Executive Overview

Short-term rentals ARE permitted in Watford City, North Dakota. However, as of the latest available information (January 2025), Watford City does not have specific local ordinances governing short-term rentals beyond standard zoning requirements. All short-term rental properties must comply with existing zoning laws, building codes, and North Dakota state regulations.

Starting a Short-Term Rental Business in Watford City

Market Context

Watford City presents a unique short-term rental market primarily driven by:

• Oil Industry Demand: The city sits in the heart of the Bakken oil region, creating consistent demand from transient oil workers and business travelers
• Tourism: Proximity to Theodore Roosevelt National Park and Maah Daah Hey Trail attracts outdoor enthusiasts
• Cyclical Nature: Market demand fluctuates with oil industry cycles and seasonal tourism patterns

Step-by-Step Launch Process

1. Property Acquisition & Zoning Verification

   • Verify your property is zoned for short-term rental use
   • Confirm compliance with building codes and safety standards
   • Review zoning district requirements (see regulations section below)

2. Permit Applications

   • Obtain all necessary building and development permits
   • Submit site development plans if required (see permitting section)

3. State Tax Registration

   • Register with North Dakota Office of State Tax Commissioner
   • Set up systems for collecting and remitting the 7% state lodging tax

4. Property Preparation

   • Install required safety equipment (smoke detectors, carbon monoxide detectors, fire extinguishers)
   • Ensure compliance with housing and building codes
   • Prepare property with appropriate amenities for target market

Required Documents, Permits, and Licenses

Local Requirements

• Building Permits: Required for any structural modifications or new construction
• Development Permits: Required before initiating development activities
• Site Development Plans: Required for multifamily dwellings, commercial uses, and conditional uses
• Certificate of Final Inspection: Required after construction completion

State Requirements

• North Dakota State Lodging Tax Registration: Mandatory 7% tax collection and remittance
• Business Registration: Standard business licensing through North Dakota Secretary of State

Federal Requirements

• EIN (Employer Identification Number): Required for tax reporting purposes
• 1099 Reporting: Income reporting requirements for platforms like Airbnb

Specific Regulations by Jurisdiction

Watford City Municipal Regulations

Definition of Short-Term Rental: "A Dwelling Unit, or portion thereof, which provides overnight lodging to the traveling public for compensation for a period of less than 30 consecutive days. Any lodging Use with more than five bedrooms or that accommodates more than 16 occupants shall be considered a Hotel and shall be required to comply with all regulations for Hotels."

Key Zoning Considerations:

• Short-term rentals must comply with underlying zoning district requirements
• Properties with 5+ bedrooms or 16+ occupants are classified as Hotels
• Site Development Plans required for multifamily STRs and commercial zoning districts

Permitting Requirements:

• General permitting requirements apply to all development activities
• Site Development Plans required for properties in R-3, R-4, C-1, CB, I-1, I-2 districts
• Conditional Use Permits may be required for specific zoning scenarios

McKenzie County Regulations

No county-specific short-term rental regulations were identified in the provided materials. County regulations would primarily apply to properties in the extraterritorial area (ETA) extending up to 2 miles from city limits.

North Dakota State Regulations

Lodging Tax: 7% state lodging tax must be collected from guests and remitted to the North Dakota Office of State Tax Commissioner

Building and Safety Standards:

• Properties must meet North Dakota building codes
• Smoke detector and carbon monoxide detector requirements
• Fire safety equipment standards
• Housing code compliance for rental properties

Business Licensing:

• Standard business registration requirements
• Tax reporting obligations for rental income

Best Practices for STR Operations

Property Features That Succeed in Watford City

• High-speed Wi-Fi: Essential for business travelers and remote workers
• Ample Parking: Crucial for oil workers with large vehicles
• Flexible Check-in/Check-out: Accommodates irregular work schedules
• Fully Equipped Kitchens: Allows guests to prepare meals
• Laundry Facilities: Important for longer stays by oil industry workers
• Outdoor Spaces: Patios, fire pits for guest relaxation and socializing

Seasonal Considerations

• Summer Peak (May-August): High tourism demand from outdoor recreation
• Winter Lows (November-March): Reduced tourism but steady oil industry demand
• Pricing Strategy: Implement dynamic pricing that accounts for oil industry cycles and seasonal variations

Operational Challenges

• Weather Maintenance: Robust maintenance plans required for harsh winter conditions
• Supply Chain Management: Ensure reliable cleaning and maintenance services
• Staffing: Build relationships with local service providers

Contact Information for Local Authorities

City of Watford City

Mailing Address: City of Watford City P.O. Box 494 Watford City, ND 58854

Physical Address: 213 2nd St. NE Watford City, ND 58854

Phone: (701) 444-2533 Fax: (701) 444-3004 Website: cityofwatfordcity.com

Key Contacts:

• City Planner: Jake Walters - jwalters@nd.gov - (701) 444-8402
• Planning Administrative Assistant: Kaitlyn Swearson - kaswearson@nd.gov - (701) 444-8406
• Building Inspector: Steve Williams - Contact through City Hall
• City Attorney: Wyatt Voll - Contact through City Hall

McKenzie County

Phone: (701) 444-3331 Website: mckenziecounty.nd.gov

North Dakota State Tax Commissioner

Phone: (701) 328-1242 Website: www.nd.gov/tax Email: taxrep@nd.gov

Source Documents and References

1. Watford City Planning and Zoning Commission Meeting Minutes (February 24, 2025) - Watford City Official Documents

2. Watford City Land Development Ordinance - Article 2: Rules and Definitions - Defines short-term rental requirements and zoning compliance standards

3. Summer Vacation Rental Market Analysis - Provides market context and regulatory overview: GoSummer.com - Watford City STR Guide

Regulatory Monitoring Recommendations

Ongoing Compliance: Watford City is actively updating its zoning ordinance, with significant changes anticipated in 2025. The Planning Commission is reviewing amendments to Articles 1-34, including specific short-term rental provisions. Investors should monitor:

• Monthly Planning & Zoning Commission meetings (typically last Monday of each month)
• City Council meetings for ordinance adoption
• Updates to the Watford City Land Development Ordinance

Contact Strategy: Regular communication with City Planner Jake Walters (jwalters@nd.gov) is recommended for staying current on regulatory developments and ensuring ongoing compliance.

This guide is current as of January 2025. Short-term rental regulations are evolving rapidly, and investors should verify current requirements with local authorities before making investment decisions.