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Seattle legislation would give regulating short-term rentals another try

This time, the ordinance would limit properties, not nights

Tim Franklin Photography

City Councilor Tim Burgess has come back to the table with a revised proposal to regulate short-term rentals.

Here’s the issue: Seattle has a problem creating enough long-term rental stock to meet demand in a rapidly-growing city. Last year, our vacancy rate was at 3.5 percent—a teeny-tiny number, but still our highest rate since 2010.

Meanwhile, short-term rental platforms like Airbnb and VRBO are exploding in popularity. Last year, a report from Puget Sound Sage found that with the rate of growth at the time, as many as 1,600 long-term rentals could be taken off the market to be used as short-term rentals in the next few years.

With this new ordinance, Burgess said in a statement, he hopes to prevent “a mass turnover of existing rental housing stock into short-term rentals” while still allowing homeowners an opportunity to help pay the mortgage.

Last June, a controversial ordinance would have limited the number of days in a year short-term rentals—defined as a rental where the same individual or group rents for 29 nights or fewer—could be available, with an exception for a rental in the owner’s primary residence.

The revised version announced earlier this week strikes that requirement. Rather, it regulates the number of units that one person can operate as short-term rentals. Under the current draft, owners can operate up to two dwelling units as a short-term rental if one is their primary residence.

Accessory dwelling units like backyard cottages are considered part of the same unit as the primary residence. For example, if someone’s renting out a tiny house in their backyard, it’s still considered part of their primary residence, but a condo in a different building would not be.

Owners would have to obtain both a business license and a short-term rental license and provide data on their short-term rental properties to the city quarterly. Fees would vary, but would cost around $50 to $100 a year per unit.

Platforms, like Airbnb and VRBO, would also need to obtain a license, with fees ranging from $2 to $7 per night booked.

Operators could continue working with management companies that help short-term rentals with logistics, like Pillow. They’d just have to make sure that the rentals are in compliance as applicable—for example, if a third party posts and manages listings, they’d have to make sure the license number is properly displayed.

Bed and breakfasts—you know, the “bnb” in “Airbnb”—would fall under the license, but existing ones would be grandfathered in.

After almost a year at the drawing board, this proposal already seems less controversial. Airbnb, which came out against the proposal last time around, seems more open to the new regulations. Laura Spanjian, Airbnb Public Policy Director for the Northwest, said in a statement that they “welcome” the new proposal.

“We continue to work closely with the City on developing regulations that will protect Seattle’s long-term housing stock while allowing thousands of responsible Airbnb hosts to share their homes to earn meaningful supplemental income to help make ends meet,” she said.

The Seattle City Council Affordable Housing, Neighborhoods, and Finance Committee will consider the ordinance in early June.