City Council approves regulations for short-term rentals

Short-term vacation rentals of homes and residential properties have been a hot-button topic among municipalities of all sizes. This concern prompted the State Legislature to pass laws in 2019 mandating that owners get liability insurance, register the property with the state, meet safety concerns and applicable taxes. Despite short-term rentals involving just 0.8% of the housing supply in Olympia, the City Council took steps it views as ensuring that short-term rentals remain low and regulated.

The new regulations’ goals are to protect affordable housing stock. So-called homestay room rentals where a resident or owner lives on-premise are exempt from the regulations. Still, permits are necessary if the property owner offers both types of rentals. The licenses will help the city accurately track the number of short-term rentals.
What are the new regulations?

Property owners in Olympia will now need to treat these rentals more like an official business:
• Owners will need a permit from the city to rent to guests.
• Owners will need to renew the permit biannually.
• Owners can only rent one- or two-unit properties, but those renting properties with three or more units will be grandfathered in.
• Owners will also need to build additional parking spaces if they rent out two or more bedrooms in their home or an accessory dwelling unit on their property.

There has been some debate regarding the two-unit rule. According to Mayor Pro tem Clark Gilman, who sees short-term rentals as part of the gig-economy, “I think that scale of two units is still appropriate in that world. Someone owning more units than that starts to become a bigger hospitality business, and I don’t think it fits within these guidelines.”

Rather than residents calling 911 to register noise complaints or other violations involving short-term rentals, the City Council will publish a special phone number to field those calls on its website. Along with permits, this will help city officials track and respond to any emerging issues involving short-term rentals.