A group of short-term rental owners is taking the City of McCall to court over its ordinance imposing occupancy limits and requirements on vacation rentals within city limits.
Six plaintiffs, including Dan and Diane Scott, James Buatti, Seasons at McCall LLC, Crispin MBR LLC, Veritas Properties LLC and Taylor Ward filed suit in Valley County’s Fourth Judicial District Court in February seeking to overturn the 2022 ordinance and declare it unconstitutional.
The group says the ordinance’s requirements put an unfair burden on short-term rental owners to install costly sprinkler systems, utility upgrades and interior remodels in order to comply, effectively throttling their ability to do business. They argue this violates existing Idaho code, which bans cities from passing regulations on short-term rentals for anything other than protecting health, safety or general welfare.
“The short-term rental ordinance as passed without any formal studies or aggregations of evidence regarding the impacts – positive or negative – of short-term rentals in McCall, or regarding the need for certain safety regulations specific to short-term rentals, but not for long-term rentals or for large residences in general (with the same occupancy, events, parking, noise, and other issues targeted by the short-term rental ordinance).”
A bill from Rep. Jordan Redman, R-Coeur d’Alene, proposed during this year’s legislative session would have prevented any cities in Idaho from enacting regulations like McCall’s ordinance, but it was sent back for changes after the public hearing was packed with people on both sides of the debate. The bill didn’t move forward.
McCall filed a response to the lawsuit on March 7, but it merely responds to the complaint’s list of facts and doesn’t provide a full narrative argument at this stage in the suit.
It’s tentatively scheduled for a trial in March of 2025.
What does the lawsuit say?
The lawsuit breaks down several ways the property owners say the city’s ordinance violates their rights and hurts their ability to do business.
McCall’s ordinance puts an occupancy requirement and requires only two people per bedroom, plus two additional guests and also defines what counts as a bedroom. The complaint said this only allows a large bonus room with the option of adding additional beds if the room has a “structurally affixed closet” and has “a door that can be closed.” If a property currently has bedrooms that don’t meet this standard, they have to remove them as sleeping options and drop the occupancy allowed at the property, which is an issue for the property owners.
“Essentially, occupancy is being imputed to properties based on the number of bedrooms – and not the actual occupants,” the complaint said, noting several options for remodeling a home to meet this new requirement. “…This is another example of McCall requiring significant property modifications for short-term rentals, but not other residential uses.”
The complaint said Ward, a customer who planned to book a short-term rental for a group of 12, was impacted by the ordinance when the rental she booked had its occupancy dropped to eight people unexpectedly, leaving her to find another listing. After initially being told by short-term rental management company Vacasa that she could get another property, her reservation was abruptly canceled, and she was refunded without notice. When she asked again to be booked at a 12-person rental, the company told her they couldn’t accommodate her, and she canceled her visit, according to the complaint.
Another sticking point was McCall’s ordinance change allowing the city to require the installation of fire sprinklers on a case-by-case basis and the city’s finding that because the use of the property was changing, they could require expensive upgrades to windows and water lines to meet code. One of the owners said in the complaint they were required to install a $16,000-$25,000 upgrade to the water service line.
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The complaint also took issue with the city’s $3,200 application fee for a conditional use permit to operate a short-term rental.
