Landlord training, registry fee created in Sioux Falls amid rise of short-term rental industry
City Council updates rental regulations characterized as 'balancing act'
Sioux Falls landlords who get on the city’s rental registry before next July will not be subjected to a newly established $50 fee.
The Sioux Falls City Council voted unanimously Tuesday night to adopt a new rental registry ordinance that not only creates the one-time fee but also mandates property owners who lease residential units to tenants undergo two hours of landlord training in order to qualify for a city rental permit.
“It’s a balancing act the Council has to do when putting an ordinance like this forward to make sure the heavy hand of government doesn’t stymie the opportunities for investors and for people that might have one house or two houses and with the Airbnb situation and short-term rentals,” said Councilor Curt Soehl, who along with Councilor Rich Merkouris spent months crafting the new rental registry regulations amid the rise of short-term rentals in the community.
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The mandatory training, though, is not required for rental property owners who use a third party to act as a landlord, whether that be an individual licensed as a broker, a broker associate, a property manager, or residential rental agent with the South Dakota Real Estate Commission.
Unlike the city’s prior rental regulations, which lacked an enforcement mechanism, the new ordinance also allows the city planning office to suspend a rental registry license if a property is penalized for three or more nuisance or health violations within a three-year period. The new ordinance also states that short-term rentals — now defined as vacation homes where guests stay for 14 days or less — have both a sales tax license and lodging permit through the state, requirements already found in state law.
Sioux Falls Planning and Development Director Jeff Eckhoff told The Dakota Scout following Tuesday’s vote that his office will now prepare to alert the owners of the existing 7,700 properties already on the registry of the new rules they’re subject to.
Those properties and any new additions to the registry before July 1, 2024, would not be subject to the $50 fee, a deadline set in ordinance and aimed at motivating landlords not to wait to get into compliance with the new regulations. And after July 1, the fee will also be waived for any new construction property that receives a permit before tenants move in.
“My hope is no one ever pays this fee because the next six months the office is so busy,” Merkouris said. “And moving forward, whenever there is new construction — as long as you get that done before occupancy — you don’t have to pay the fee.”