Executive summary: Short‑term rentals are allowed in Lava Hot Springs. Under Idaho Code §§ 67‑6539 and 63‑1803, cities may not prohibit short‑term or vacation rentals—only impose reasonable health/safety rules. The city’s former Ordinance 2006‑5, which barred non‑owner‑occupied STRs in residential zones, was invalidated by the Idaho Supreme Court in 2025. However, the city is in a temporary moratorium period that pauses processing new business licenses for STRs while it crafts a new ordinance. Investors should monitor city updates and be ready to apply once the moratorium lifts.

1) Are short-term rentals allowed in Lava Hot Springs? (Explicit answer)

• Yes—Idaho law prohibits municipalities from banning short‑term or vacation rentals. Ordinance 2006‑5, which allowed only owner‑occupied “bed and breakfast” STRs in residential zones and prohibited non‑owner‑occupied “vacation rentals” there, was struck down by the Idaho Supreme Court in Idaho Association of Realtors, Inc. v. City of Lava Hot Springs (2025). The court held the ordinance had the practical effect of prohibiting a category of short‑term rentals, violating Idaho’s Short‑term Rental and Vacation Rental Act. The court also affirmed that cities may adopt reasonable regulations for health and safety.
• Today, STRs remain subject to reasonable regulations and licensing. A city‑wide moratorium temporarily halts the processing of new business license applications for STRs while the city develops a new ordinance.

Reference: Idaho Supreme Court opinion (case no. 50888) — law.justia.com/cases/idaho/supreme-court-civil/2025/50888.html

2) How to start a short‑term rental business in this market

• Confirm your property’s zoning and permissible use under city zoning maps/ordinances.
• Check the moratorium status on the city website. The city posted Resolution 2025‑004 imposing a 182‑day moratorium on processing STR business license applications; this appears to run roughly May–November 2025. Prepare all documentation now so you can submit immediately after the moratorium ends.
• Draft operations and compliance materials (house rules, emergency plan, contact information, guest communication, trash/parking/noise protocols).
• Secure insurance appropriate for STR operations and verify your property’s compliance with building, fire, and health standards.
• If you plan to collect and remit state lodging taxes, register with the Idaho State Tax Commission.
• Apply for a city business license and pay any required fees once the moratorium is lifted and the new ordinance is in force.

Notes:

• City Hall is open 9:00 am–2:00 pm; the city offers online payment for business licenses and fines (transaction fee applies).
• The city indicates it will propose Title 3, Chapter 5—Short‑Term Rentals, with new definitions, standards, and compliance provisions, following a public hearing process.

3) Required documents, permits, licenses, and guidelines

• City business license (STR category) — required to operate. A moratorium is currently in place; expect the license application to be accepted after the new ordinance is adopted.
• Compliance with occupancy, fire, building, and life‑safety standards — the city’s prior occupancy ordinance is on the books; specifics under the new ordinance will govern once enacted.
• Property documentation — ownership or lease authorization; emergency procedures and contact information; posted rules for guests.
• State lodging tax registration — recommended (Idaho Code §§ 63‑1801 to 63‑1804). The city’s Local Option Tax updates apply to lodging businesses; confirm current forms and rates on the city’s website.
• Fees — business license fees and other city fees are set by Resolution 2024‑01 and may be updated; pay via the city’s online portal or in person.

Guidance on reasonable regulations:

• The Idaho Supreme Court emphasized that any city regulations must not constitute express or practical prohibitions on any type of short‑term rental. Rules should focus on clear, objective standards to safeguard health, safety, and neighborhood integrity (e.g., occupancy limits, fire/life‑safety, parking, noise, trash).

4) Specific regulations for short‑term rentals

City level:

• Ordinance 2006‑5 (Vacation Rental Ordinance) is invalidated. The city has imposed a 182‑day moratorium on processing business licenses for STRs while drafting a new ordinance (Resolution 2025‑004).
• Ordinance 2023‑2 (Occupancy Ordinance) provides occupancy-related rules, which likely apply to STRs. The new STR ordinance is expected to harmonize definitions, management standards, and compliance requirements.
• Fee structure: Resolution 2024‑01 sets various fees, including planning/development, building, fire services, copies, maps, and public records; it is the operative fee schedule pending further updates.

County level:

• No specific Bannock County STR regulations are provided in the content. County-level rules, if any, are not documented here and should be confirmed directly with the county.

State level:

• Idaho Code §§ 67‑6539 and 63‑1803: Cities and counties may not prohibit short‑term or vacation rentals; they may impose reasonable regulations for health, safety, and neighborhood integrity. STRs are classified as residential land uses for zoning purposes subject to applicable zoning.
• The city’s approach must comply with the Supreme Court’s ruling—restrictions cannot amount to express or practical bans on non‑owner‑occupied STRs in residential zones.

5) Local authority contacts

• City of Lava Hot Springs

  • Address: PO Box 187, 115 W Elm Street, Lava Hot Springs, ID 83246
  • Phone: (208) 776‑5820
  • Fax: (208) 776‑5130
  • Email: lavahotspringscity@gmail.com
  • City Hall Hours: 9:00 am–2:00 pm
  • Online payments (business licenses and fines): See city website payment portal (3% of subtotal + $1 transaction fee)
  • Planning & Zoning: See city website Planning & Zoning section

• City Clerk (public hearing/public records contact for the pending STR ordinance)

  • Email: cityclerkamantha@outlook.com

6) Source pages

• Idaho Supreme Court Opinion — law.justia.com/cases/idaho/supreme-court-civil/2025/50888.html
• Idaho Reports coverage — blog.idahoreports.idahoptv.org/2025/05/23/cities-cannot-limit-vacation-rentals-based-on-owner-occupancy-supreme-court-rules/
• City Zoning Ordinance — www.lavahotspringscity.com/zoning-ordinance
• City homepage (moratorium, public hearing, ordinances, fees, payments) — www.lavahotspringscity.com/
• Lava Hot Springs Zoning Ordinance (PDF) — irp-cdn.multiscreensite.com/5d7d58d9/files/uploaded/Zoning%20Ordinance.pdf
• Ordinance 2006‑5 Vacation Rental Ordinance (PDF) — irp-cdn.multiscreensite.com/5d7d58d9/files/uploaded/20201102131036662.pdf
• Ordinance 2023‑2 Occupancy Ordinance (PDF) — irp.cdn-website.com/5d7d58d9/files/uploaded/Occupancy%20Ordinance%202023-2.pdf
• Resolution 2025‑004 (STR Moratorium) (PDF) — irp.cdn-website.com/5d7d58d9/files/uploaded/Resolution_2025-004_IMPOSING_A_TEMPORARY_MORATORIUM_ON_ACCEPTING_OR_PROCESSING_BUSINESS_LICENSE_APPLICATIONS_FOR_BED_AND_BREAKFAST_OR_VACATION_RENTAL.TOURIST_HOMES.pdf
• Resolution 2024‑01 (Establishing/Renewing/Amending Fees) (PDF) — irp.cdn-website.com/5d7d58d9/files/uploaded/Resolution_2024-01_-_ESTABLISHING-ESTABLISHING-_RENEWING- AND_AMENDING_FEES_SIGNED_new_document_replaced_Chubuck_with_city_of_lava_hot_spring.pdf
• Idaho REALTORS Advocacy Update — idahorealtors.com/advocacy-update-lava-hot-springs/