Chamberlain is reviewing visitor home rentals in an effort to preserve single-family dwellings, mayor says

CHAMBERLAIN, SD (KELO) – This is called an ordinance prohibiting the transitional commercial use of residential property and in fact, it would prohibit future use of residential homes like 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.

Homeowners can rent out their homes to visitors through Airbnbs or Vrbo. Both companies work with hosts, many of whom are landlords, to rent out their property to visitors.

“We like to have tourists. We are a destination city,” Mutziger said of using Airbnb and Vrbo in the city.

The city of Chamberlain has granted conditional use permits (CUPs) in residential areas for these uses, Mutziger said. Those with CUPs will be grandfathered if the proposed order passes, Mutziger said.

He fears there will be increased interest from homeowners who only want to rent their homes through Airbnb or Vrbo and from those who buy a home with the sole purpose of renting it out through Airbnb or Vrbo. If that happened, it would negatively impact an already limited supply of housing in the city, he said.

Housing is already so scarce in Chamberlain that it is negatively impacting the workforce, Mutziger said.

The city needs single-family homes to attract workers, and if there are none or too few, it’s difficult to attract those workers, Mutziger said.

“We are running out of homes for sale,” said Jeannine Hickey Reuer of Chamberlain Real Estate Professionals. Hickey Reuer said she knew a potential hospital employee who couldn’t find a home, so the potential employee couldn’t 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. Subdivision covenants prevented such use and the buyer changed its mind, Hickey Reuer said.

The city is developing a 60-acre residential and commercial division that will add housing to the city.

The proposed ordinance recently passed its first reading. The next step is a second reading of the ordinance at the Nov. 1 council meeting, according to city chief financial officer Nicky Gaulke.

Mutziger said if the ordinance is approved, the council could possibly assess it in the future to allow certain exceptions such as allowing rentals during the July 4 holiday.