Selective Zoning Bans on Short-Term Rentals Violate Idaho’s Short-Term Rental and Vacation Rental Act

Introduction

This commentary examines the Supreme Court of Idaho’s decision in Idaho Association of Realtors, Inc. v. City of Lava Hot Springs, Docket No. 50888 (May 21, 2025), where the court construed the Short-Term Rental and Vacation Rental Act (Idaho Code §§ 63-1801 to ‑1804) together with Idaho Code § 67-6539 to determine whether a municipal zoning ordinance that prohibits non-owner-occupied short-term rentals in residential zones violates state law. Petitioners–Appellants Idaho Association of Realtors and John and Michelle Taylor challenged Lava Hot Springs Ordinance 2006-5 after the City denied the Taylors a business license for operating a non-owner-occupied vacation rental in a residential zone. The district court granted summary judgment for the City; the Supreme Court reversed.

Summary of the Judgment

The Supreme Court held that Ordinance 2006-5—which (1) classifies non-owner-occupied short-term rentals (vacation rentals) as prohibited in residential zones while permitting only owner-occupied “bed and breakfast” uses—has the express effect of banning a subset of short-term rentals in violation of Idaho Code § 67-6539(1). The court interpreted the Act’s plain language and legislative intent, concluding that the legislature intended to preclude any municipal ordinance that “has the express or practical effect of prohibiting short-term rentals or vacation rentals.” Because the City’s selective zoning ban prohibits one of the three statutorily defined categories of short-term rentals, it conflicts with state law and must be invalidated. The court reversed the district court’s grant of summary judgment and awarded costs to the petitioners.

Analysis

Precedents Cited

City of Idaho Falls v. H-K Contractors, Inc. (163 Idaho 579, 2018) – Confirmed that statutory interpretation is a question of law reviewed de novo and that summary judgment review mirrors the trial court’s analysis.
Friends of Farm to Mkt. v. Valley County (137 Idaho 192, 2002) – Emphasized that statutes must be read as a whole, giving effect to every provision.
TCR, LLC v. Teton County (174 Idaho 624, 2024) – Reiterated that courts must avoid interpreting any statutory language as superfluous or redundant.
KGF Dev., LLC v. City of Ketchum (149 Idaho 524, 2010) – Supported invalidation of municipal ordinance that directly conflicts with state law.

These cases guided the court’s approach: start with the text, respect legislative intent, and invalidate any local measure that undermines a state statute.

Legal Reasoning

The court began by examining the Act’s definitions and prohibitory clause. Idaho Code § 63-1803(4) defines “short-term rental” or “vacation rental” broadly to include any dwelling offered for up to thirty days for a fee, without distinguishing owner-occupied from non-owner-occupied uses. Idaho Code § 67-6539(1) then provides:

Neither a county nor a city may enact or enforce any ordinance that has the express or practical effect of prohibiting short-term rentals or vacation rentals in the county or city. A county or city may implement such reasonable regulations as it deems necessary to safeguard public health, safety and general welfare.

The City argued that because it allows owner-occupied bed and breakfasts in residential zones, it did not “prohibit” short-term rentals. The court rejected this disjunctive, category-by-category reading, holding that the legislature intended to prevent any practice of banning a defined category of short-term rentals. The court construed “prohibit” to mean forbidding or severely hindering, and distinguished that from “regulate,” which connotes control by rules that do not amount to a ban. Ordinance 2006-5’s wholesale ban on non-owner-occupied vacation rentals in residential zones thus constituted an express prohibition.

Impact

This decision clarifies that municipalities in Idaho may not enact zoning or land-use ordinances that selectively ban specific types of statutorily defined short-term rentals, even under the guise of health, safety, or welfare regulation. Local governments retain the authority to impose reasonable safety, building-code, occupancy-limit, or nuisance-abatement regulations—but they cannot nullify the right to operate any category of short-term rental outright. Going forward:

Cities must review existing short-term rental ordinances to ensure they do not effectively ban any subset of rentals defined by the Act.
Legislatures and local regulators will likely refine “reasonable regulations” standards—e.g., noise ordinances, parking restrictions, inspection requirements—to avoid functional prohibitions.
Property owners and platform operators gain assurance that their rights under the Act are uniformly protected across residential and commercial zones.

Complex Concepts Simplified

Express or Practical Prohibition: A rule that outright forbids or so heavily restricts an activity (e.g., a zoning ban) that it cannot be pursued in practice.
Regulation vs. Prohibition: Regulation means setting conditions or standards (e.g., safety inspections), whereas prohibition means barring the use completely.
Short-Term Rental Definitions: Under Idaho law, “short-term rental” and “vacation rental” cover any dwelling offered for fewer than 30 days, regardless of owner occupancy.
Legislative Intent: The purpose of the Short-Term Rental Act is to expand—not contract—property owners’ access to short-term rental markets, subject only to reasonable local safeguards.

Conclusion

The Supreme Court of Idaho’s ruling in Idaho Association of Realtors, Inc. v. City of Lava Hot Springs establishes a clear precedent: municipalities may not use zoning laws to single out and ban a subset of short-term rentals protected by the Short-Term Rental and Vacation Rental Act. By invalidating a residential-zone prohibition on non-owner-occupied vacation rentals, the court reinforced the Act’s dual objectives of safeguarding public welfare and preserving private property rights. Local governments must ensure that their land-use regulations regulate, rather than prohibit, all categories of short-term rentals recognized under state law.