Unlawful short-term leases in Deadwood addressed, progress made | Native Information

DEADWOOD — Deadwood Planning and Zoning Administrator Jeramy Russell is highly enthusiastic about strides the city has made in addressing its illegal short-term rental issue.

“We’re getting there,” Russell said. “It’s exciting. I’m one person in my job, so, unless you’re on it every day, and this is before we partnered with Hamari, you’d literally have to be on it every day, searching all these web sites. It’s impossible. It really is, when you consider everything else that goes along with this job.”

When it comes to ordinance violations and illegal short-term rentals, Deadwood’s Presidential District was the most problematic, with the most infractions.

“There were quite a few on Williams Street, as well,” Russell said. “One, being the Presidential area. Two, being the Williams Street, Centennial areas up there.”

On Jan. 4, the Deadwood City Commission approved a $5,500 agreement with Hamari Solutions, a third-party company that helps municipalities regulate short-term rentals, that went into effect Jan. 1.

“When I first started investigating these third-party companies, we were approximately 300 vacation rentals, here in Deadwood and as we got our partnership in place with Hamari and they took over on Jan. 1, we were about 130 to 160 and as of Friday, we’re down to 65. Of those 65, only 15 are completely out of compliance, so we’ve got that way down. We’re very, very happy with that,” said Deadwood Planning and Zoning Administrator Jeramy Russell. “A lot of work, the staff still has to be involved in it, but it’s much easier for us because they do all the grabbing of that information for us. They scan AirBnB and VRBO and Craig’s List and Facebook. All these places where people market and they package it up for us. They tell us where the house is at, who the owner is, where they live at, how we contact them.”

Russell said that type of assistance is huge in addressing the problem.

“Because some of these people know how to work the system,” he said. “And they’ll only market late at night, where we don’t see them, where this catches them.”

Russell then runs a report, which lists the infractions and the city begins the process of addressing the ordinance violation.

“We have a first letter that goes out from me and then our second letter comes from the city attorney and then after that, it would go through the litigation process, which could be a Class 2 misdemeanor, which I hope we don’t ever have to do that, you know, take somebody to court,” Russell said.

A Class 2 misdemeanor is punishable by up to 30 days in the county jail and/or a $500 fine per infraction.

Russell said the next step will likely be incorporating some sort of licensing.

“That doesn’t mean opening the town up or anything like that, but it’s a way for us to track them,” he said. “Because you have two sections – you have illegal vacation rentals that are in residential and residential 2, where you just cannot do them. Those are completely illegal. But then you have other zoning classifications around town – commercial, commercial highway, even a PUD … but those people still have a process to go through. They can’t just say, ‘We’re zoned good, so we can do it.’ No, they have to make sure they’re paying their BID tax, BID 1-6, they have to make sure they have commercial rates for their water, sewer, and their garbage. They have to have their state excise tax number. They have to have their inspection from the Department of Health, so there’s a list of things they have to do.”

Russell directed those interested in offering short-term rentals in Deadwood to the city’s web site under Planning and Zoning.

“So people have an idea of what they have to do,” he said. “If you’re zoned commercial, this is what you have to do. Go to the Planning and Zoning web site, short-term rentals, follow those steps.”

The city of Deadwood’s ordinance governing short-term rentals prohibits transient use of commercial residential property.

“You can’t do it in R-1, which is residential or R-2, which is residential multi-family,” Russell said. “The Presidential area, you can’t do it. The Williams Street area, you can’t do it. Burnham and McKinley area, you can’t do it.”

Areas that include a lot of mixed use, for example, the area along Sherman Street that turns into Cliff and Charles, may allow short-term rentals.

“There are areas of residential houses that you can do it,” Russell said. “They’re just not zoned residential. They’re zoned commercial highway.”

Short-term rentals are currently prohibited by ordinance in areas zoned Residential (Chapter 17.53 TRANSIENT COMMEERCIAL USE OF RESIDENTIAL PROPERTY—PROHIBITED).  

The purpose of Deadwood’s ordinance is to preserve and enhance the character of the residential districts.

The ordinance defines transient commercial use of property as the commercial use of a residential property for bed and breakfast, hostel, hotel, inn, lodging, motel, resort or other transient lodging uses where the term of occupancy, possession or tenancy of the property is for less than 30 consecutive calendar days.

The ordinance prohibits such use of property in the residential land use district. The exception is 14 days of less during the month of August, starting four days preceding the start of the Sturgis Motorcycle Rally each year. Bed and breakfasts also have different definitions and rules.

The penalty for violating the ordinance is a fine of $200 per day.

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