"Although I realize that we have to comply with state law, I think this House Bill 583 was some of the worst legislation I've ever seen." Sandpoint Mayor Jeremy Grimm said that to his own City Council on May 20, 2026, moments before voting to repeal the short-term rental ordinance his city had spent years building. Council President Deb Ruehle cast her vote the same night, calling it "disgusting and apprehensive." Councilor Kyle Schreiber called the law "short-sighted." All of them voted for it anyway, because after July 1 they had no legal choice.
If you are looking at a Sandpoint property with an eye toward short-term rental income, this is the part of the story that matters to you: the city's cap, its permit process, and its occupancy reporting requirement are gone. But that does not mean every property in Sandpoint is now open for Airbnb business. The rule that actually decides whether you can rent your place by the week just moved out of City Hall and into a document most buyers never ask to see until it's too late: the subdivision's or condo association's covenants.
What Idaho's New Law Actually Removed
House Bill 583 was signed by Governor Brad Little on March 16, 2026, and took effect July 1, 2026. It amended Idaho Code Section 67-6539 to bar cities and counties from regulating short-term rentals any differently than they regulate other residential properties. It passed the Idaho House 54-16 and the Senate 23-12.
Before the law took effect, Sandpoint's ordinance capped non-owner-occupied short-term rentals at 35 units citywide, with exceptions for developments of at least 10 units, properties adjoining the waterfront, and properties within 1,500 feet of the downtown core. That cap, the permit application that came with it, and the city's ability to require occupancy reporting are no longer enforceable. Sandpoint's Planning and Community Development Director, Jason Welker, told the Planning and Zoning Commission in December 2025 that the city was already on notice it would be sued if the cap stayed in place, months before the Legislature made the question moot.
Here is what actually changed at the local level.
| Before July 1, 2026 | After July 1, 2026 |
|---|---|
| City-issued STR permit required | No permit, license, fee, or registration required by the city |
| 35-unit citywide cap on non-owner-occupied STRs | No cap on STR density |
| Occupancy category system and city-defined "neighborhood integrity" standard | Not enforceable as an STR-specific standard |
| Parking requirements tied to guest count | Only general residential parking rules apply |
| City STR permit could be revoked for violations | City can still cite for noise, parking, or nuisance under ordinances that apply to any home |
What stayed in place: smoke alarms in sleeping areas, a carbon monoxide detector and fire extinguisher on each floor, removable escape ladders where required, and occupancy limits tied to the International Building Code. Sandpoint's 14% local option short-term rental occupancy tax also continues under city code, collected either by the platform (Airbnb, Vrbo) or, for direct bookings, by the owner.
The Document the Statute Doesn't Touch
Here is the piece of this story that gets skipped in most coverage of HB 583, and it's the piece that matters most if you're actually closing on a property here.
State preemption applies to government ordinances. It does not apply to private contracts. A homeowners association's covenants, conditions, and restrictions are an agreement between owners, not a city regulation, and HB 583 has no authority over them. If the HOA governing a Sandpoint condo building or subdivision already restricts or bans rentals under 30 days, that restriction is untouched by the new law and remains fully enforceable regardless of what City Hall can or can't do.
This cuts both ways for a buyer. A property inside city limits that would have needed a permit under the old system might now be open for STR use with no city process standing in the way. The same property, if it sits inside an association with a rental restriction in its governing documents, may be just as closed to short-term rentals as it was in 2024. The zoning map answers a different question than the one you're actually asking.
This is worth sitting with for a moment, because it inverts the story most people assume. "The state deregulated short-term rentals" sounds like it should make more properties available for STR use. In practice, it just changes who is doing the regulating. For properties without an HOA, or with one that's silent on the issue, the practical effect is closer to what the headlines suggest. For properties inside an association with an existing rental clause, the city stepping back doesn't open anything. It just means the HOA board, not a city planner, is now the only party checking.
What This Looks Like at the Property Level
Before treating any Sandpoint listing as an STR opportunity, there are a few documents worth pulling that have nothing to do with the state law:
- The CC&Rs, in full, not the summary. Some associations distinguish between "rental" and "short-term rental" with different minimum lease terms. Read the actual defined terms.
- Board meeting minutes from the past year. Associations that were quiet on STRs while the city still had a permit system in place may be actively drafting their own restriction now that they know the city can't do it for them.
- Whether the property is inside city limits or unincorporated Bonner County. The two jurisdictions handle zoning and permitting differently, and a property just outside the city boundary may answer to Bonner County Planning and Zoning rather than Sandpoint's Planning and Community Development office.
- Who is remitting the lodging tax. If a booking runs through a marketplace like Airbnb or Vrbo, the platform generally collects and remits the city's occupancy tax. If you plan to book directly, that responsibility falls on you, and it doesn't go away just because the permit did.
- Septic and well capacity, for properties outside the city sewer system. Guest count that exceeds what the system was designed for is a health standard, and health and safety rules are exactly the category HB 583 left in cities' hands.
What It Means If You're Already Renting
If you own a Sandpoint property that operated under the old permit system, the practical burden on you just got lighter in one sense. You're no longer filing for a city STR permit or watching a cap that might have shut out a future renewal. But the tax filing obligation with the city's Finance Department hasn't moved, and if your property sits inside an HOA, nothing about your legal footing there has changed at all. An owner who was compliant with a city permit and a quiet HOA in 2024 is in the same position they were before, just with one fewer piece of paperwork.
If you're weighing whether to sell an income property here, know that this law is fresh enough that not every buyer understands what changed. Some will assume the whole regulatory picture opened up statewide. Framing a listing honestly around what actually transferred, city rules versus association rules versus the tax obligation, tends to attract a buyer who won't be surprised six months in.
Two Things the New Law Doesn't Answer
Does this affect a property in unincorporated Bonner County the same way? Largely yes. HB 583 applies to counties as well as cities, so Bonner County's planning department is under the same preemption for STR-specific rules. But county parcels carry their own considerations around septic, well capacity, and road access that a city lot doesn't, and those are still enforceable as health and safety standards.
Could the Legislature revisit this next session? Possibly. Governor Little told the Bonner County Daily Bee in April 2026 that the bill's own sponsors, including Rep. Jordan Redman of Coeur d'Alene, acknowledged HB 583 "wasn't perfect" and committed to revisiting the issue. Nothing in that conversation suggests a return to city-level caps, but it's a reminder that this is a young law, not settled ground.
None of this is a substitute for reading your own title report and a licensed attorney's read on a specific HOA's covenants. But if you're evaluating a Sandpoint property with rental income in mind, the state law is the easy part to research. The harder part, the one that actually decides your answer, is sitting in a binder from the last time the association updated its bylaws.
If you're weighing a Sandpoint purchase with rental income in the picture, or you already own a property here and want a clear read on how this changes your position, Tanya Beebe can walk through what a specific property, its HOA, and its parcel location actually mean for you. You can also start by browsing homes in Sandpoint or learn more about working together on the buyer or seller side. Let's Connect.
