Montana’s AirBnb wars explode as Bozeman city manager is caught on hot mic branding the mayor a ‘small town ****’ – after fighting over wealthy second home owners and rentals

Montana‘s Airbnb wars have reached fever pitch as the idyllic town of Bozeman’s city manager was caught on a hot mic slamming the mayor as a ‘small town ****’.

City Manager Jeff Mihelich was seen in a leaked Zoom this week hitting out at Mayor Terry Cunningham as they continue to clash over potentially banning rentals.

Critics in the town say platforms such as Airbnb are causing a housing crisis in Bozeman, because wealthy homeowners continue to drive up prices by buying second homes in Montana and renting them out for high markups. 

While the mayor has fought the platforms and is intent on introducing the ban, Mihelich appears to be growing frustrated by the delays in growing the town’s economy. 

The pandemic saw wealthy city-dwellers buy up extra homes in tourist hotspots like Bozeman where they could spend lockdown. Figures are correct as of early June.

Bozeman Mayor Terry Cunningham (pictured) is supporting a ban on rental platforms to stem the town’s housing crisis, and told DailyMail.com this month the issue is even leading to declining elementary school admissions

The leaked footage came after a meeting between local Bozeman leaders on Tuesday, after which Mihelich remained on the call with the director of community development, Anna Bentley, while the others left the Zoom. 

After the meeting ended, Mihelich erupted: ‘And I said, is this good enough Terry?’ 

‘Because we’ve got one person in the community, classic small town ****, that they’ll never get over. That doesn’t think we’re doing enough,’ he said. 

The city manager added that Cunningham was ‘supposed to be taking notes’, and lamented over how its ‘not that f****** hard.’ 

While Mihelich’s frustration appears to be growing over the town’s approach to its rental boom, Cunningham told DailyMail.com this month that regulation is the only way to bring normalcy back to its housing market. 

‘Our local elementary school is seeing a decline in kids signing up because there are no families here permanently,’ he said. 

‘Homes are disproportionately owned by retirees and investors – but they won’t staff our workforce.’ 

While devastating to renters, the reasons the rich are flocking to Bozeman are clear. 

The picturesque town is famed for its national parks, white water rivers and snowy peaks, and before the housing boom its properties were enviably cheap.

In January 2020, there were just 500 Airbnb and Vrbo rentals listed in Bozeman, according to data analyzed by Business Insider. At the time, the average house price was $460,000 and a typical rent was $1,000 a month.

Bozeman, Montana, is considering a crackdown on Airbnb after locals complained short-term holiday lets had pushed up prices in the city

Luxury farm rentals are only going up in price in the area, with this property available for almost $250 per night 

This luxury cabin, complete with its own hot tub, is on offer for $395 a night 

Rich homeowners are increasingly turning to Bozeman for their second homes, before leasing them out for a markup. This lavish country rental is up for grabs for $577 per night 

Amid local fury over whether to stem the tide by banning rental platforms, the City of Bozeman released a statement to say it was ‘concerned about the content and tone’ of the clip of Mihelich slamming the city’s mayor. 

‘All members of the Bozeman City Commission have had a chance to review a video circulating on social media involving a discussion between the Bozeman City Manager and a city employee,’ the statement read. 

‘The Commission has considerable concern about the content and tone of this video, and we will be holding a special meeting to discuss this subject. 

‘As soon as we are able to coordinate a meeting date and time, we will issue an agenda including how the public can participate.

‘We take seriously our charge that all of those in city leadership should model our stated values of professionalism and integrity, and anything that detracts from those values is a disservice to the public.’ 

The housing market boom appears to have been fueled by the pandemic, as wealthy city-dwellers looked to states such as Montana to ride out lockdowns. 

By October 2020, the number of Americans buying second homes had doubled from the same month a year earlier, data from Redfin shows. 

Today, the number of vacation rentals in Bozeman has risen to 945 – costing $285 a night on average – according to Airdna analysis from early June.

Property prices subsequently shot up 41 percent to $647,146 and monthly rents have increased 80 percent to $1,800, figures from Zillow and Zumper show.

While some locals say they have been priced out of renting – let alone buying – some in the community stress that tourism is one of the centerpieces of its economy. 

Millions of tourists visit Bozeman every year to see attractions such as the iconic Yellowstone National Park and the Big Sky report.

The Bozeman Chamber of Commerce estimates these travelers support 30,000 jobs and generate $200 million in tax revenue.

Local realtor Tamara Williams – who has worked with second homeowners – is among those who does not think a clampdown on vacation lets will help residents.

She told Dailymail.com: ‘Personally I don’t back it. Bozeman has always had a high proportion of second homeowners and properties have always been expensive.

‘I don’t think it’s that big a deal. Restricting them in some capacity might be more helpful.’

An activist group of 150 renters called Bozeman Tenants United was set up in 2020 to address the issue

In February the group hosted a townhall where almost 300 local residents turned up. Pictured: members of Bozeman Tenants United 

Amid growing resentment over the housing crisis, Bozeman residents are fighting back. 

An activist group of 150 renters called Bozeman Tenants United was set up in 2020 to address the issue and in February it hosted a townhall where almost 300 local residents turned up.

Now the city commission has been receiving public comments from residents, hosts and property management companies about how to manage short-term rentals.

During a hearing last month, one resident said: ‘It feels like the local community has withered away over the years.

‘When I visit my home now in the summer, I don’t see many neighbors hosting BBQs for friends or kids playing in the neighborhood park.

‘I barely see people out walking their dogs anymore. And many of the houses are seemingly empty for most of the year.’

He added: ‘This vibrant neighborhood I grew up in feels more like a seasonal resort and I’ve watched my childhood friends and family be pushed out.’

A cabin in the city, pictured, is currently listed on Airbnb for $192 a night

The city commission has been receiving public comments from residents, hosts and property management companies about how to manage short-term rentals. Pictured: Bozeman, Montana

Republican Representative Jane Gillette (pictured) is among those spearheading greater regulation 

As local leader mull over a ban, a variety of measures have been floated – including whether to cap the number of vacation rentals allowed in the city or ban them altogether.

Any decision would exclude homeowners who live there permanently but just rent out part of their house using Airbnb or Vrbo.

Other suggestions include imposing ‘temporary zoning districts’ which would restrict vacation lets to a certain part of town.

And short-term rental owners in the area could even be slapped with extra taxes.

Republican Representative Jane Gillette this year proposed House Bill 430 which would increase state taxes on short-term rentals by 0.25 percent.

The proposal also called for grants to be handed to second homeowners who choose to rent their property to a local.