As the Sandpoint Reader reported, Mayor Jeremy Grimm called House Bill 583 "some of the worst legislation I've ever seen." This spring, Sandpoint's city council began considering repeal of its January short-term rental ordinance, four months after rebuilding it.
If you've been researching an investment or vacation property in Sandpoint and came across mentions of a rental cap or a waitlist of hopeful owners, that system no longer exists. It wasn't just amended. It was rewritten once by the city and then overridden entirely by the state, twice within about six months.
The Ordinance the Council Built in January
The process began in November 2025, when Sandpoint's planning staff realized the city's existing cap for non-owner-occupied short-term rentals in residential zones was legally exposed. As the Sandpoint Reader reported, the Idaho Supreme Court had recently struck down a similar cap in Lava Hot Springs, ruling that a hard limit functioned as a prohibition rather than a regulation, which Idaho's 2017 vacation rental law already barred. As Spokane Public Radio reported, Sandpoint's city attorney, Zach Jones, told the planning commission, "Regulations can amount to a prohibition." If the 36th applicant is turned away today, the argument goes, the 501st would be turned away tomorrow regardless of where the number sits.
Planning director Jason Welker told commissioners the city had been put on notice that hosts were organizing to sue if the cap stayed in place. As of December 2025, roughly 200 short-term rentals were operating inside city limits, with 18 more owners waiting for one of the capped slots to open.
As the Sandpoint Reader reported, on January 21, 2026, the council voted 4-2 to remove the cap while adding its own replacement framework: a new high-occupancy permit tier for units advertised to sleep 10 or more guests, updated parking standards, and a requirement that non-owner-occupied operators keep a local representative within 20 miles or contract with a local property management firm. Council President Deb Ruehle joined Councilors Joel Aispuro, Joshua Torrez and Joe Tate in favor; Pam Duquette and Kyle Schreiber opposed.
State Law Supersedes the January Ordinance
Less than two months after the January ordinance passed, a change in state law put its future in doubt. Governor Brad Little signed House Bill 583 on March 16, 2026, after it passed the Idaho House 54-16 and the Senate 23-12. As Proper reported, the law took effect July 1, 2026. It went well past what struck down Lava Hot Springs' cap. As set out in Idaho Code 67-6539, the law barred cities and counties from requiring any license, fee, permit, certification or registration to operate a short-term rental at all, and it prohibited the exact tools Sandpoint had just built in January: high-occupancy permitting, added parking standards, and a local-representative mandate.
As the Sandpoint Reader reported, on May 20, 2026, the council took up a new ordinance to repeal the one it had passed four months earlier. The first vote to advance it tied, and Ruehle broke the tie in favor, describing her vote as "very disgustingly and apprehensively." The council then voted 4-0 against waiving Idaho's requirement that ordinances be read three times before adoption, meaning the repeal stretched into later meetings, with the next one set for June 3. Whether or not Sandpoint finished that paperwork on its own timeline, the substance of the January ordinance stopped being enforceable the moment state law took effect on July 1, because state law overrides city code regardless of how many readings city council has left to hold.
What the Law Actually Bars, and What It Doesn't
House Bill 583 reclassified short-term rentals as a "non-transient residential use," the same zoning category as an ordinary house. Under the rewritten statute, no Idaho city or county may:
- Require a license, fee, permit, certification or registration to operate a short-term rental
- Impose owner-occupancy requirements
- Cap the number of days a property can be rented
- Cap the number or density of short-term rentals in an area
- Require added parking, insurance or structural upgrades beyond what applies to any home
- Demand ongoing reporting on rental activity
Cities and counties kept a narrow set of safety tools. They can still require functioning smoke alarms in every sleeping area, a fire extinguisher and carbon monoxide detector on each floor, removable escape ladders in above-ground sleeping rooms with windows, and occupancy limits tied to the International Building Code. Ordinary noise, nuisance, parking and traffic ordinances still apply to short-term rentals exactly as they apply to any other house on the block.
Whatever Happened to the Waitlist
Before July, being one of Sandpoint's 35 permitted operators carried real value, because a new entrant had nowhere to go until a slot opened. That scarcity is gone. There is no permit to wait for anymore. Any residential property that meets ordinary zoning and safety rules can operate as a nightly rental without applying to the city at all.
That changes the math for anyone pricing a property based on it already holding a permit. It also shifts a different kind of paperwork onto owners who book directly rather than through a platform. Airbnb and Vrbo are required to register with the Idaho State Tax Commission and collect the state's lodging taxes, roughly 6% sales tax and 2% travel and convention tax, on the bookings they facilitate. An owner who takes reservations directly, outside a platform, still has to register and remit those taxes themselves.
As the Bonner County Daily Bee reported, Grimm warned that the law would let "unfettered short-term rental speculators and investors" purchase into the local housing stock without the local checks that used to slow that down.
The One Place Restrictions Still Live: the HOA Binder
State preemption reaches city and county ordinances. It does not reach private contracts, and a homeowners association's covenants are a private contract between owners. But a separate piece of Idaho law complicates that too. Idaho Code 55-3211, passed in 2022, bars an HOA from adding or amending any covenant that limits short-term rentals unless every owner affected agrees to it in writing. A restriction that already existed in the recorded covenants before that statute took effect can still be enforced. A restriction an HOA board wants to add today effectively needs unanimous buy-in from every owner it would apply to, which in anything larger than a handful of lots is close to impossible to secure.
For a buyer touring a gated or master-planned community, that turns one question into the whole ballgame: not whether the city allows short-term rentals, because state law already answered that everywhere, but whether this specific development's covenants addressed rentals before 2022, and whether that language is still on the books unamended.
What This Means If You're Comparing Sandpoint to Other North Idaho Towns
If nightly-rental income is the goal, the search no longer needs to start with which properties hold a city permit, because none of them do anymore and none of them need to. It does need to include a plain read of whatever CC&Rs govern the address, since that document, not the city's zoning code, is now the only place a restriction can legally live.
If the goal instead is a predictable, quiet street, city zoning maps won't answer that question the way they used to. A house that sat outside Sandpoint's old capped zone, or that never came up in a search for "permitted rentals," can become a nightly rental tomorrow. The only durable protection left runs through the HOA's recorded history, not through anything the city publishes.
A Few Questions Worth Asking Before You Write an Offer
Does this mean any house in Sandpoint can become a nightly rental? For zoning purposes, yes, provided it meets the basic safety equipment requirements and any occupancy limit tied to building code. If the property sits inside an HOA whose covenants restricted short-term rentals before 2022, that restriction can still apply regardless of what the city or state allows.
How would I confirm whether a property's HOA already restricts short-term rentals? Ask for the recorded covenants and the full amendment history before making an offer, and pay attention to the dates. Under Idaho Code 55-3211, a restriction added or amended after 2022 needed every affected owner's written consent, so a recent-looking rule is worth a second look at how it actually got adopted.
Property management and brokerage work in this county means tracking exactly this kind of shift, at the level of a specific address and a specific covenant, not just at the level of a press release. If you're weighing a rental property in Sandpoint or anywhere else in Kootenai or Bonner County, Citrine Properties CDA can walk through what a given HOA's paperwork actually says before you're the one finding out after closing. Start a conversation with Chelsea and Lance.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
