CHAMBERLAIN, S.D. (KELO) — It’s called an ordinance to ban transient commercial use of residential property and in effect, it would ban future use of residential houses as Airbnbs and Vrbo (which stood for Vacation Rentals by Owner).
Chamberlain Mayor Chad Mutziger said the proposed ordinance is an effort to preserve housing stock in the city.
“It’s nothing against Airbnbs or Vrbo,” he said.
House owners can rent their houses to visitors through Airbnbs or Vrbo. The two companies work with hosts, many of them house owners, to rent their property to visitors.
“We love having tourists. We’re a destination city,” Mutziger said of Airbnb and Vrbo use in the city.
The city of Chamberlain has granted conditional use permits (CUP) in residential areas for those uses, Mutziger said. Those with CUPs will be grandfathered in if the proposed ordinance passes, Mutziger said.
He’s concerned there will be increased interest from house owners who only want to rent their houses through Airbnb or Vrbo and those who buy a house for the sole purpose of renting them through Airbnb or Vrbo. If that happens, it would negatively impact an already short supply of housing in the city, he said.
Housing is already in such short supply in Chamberlain that it’s having a negative impact on the workforce, Mutziger said.
The city needs single family houses to attract workers and if none or too few are available, it’s hard to attract those workers, Mutziger said.
“We are lacking houses to sell,” said Jeannine Hickey Reuer of Chamberlain Real Estate Professionals. Hickey Reuer said she knows of a potential hospital employee who couldn’t find a house, so the potential employee could not take the job.
Hickey Reuer said she was working with a potential buyer who planned to buy a house and operate it as a visitor rental. The subdivision’s covenants prevented such use and the buyer changed his mind, Hickey Reuer said.
The city is developing a 60-acre residential and commercial division which will add housing to the city.
The proposed ordinance recently moved through its first reading. The next step is a second reading for the ordinance at the Nov. 1 council meeting, according to the city’s finance director Nicky Gaulke.
Mutziger said if the ordinance is approved, the council could possibly evaluate it in the future to allow some exceptions such as allowing rental over the July 4 holiday.