Executive Overview

Short-term rentals ARE allowed in Red Lodge, MT as of the recent regulatory framework established through Ordinance No. 948. The city has implemented a comprehensive regulatory structure with specific classifications, limitations, and requirements for STR operations. The city council has established a cap limiting STRs to 16% of total dwelling units, with projected increases from 156 to 180 STRs representing approximately 10% of the city's 1,718 total housing units. Current regulations include owner-occupied exemptions, specific response time requirements, and compliance with fire safety codes.

How to Start a Short-Term Rental Business in Red Lodge

Step 1: Property Assessment and Zoning Compliance

First, determine your property's zoning classification, as different zones have varying allowances for STR operations:

• R-1 & R-2 (Low Density Rural/Urban): Residential zoning with STR allowances
• R-3 (Medium Density - Country Club Estates): Specifically allows single-family STRs and day care
• R-4 (High Density): Multiple unit allowances
• C-1, C-2, C-3, C-4 (Commercial zones): Mixed commercial/residential allowances

Important: If your property is governed by a Homeowners Association (HOA), note that HOAs may impose stricter regulations than city policies. The city policy specifically addresses residential zones NOT governed by HOA policies.

Step 2: Classification and Business Model Selection

Red Lodge has established three primary STR classifications:

1. Owner-Occupied: Exempt from threshold limitations
2. Property Manager/Property Management Company: Limited to 55% of total STR threshold
3. All Others: Subject to remaining cap allocation

Step 3: Application and Licensing Process

• Complete annual license review/renewal process
• Apply for any required permits based on your property classification
• Ensure compliance with resort tax requirements
• Establish management response protocols (30-minute verbal response, 60-minute on-site response)

Step 4: Compliance Implementation

• Meet Red Lodge Fire Department regulations and codes
• Implement noise reduction measures (10 PM through 7 AM)
• Establish parking management plans
• Create "Good Neighbor Policy" procedures

Required Documents, Permits, Licenses, and Guidelines

Essential Requirements:

1. Business License: Employee Identification Number required for licensing administration
2. Annual License: Subject to annual review and renewal
3. Resort Tax Registration: Required for all STR operations
4. Fire Department Compliance Certificate: Meeting all Red Lodge Fire Department regulations
5. Zoning Compliance Verification: Based on your property's specific zoning designation

Definition Standards:

• Short-Term Rental: Defined as rentals for 29 consecutive nights
• Response Requirements: 30-minute verbal response capability and 60-minute on-site response capability

Quality of Life Standards:

• Noise reduction protocols during 10 PM through 7 AM hours
• Parking management plans that respect neighborhood equity
• Public health, safety, and welfare compliance measures

Specific Regulations for Short-Term Rentals

City-Level Regulations (Red Lodge):

Operational Limits:

• Total STR cap: 16% of total dwelling units (270 STRs maximum under current capacity)
• Annual cap review process
• Classification-based limitations (Owner-occupied exempt, property managers limited to 55% of total cap)

Performance Standards:

• Fire safety code compliance mandatory
• Noise reduction requirements (10 PM - 7 AM)
• Response time requirements (30-minute verbal, 60-minute on-site)
• Good Neighbor Policy adherence

Grandfather Provisions:

• Current STR operators are grandfathered under previous zoning provisions
• Existing operators have protected status under transition regulations

Zoning District Allowances:

• R-1 & R-2: Low-density residential STR allowances
• R-3: Medium-density specifically permits STRs (Country Club Estates)
• R-4: High-density multiple unit allowances
• C-1 through C-4: Commercial zone STR operations allowed

Enforcement Framework:

• Hotline system for managing complaints
• City software for streamlined compliance and transparency
• Annual review and renewal requirements
• Accountability measures for regulatory compliance

Economic Impact Requirements:

• Resort tax compliance mandatory
• Annual reporting and remittance procedures
• Equity in remitting required resort tax across all operators

State-Level Regulations (Montana)

Note: Specific Montana state-level STR regulations were not detailed in the provided content. The analysis focuses on Red Lodge municipal regulations as requested.

County-Level Regulations (Carbon County)

Note: County-specific regulations were not detailed in the provided content. The analysis focuses on Red Lodge city regulations as they appear to be the primary governing framework.

Contact Information for Local Authority

City Leadership:

Mayor: Kristen Cogswell

• Email: mayor@cityofredlofge.com

Ward 1 Council Members:

• Jenn Battles: jbattlesward1@gmail.com
• Kelly Heaton: heatonward1@gmail.com

Planning Department:

Planning Director: Courtney Long

• Email: clong@cityofredlodge.com

Planning Board & Zoning Commission:

• Chair: Al Bloomer
• Phone: 406-671-2754
• Email: atbloomer@hotmail.com

Source Pages and Reference Materials

Primary Source Document:

• STR Research and Recommendations Presentation: redlodgecce.org/wp-content/uploads/2024/09/str-country-club-presentation-2023.pdf

Additional Reference Materials (as cited in presentation):

• Red Lodge Zoning Regulations (June 2022): Available at cityofredlodge.net/com-dev/page/zoning-regulations-map
• Short Term Advisory Committee Report (December 2022)
• Short Term Advisory Committee Community Survey (November 2022)
• City of Red Lodge Staff – Short Term Rental Summary (January 2023)

Investment Considerations: The regulatory framework shows Red Lodge's balanced approach to STR operations, balancing neighborhood preservation with economic development. The 16% cap provides substantial opportunity while maintaining residential character. The owner-occupied exemption creates advantages for local investors, while the professional management limitation encourages local oversight. The grandfather provisions protect existing investments, and the enforcement framework provides certainty for compliant operators.