Editor’s Note: For all the cities eager to work with short term rental companies like Airbnb, many local governments are apprehensive. The insights from a community planning practitioner’s blog post below offer a view into the details of established short term rental regulations — from strict to lenient.
Reprinted with permission from Municipal Research and Services Center (MRSC).
Updated July 8, 2020
The issue of internet-based, short-term vacation rentals has been in the news for a few years now. From the consumers’ perspective, they are more popular than ever, but many local governments are still wrestling with questions about whether this industry should be regulated and, if so, how?
For communities in Washington State (and elsewhere) without an active tourist market, short-term rentals are not a major issue and those local governments don’t usually have regulations addressing them. For those local governments with a significant number of tourists or transient visitors, however, these jurisdictions either already have regulations in place or are contemplating adopting them.
Kirkland and Walla Walla recently adopted new regulations on short-term rentals. Other cities, such as Seattle and Bellingham, are currently developing regulations for these types of rental properties. A recent public radio feature segment highlighted a referendum placed on Gearhart, Oregon’s November 7, 2017, ballot by vacation rental property owners that would’ve repealed and replaced that town’s short-term vacation rental regulations with less restrictive ones. The referendum was defeated by a reported vote tally of 77 percent against and 33 percent in favor of repeal.
Summary of Local Government Issues/Concerns
Most local governments’ concerns about short-term rentals fall into at least one of the following categories:
- Collection of lodging and sales tax on these short-term rental stays
- Mitigation of traffic, parking, noise and other impacts on the surrounding neighborhood
- Compliance with life/safety standards that are commonly applied to other types of lodging establishments (such as hotels, motels and bed-and-breakfasts)
Another issue of increasing concern is the impact of short-term rentals on a community’s affordable housing supply. In this case, the concern isn’t necessarily about a homeowner renting out a room or backyard cottage to help with monthly mortgage payments. Instead, local governments fear that property owners will purchase residential units and rent them out on a short-term basis to out-of-town visitors, thereby taking them out of the year-round rental housing supply.
In fact, Vancouver, British Columbia, just passed regulations allowing homeowners or renters to rent out some or all of their principal home, but prohibits the rental of a secondary residence or a “laneway home” — what we in the U.S. would call a detached accessory dwelling unit (ADU) or a backyard cottage. A major driver for that action was the concern about the impact of short-term vacation rentals on the city’s already tight rental housing market.
Regulatory Examples
The following examples from local governments span the spectrum jurisdictions have taken on short-term rentals, from a strict approach to those that only lightly regulate them.
Washington State Examples:
Ilwaco’s Municipal Code allows vacation rentals as a conditional use in single-family, residential zones and as a permitted use in other specified zones, and sets minimum standards for rentals to maintain in Chapter 15.41.
Leavenworth’s Municipal Code Chapter 18.52, Section 120 allows “bed-and-breakfasts” as a conditional use, so long as the owner resides on the premises during a visitor’s stay, and the operation meets other standards.
Poulsbo’s Municipal Code Chapter 18.70 (Residential Districts), Section 070 states “an ADU may not be used as a short-term rental and must be rented for a minimum of 90 days or more.”
San Juan County’s Municipal Code Chapter 18.40, Section 270 establishes standards for use of single-family residences and ADUs as short-term rentals.
Spokane’s Short-Term Rentals webpage describes that city’s standards for two categories of short-term rentals:
- Type A, which requires an administrative permit, where bedrooms or an entire dwelling unit can be rented but commercial meetings are prohibited
- Type B, which requires a type III conditional use permit, where bedrooms or an entire dwelling unit can be rented and commercial meetings are allowed
Finally, Westport’s Municipal Code Chapter 17.22 on Vacation Rental Dwellings addresses its standards and permitting requirements for short-term rentals.
Other Examples:
Boulder’s (CO) Short-Term Rentals webpage includes a link to a short-term rental license application packet.
Durango, Colorado maintains a Vacation Rental Information webpage that details a relatively strict rental code, including a maximum number per block/intersection for designated residential areas. The city requires a rental license, which can be revoked if the Land Use Development Code is violated. The Land Use and Development Code, Section 2-2-3-4, Subsection G outlines the variety of standards vacation rental homes must meet. For more information on the city’s regulatory strategy, check out the following presentation made by Durango City Planner Phillip Supino: Preserving Housing through Short Term Rental Regulation
San Francisco’s Office of Short-Term Rentals webpage includes a lot of links to good information about local requirements. In order to legally rent a home as a short-term rental (less than 30 nights), a property owner must meet several conditions, including the following:
- You must be the permanent resident of the unit that you wish to rent;
- You must register as a business;
- You must become a certified host; and
- You may rent a portion of your residence for an unlimited number of nights if you (the owner) are also present, but there is a maximum of 90 unhosted nights per calendar year.
In conclusion, if you are considering short-term rental regulations for one or more of the reasons described above, there are a lot of local government examples available for review.
