by Logan Finney, Idaho Reports

This week, the Idaho Supreme Court struck down a Lava Hot Springs ordinance that limited what kinds of short-term vacation rentals can operate in residential zones of the city.

Lava Hot Springs residents with support from the Idaho Association of Realtors sued the city after being denied a business license to operate a vacation rental in the residential zone, arguing the ordinance violated Idaho’s Short-term Rental and Vacation Rental Act.

The Idaho Legislature passed that law in 2017, preempting any local governments from limiting short-term rentals beyond reasonable regulations for health and safety concerns.

The 2006 zoning ordinance allowed owner-occupied short-term rentals in both commercial and residential zones – defining them as “bed and breakfast” short-term rentals – while restricting non-owner-occupied short-term “vacation rentals” to commercial zones only.

The state supreme court overturned the lower court’s summary judgment in favor of the city, which was based on the ordinance not prohibiting short-term vacation rentals outright.

“The legislative intent in adopting the Act is not just to foster access to some short-term or vacation rentals within a city, but to all of them,” the court found.

Chief Justice G. Richard Bevan authored the unanimous opinion, issued Wednesday.

“The argument is essentially that, so long as at least one type of short-term rental is allowed in its residential zones, the City has complied with the Act. We disagree,” he wrote.

The state law encompasses short-term rentals operated in owner-occupied residences and those in otherwise privately-owned residences. It also covers any short-term rentals operated in condominium, cooperative or timeshare units.

“We express no opinion about what might constitute a reasonable regulation. But such regulations may not amount to express or practical prohibitions on any one of the three types of short-term rentals,” Bevan wrote.

The city of McCall also faces a lawsuit seeking to overturn its short-term rental ordinance, as reported by BoiseDev. A bill to further restrict cities’ ability to regulate short-term rentals failed in the Senate this legislative session.

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