Photo looking up into dome of capitol building in Pierre, SD

Crafting long-term policy for short-term rentals

A hot topic in Sioux Falls and surrounding areas recently has been the use and regulation (or lack thereof) of short-term vacation rentals. These rentals bring businesses into residential neighborhoods in a way that is causing some disagreement among property owners.

For those that are unfamiliar with this term, in Sioux Falls city code a short-term vacation rental is defined as the following:

“A dwelling or portion thereof, or a mobile or manufactured home or portion thereof, that is rented, leased, or furnished to the public on a daily or weekly basis for more than fourteen (14) days in a calendar year and is not occupied by an owner or manager during the time of rental. This term does not include a bed and breakfast establishment as defined in SDCL 34-18-9.1.”

While that is the technical and legal term, in layman’s terms these are essentially properties that are rented out by owners for people to stay in while they travel or visit different destinations. These types of vacation rentals were common in the past in certain destination cities, on popular tourist lakes and in locations where large events take place over an extended time period (for example, the Sturgis Rally or a music festival).

Today, there are about 650 short-term vacation rentals permitted in the Sioux Falls city limits.

In the last few years, the growth of websites like Airbnb and VRBO, has allowed people across the country easy access to advertise their homes as vacation rentals. This has led to an explosion of homeowners renting out their properties to visitors as a place to stay while they travel or work. Today, there are about 650 short-term vacation rentals permitted in the Sioux Falls city limits.

Recently, some of these short-term vacation rentals have caused issues with other residents living near them. Neighbors have come forward to complain of lots of vehicles coming and going, visitors taking up street parking, excessive noise and a handful of other things. This has led the Sioux Falls City Council and Minnehaha County Commission to recently address the issue in a joint form.

Today, the City of Sioux Falls has a permitting process one must go through in order to rent their property as a short-term vacation rental. Property owners must provide a list of information about themselves and the property they would like to rent out to apply for a conditional use permit through the city. They are given a certain set of parameters with which they and the guests must comply. If any of these parameters are broken, the renter loses their permit to rent their home out as a short-term rental after four citations from the city.

Much of the recent controversy comes from locations that are not within the current city limits of Sioux Falls. In August, an ordinance was proposed by the Sioux Falls City Council and Minnehaha County Commission that would affect what is known as the “joint zoning” area. It mirrors the city’s ordinance in some respects, such as the loss of permit following four violations, and similar informational and reporting requirements.

Differences in the ordinances include the limits on the number of guests per bedroom, number of off-street parking requirements, registration with the State of South Dakota as a vacation rental and a few other things. Following a thorough discussion and much public comment, it was decided by both the council and commission to send the ordinance back to the joint planning commission to make a few more changes before they take final action on it in the coming months.

As of press date, nothing has been changed or decided upon. However, the City Council and Minnehaha County Commission anticipate taking up the issue again in the next few months. The action they potentially take will not affect the current ordinance within the city limits, though that may also see changes in the future if necessary. Stay tuned!