Short-Term Rentals in Yellowstone County, Montana

Ordinance 2131: a permit, a business license, and rules on what counts as rentable space

The City of Billings adopted Ordinance 2131 in 2021, establishing that any residential property rented for a stay of less than 30 days inside city limits -- what the ordinance treats as a guest home or tourist home -- needs both a Short Term Rental Permit and a City of Billings business license before it can legally operate. The rule caps a single dwelling at one short-term rental permit, and it limits rentable space to habitable areas of the home; accessory structures (a detached garage converted to a guest suite, for instance) are not eligible for short-term rental use under the ordinance as written. If you're evaluating a property specifically for its short-term rental potential, confirm both the permit-eligible square footage and whether any existing accessory-structure rental setup would actually be compliant, rather than assuming an existing listing's current use is legal.

A real, documented compliance gap -- worth checking before you buy a "turnkey" listing

As of city enforcement reporting in early 2025, roughly 170 Billings properties were confirmed compliant with the short-term rental ordinance, while more than 300 properties were identified as operating without the required permit or business license -- a substantial gap that prompted the city to actively reach out to noncompliant hosts. That's directly relevant if you're buying a property marketed as an established, income-producing short-term rental: an existing booking history and reviews on a hosting platform are not proof that the property carries a valid city permit and business license. Ask the seller directly for both, and independently confirm current status with the city rather than relying on the listing's own representation.

Because the ordinance is enforced by the city rather than by hosting platforms automatically screening for compliance, a non-compliant property can continue to accept bookings for some time before enforcement catches up -- which means a buyer inheriting that property's rental operation could also be inheriting an active or pending compliance issue, not a clean slate.

This is a city rule -- outside Billings, the county has essentially nothing parallel

Ordinance 2131 and its permit, business-license, and habitable-space requirements apply specifically inside Billings city limits. As the hub explains, Yellowstone County does not issue building permits of any kind outside Billings, and most of the county's land outside the roughly 4.5-mile Unincorporated Jurisdictional Area carries no zoning at all beyond a handful of citizen-initiated special districts. This research found no parallel county-level short-term rental permitting or business-license regime for unincorporated Yellowstone County land -- which means a rural cabin or acreage well outside Billings is, at least at the county regulatory level, operating in a much less defined space than a property inside city limits, for better or worse. Before assuming either a Billings-style permit requirement or a permit-free environment applies to a specific parcel, confirm with the joint City/County Planning Division exactly which side of the city limits (and, if relevant, the UJA boundary) the property sits on.