By Sam Douglass

On Monday, voters in the town of Montgomery overwhelmingly rejected a petition to repeal a recently adopted ordinance on short-term rentals. The new ordinance, adopted by the Selectboard in June, requires property owners to register annually and comply with multiple policies, including limits on the number of guests. 

As approved in June, the ordinance defines short-term rentals as rented for 30 days or less. Initial registrations for rentals require the number of bedrooms, any number of people living at the property, parking information, and multiple other records on its operation. Owners must also provide proof of insurance, proof of compliance with taxes including the rooms-and-meals tax, a short-term rental safety form and, when applicable, a state fire-safety inspection report. Pet-friendly rentals must require guests to provide proof of a valid rabies vaccination.

The ordinance limits occupancy to two people per bedroom, plus two additional people per dwelling unit. It also requires at least one off-street parking space per bedroom, with required spaces measuring 9 by 18 feet.

Rental registrations expire April 30 and must be renewed annually. The regular renewal fee is $150 per unit if submitted by May 1, and a late renewal costs $200. After May 31, the existing registration expires and the owner must submit a new initial application and pay the $300 initial fee.

Owners who do not register may be issued a civil penalty of $800 per day under the ordinance, and additional penalties ranging from $200 to $800 may be issued per day for other infractions.

Montgomery isn’t the first municipality in Vermont to adopt such policies. Ludlow, Stowe, and Burlington all have similar ordinances, though in some cases stricter than in Montgomery. Stowe, for instance, imposed a cap on the total number of operating rentals at 850 and will not issue licenses past that amount. 

According to data from the Vermont Department of Tourism and Marketing, the state’s economy benefits from $4.2 billion in annual tourist spending, which accounts for around 9% of the state’s revenue. Short-term rentals, like those hosted through Airbnb and Vrbo, contribute significantly to that total. For towns like Montgomery and Stowe, there is a delicate balance between the needs of a tourist economy that supports local businesses and the housing needs of its residents and workforce. 

In Montgomery, residents are forced to grapple with median home prices exceeding $350,000. The town of 1,184 residents has 105 active short-term rentals, according to online market data and 2024 estimates from the U.S. Census Bureau. This represents just over 13% of total housing units. In neighboring Jay, home to the Jay Peak ski resort, the median home price is around $440,000.

In a state with a shrinking population and a lack of housing, state lawmakers have targeted short-term rentals and second homes for reform. A statewide short-term rental framework gained traction in 2021, but was vetoed by Governor Phil Scott, who argued it could reduce housing options. More recently, a separate statewide registry bill stalled in committee this past legislative session.