CHAMBERLAIN — A proposed ordinance that would effectively ban future short-term home rentals, such as VRBO and Airbnb, passed its first reading at the Chamberlain City Commission meeting Monday, despite fielding some opposition from residents.

Ordinance 562J calls to amend the City of Chamberlain’s zoning to prohibit “transient commercial use” of residential property — defined specifically as the use of any residentially zoned property as a bed and breakfast, hotel, inn or other lodging establishment for a duration of under 30 consecutive calendar days.

The purpose of the ordinance, as drafted, claims that prohibiting transient commercial use of residential property would “preserve and enhance the character” of residential districts while promoting public health and safety and the general welfare of the city. It also claims that transient commercial use is “inharmonious with and injurious to the preservation of the residential character and environment of the city.”

Transient commercial use would only be prohibited in the city’s R1 and R2 zones, which the city’s zoning map defines as low- and moderate-density residential zones, and would not affect properties that have already received conditional use approval to operate as a transient commercial property.

“We are in an incredible housing crunch right now, and family homes are very hard to come by,” said Chad Mutziger, mayor of Chamberlain. “Each one of these that gets taken up by a VRBO takes away from family housing.”

Newsletter signup for email alerts

Mutziger said that because VRBOs are a for-profit business that compete with Chamberlain’s hotels and motels, he sees no reason why they can’t be confined to the same commercial zones.

Karri Swenson, a lifelong Chamberlain resident who works as a realtor and manages multiple transient commercial properties inside and outside of Chamberlain’s city limits, said properties like hers offer something hotels can’t always accommodate.

“Most of our vacation renters are families and extended families who want to stay in one area where there’s room to spread out for the kids to play — where there’s a common area,” she said. “That’s not something that is normally available in hotels and motels. Vacation rentals are really offering a unique product to people.”

A sign on S. Main Street welcomes guests and residents to Chamberlain as they exit the interstate. (Hunter Dunteman / Mitchell Republic)
A sign on S. Main Street welcomes guests and residents to Chamberlain as they exit the interstate. (Hunter Dunteman / Mitchell Republic)

Karri, who attended the meeting with her husband Jim Swenson, said the individuals come to Chamberlain and spend money at grocery stores, recreation services and restaurants. Local taxes are also collected to the city’s benefit.

“When we go to a place on vacation, Karri looks on VRBO and finds a place, and I go find a guide or whatever we want to do,” Jim said. “It’s all built around that very first VRBO rental. If you’re holding those people out of Chamberlain, that’s not very good.”

Mutziger said hotel guests likely follow the same process.

“We stayed in Custer in August and we brought everything with us, never bought a thing in town,” Commissioner Tim Thomas told the Swensons.

Commissioner Hannah Ruhlman jumped in to say the ordinance doesn’t have to last forever, and implied that it was designed to be temporary. As it was written, the proposal does not have an expiration date for the prohibition.

Ruhlman noted that a buffalo plant is planned to open, which will bring additional workers to the city. She wondered where the incoming employees could find housing, and believes the ordinance would preserve unoccupied housing for future workers to live in.

Another member of the public, who didn’t provide a name, noted that residents in and around Sturgis operate their homes as transient commercial properties for only a couple weeks during the rally. Jim asked if the commission would consider exceptions for busy times such as the state’s pheasant opener or the Fourth of July, when hotels are totally booked.

Commissioner Nicky Gaulke indicated that the commission would be open to making an exemption, but that it would have to come through another amendment at a later date. Thomas suggested that the commission move forward with the proposal, and the commission agreed to revisit the amendment at the second reading.

The proposal will have its second reading, including discussion on the potential amendment, at the Chamberlain City Commission meeting on Nov. 1.

If approved, anyone who violates the ordinance would be guilty of a misdemeanor, facing fines of up to $200 per night rented and jail time of no more than 30 days.

Editor's note: An earlier version of this story used a direct quote from Ruhlman, and has been updated to be paraphrased to better reflect her justification of the proposed ordinance.