’t about safety or accountability it’s simply a money-grab from the city. Short-term rentals do bring in significant revenue to the city. We pay sales tax and lodging taxes. The online platforms that bring these people together collect and remit the taxes to the state on the owners’ behalf. It’s very efficient for the government to get their money in an inexpensive manner.”
That mentality is not as popular among people attempting to purchase property in Rapid City. Take Rapid City resident Hayley Freed. She said first-time homebuying is an unattainable dream for many in the Black Hills.
“With the growing number of starter homes being snatched up by already wealthy entities, the likelihood of a new family, a new couple, or even an individual being able to purchase an affordable home seems to be slipping away more and more," Freed said. "I understand there is a difference between buying homes up to slap a coat of paint on and rent out for absurd amounts of money – it’s much different than renting out that spare room, that in-law suite, that weird lower level so many of these historic homes have. While many owners are responsible and caring, there are also many who are borderline slumlords that have no business owning dozens of what could be affordable properties.”
This comes as the wider debate surrounding affordability across South Dakota has emerged following the governor’s budget address.
