Vacation rentals are destroying Montana’s housing market

The American dream of purchasing and owning a home is becoming further out of reach for too many Montana families. According to recent National Association of Realtors Affordability Distribution Curve data, Montana is the least affordable state in the entire country for homebuyers, outpacing California and other areas well-known for housing shortages. 

Now, state legislators are considering SB 336, which would further exacerbate the issue. Legislators are faced with a choice of supporting residents and local communities, or sacrificing everyday Montanans’ needs to bolster commercial short-term rental (STR) investors. 

The reality is that most short-term rentals in Montana today are run by commercial property managers, often by out-of-state or foreign-based companies. According to AirDNA, 70% of short-term rentals in Helena are commercially operated, along with 74% in Missoula and 75% in Big Sky.  

There’s nothing necessarily wrong with foreign investment in Montana. There is something wrong with advantaging these investors over everyday Montanans and turning local communities into late-night tourist districts.  

Senate Bill 336, the legislation currently under consideration, would pave the way for venture capital firms and commercial operators to scoop up homes, even entire blocks of downtown or suburban housing, and convert them into permanent vacation rentals. It would allow commercial short-term rental operators to run full-time, hotel-like businesses in residential neighborhoods. This would have a devastating effect on quality of life and will have an unprecedented impact on the state’s housing market. 

We must learn from the experiences of states like Arizona, where similar legislation passed. This legislation created a massive influx of short-term rentals in resort and destination communities, intensifying housing shortages and pricing out essential workers, nurses, and law enforcement personnel. The ensuing chaos caused the Republican governor and Republican-led Legislature to repeal the legislation.  

If SB 336 becomes law in Montana, fewer homes will be available for teachers, first responders, and service workers — integral members of our communities. Neighborhoods will be transformed into revolving doors for tourists instead of places where families can live and work, and city and county officials will have their hands tied when trying to address bad actors. Party houses, trafficking and other criminal activity will find its way into quiet Montana communities, hurting families and draining critical law enforcement resources. 

Tourism is an important part of Montana’s economy and identity. However, tourism should not come at the cost of Montanans’ neighborhoods. We can protect the property rights of Montana residents without letting corporate operators who have no stake in our communities walk all over residents and local leaders.  

We must protect our neighborhoods and the communities we love now and for future generations. We urge lawmakers to vote no on SB 336 and keep our state legislature from selling out our neighborhoods for short-term gain. 

 Franklin Coley is president of the Alliance for Stronger Communities.