🎯 STRisker: Bulletin - Rapid City, SD
Setting the Ground Rules: Rapid City’s STR Ordinance Clears First Hurdle
Rapid City Moves Toward Its First STR Rulebook
Rapid City took an important step toward shaping the future of short-term rentals as its Legal and Finance Committee held the first reading of a sweeping ordinance that would establish the city’s first local regulations for vacation homes. With an estimated 600 to 1,000 STRs active at any given time, officials say the need for structure has become too large to ignore.
A surge in STR listings over the past few years prompted several council members to ask for a formal ordinance to bring order and clarity. To build it, the city formed an 18-member advisory group made up of hosts, neighborhood advocates, housing organizations, hotel industry representatives, and state Rep. Mike Derby.
One of the most striking findings that shaped the committee’s work came from Community Development Director Vicki Fisher, who shared that fewer than one percent of vacation homes within city limits have secured the state lodging license required under South Dakota law. The proposed ordinance aims to change that by requiring the license and pairing it with annual city registration, ensuring that every STR meets basic safety and reporting standards.
The plan would allow vacation rentals in any zoning district where residential uses are already permitted. In addition to the lodging license and registration, operators would need to provide:
âś… Two dedicated off-street parking spots
âś… Occupancy capped at two guests per bedroom, plus two more
âś… A conditional use permit for homes featuring more than five bedrooms
The occupancy cap drew particular focus during the meeting. While city staff initially suggested exempting children from the count, committee members held firm on a standard that applies to all guests equally.
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For committee member Pat Roseland, the emphasis on safety remained a top priority. He said the new requirements will give visitors confidence that the homes they book are operating responsibly and meeting basic safety expectations.
If ultimately approved by the City Council, the ordinance provides a six-month onboarding window so current operators can meet the new requirements without rushing. The regulations apply solely to whole-home rentals; owner-occupied stays will continue to be regulated separately as traditional bed-and-breakfast operations.
The Legal and Finance Committee moved the ordinance along without recommendation, handing the City Council the next move as Rapid City continues charting the future of its rapidly expanding vacation rental market.
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