On Thursday, more than 50 people packed into a room at City Hall to learn about the proposed ordinance.
The ordinance defines a "vacation home" as one within the city limits that's rented in its entirety to the public for a time period not exceeding 28 consecutive days and for more than 14 total days in a calendar year. State law currently requires the registration of rental homes, but allows a home to be rented for 14 days without being registered with the state — colloquially known as the Sturgis Rally rule, Community Development Director Vicki Fisher noted during the meeting.
More than 50 people attended the open house on short-term rental policy on Thursday, July 24 at Rapid City Hall
The ordinance allows for short-term rentals in a variety of zoning districts, but a conditional use permit is required for homes with more than five bedrooms. It sets a cap at two guests per bedroom plus two additional guests and requires a minimum of two off-street parking spots (except in the downtown area).
The ordinance does not include bed and breakfasts nor set a cap on the number of registrations per neighborhood. It does allow a grace period of at least six months for compliance, from the date of adoption of the ordinance by the City Council, should that occur.
The council voted against a short-term rental ordinance in the fall of 2016.
Jessica Olson, the current planning division manager with the Rapid City Department of Community Development, said the city has determined there are around 600 short-term rentals in Rapid City during the "off" season and up to 900 during tourism season. And at last check in May, around 30 were registered with the state, with a handful more pending, Olson said.
During the meeting, Olson and Fisher noted the city is looking into software that would determine a more exact number of short-term rentals in the city. The software will scour the Internet for listings beyond popular sites AirBnB and VRBO. Olson and Fisher did not provide a cost for the software as the department is still deciding between two companies.
A registration fee for rental owners will be in the $90-$155 range, Olson said, which will cover, "the annual cost of the software divided by the number of anticipated registrants, and a small portion of planner and administrative salaries based on the amount of time we anticipate staff will spend working on each application. This is still to be determined based on final contract."
As the city researched the topic, it found 19 code complaints between 2019 and 2024 at short-term rentals. Complaints from neighbors included high guest turnover rates, noise, parking issues and too large of groups at a home.
A handout given to attendees noted registering with the city would help staff monitor the status of vacation homes, ensure compliance with requirements and collect contact information for resolving complaints.
Olson said the meeting was a chance for people to learn about the draft ordinance ahead of public hearings.
During the meeting, among other questions, attendees asked about incentives to register, (with one speaker worried about owners who'll wait for enforcement action rather than proactively registering) and carveouts for outliers (like bedrooms that can fit more than one bed).
Jessica Olson, current planning division manager with the Rapid City Department of Community Development, said the city's determined there are around 600 short-term rentals in Rapid City during the "off" season and up to 900 during tourism season.
Olson said, ultimately, the ordinance gives the city tools to enforce regulations on owners who have nuisance properties or aren't in compliance with city and state law.
The citizen committee tasked with coming up with the ordinance was formed in July 2024, after the City Council asked staff to address the topic. The committee included vacation rental homeowners, hospitality industry leaders, real estate agents, business owners and low-income housing advocates, committee member Stacey Nelson said.
"There was a large group of people that brought together a lot of ideas," Nelson, a local real estate agent, said, noting the group looked at similar ordinances locally and beyond. "We looked at the ones that have been put in place locally, in the Black Hills, but also ones that have been put in place across the country. (We looked at) which ones have really worked well and been able to be stood up and then actually upheld throughout a period of time. That helped out a lot, and people brought really good information at the table."
3.9 million visitors, $504 million in spending: Visit Rapid City releases report on 2024 travel, tourism impact
According to the organization, 3.9 million people visited the city, spending $504 million while here — up from 3.8 million and $479 million, respectively, in 2023.
The city, in conjunction with the committee and other partners, also held a public open house on the topic at the Dahl Arts Center in January and conducted an online survey.
Nelson said the group weighed the pros and cons of various restrictions, discussing how enforceable each would be.
"One of the things that the committee really felt was important is that if the ordinance gets passed ... it's something that we can actually have be implemented, and not just something that's so restrictive that it's never going to be implemented," Nelson said. "I honestly feel that it's been a relatively well-vetted ordinance, I'm sure it'll have some challenges to it and some benefits to it as well. But this has been discussed and reviewed and hashed through for a significant period of time to hopefully eliminate as many potential issues in the future as possible."
City stats show of those roughly 600-900 short-term rentals in Rapid City, the neighborhood with the highest percentage of vacation homes is the West Boulevard Historic District at 8% (64 vacation homes out of 770 total housing units). Canyon Lake/Chapel Valley is at 5% and downtown is at 4%, according to the city's research.
The city's handout said the ordinance is expected to be considered at public hearings starting in August. It will first go to the Planning Commission, then the Legal and Finance Committee before heading to the City Council. Ordinances require three readings (including the final vote).
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