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Montana's Booming Short-Term Rental Market Comes With Challenges, Study Says

Volume and density of known Short Term Rentals in Montana
" The State of Short-Term Rentals in Montana:"
Volume and density of known Short Term Rentals in Montana

Researchers at the University of Montana have released a study that says a booming short-term rental market could have a significant impact on the state’s economy and affordable housing, if left unchecked.

The face of Montana’s tourism industry has already changed a lot in the last five years, says Jeremy Sage, the interim director of the Institute for Tourism and Recreation Research at the University of Montana.

Short-term rentals like you’d find on apps like AirBnB or VRBO have grown in popularity. According to the study, the number of nights booked in these rentals in 2020 was 33 times the amount in 2015.

"The main reason that they are choosing them is, you know, it's the location, the comfort, the ability to have a kitchen, the ability to rent an entire house that's close to where they want to be."

Sage says Flathead and Gallatin Counties topped the list in sheer number of rentals, but Madison and Park Counties had the most relative to their population. 

He says that while some of the larger municipalities in Montana have started to regulate the industry with licenses, permits or requirements for fire inspections, smaller towns and counties don’t. Sage says that could have repercussions down the road. 

"From the state's perspective, there's increasing concern about the ability to collect lodging taxes or bed taxes on these pieces."

That means the state could stand to lose a lot of tax revenue. And, in places like Missoula or Bozeman where options for buying are already thin, there’s a concern that people will buy properties to rent out to tourists and make the market even tighter for those looking for a home. 

"They have their place in the market. It's a matter of how do we work with them and within them."

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