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Vacation Rental Kickoff Is May 5th - Put It On Your Calendar!

By On
• In Bellingham,

Framing counts. That is why the city consistently refers to vacation rentals as short term rentals (STRs). Just another rental but…you know… short. I think an even better descriptor would be “vacation gig-rentals” in order to pay tribute to the gig economy that has spawned these hotel/motel “mini-mes” that may eventually turn your neighborhood, your block, your condo building into a tourist district. Quiet enjoyment? Fuggedaboutit!

But the city has already spoken as the City Council has passed an ordinance to countenance, and attempt to control, the proliferation of vacation rentals. This time council insists that the en”force“ment will be with us - thus spake several council members last Monday during a discussion (watch the 16 minute video here) of the fee structure resolution that must be in place by May 5th (The Kickoff!).

However, several council members spoke of their discontent with this fee structure which they found too high but nonetheless noting that the fees can be reviewed in the future:

”...staff proposes the following fees for STR land use permits:*

Type I: $246 (staff & contingency) + $123 consulting fee = $370

Type II: $430 (staff & contingency, includes $53 notice) + $123 consulting fee = $553 (rounded down to $550)

Type III-A: $297 (includes $53 notice fee) + $550 Hearing Examiner fee = $847

Renewal (before January 1 of every even-numbered year): $123 (staff & contingency) + $123 = $246 (rounded up to $250)” [See staff memo]

According to staff, the fees are pass-through costs; the city will make no money from the program. The financials are spelled out below in a rather confusing chart (Projected STR Fees Spreadsheet - found below). However, the reality on the ground at the moment is that the current estimated 308 illegal vacation rentals, will likely translate into an actual figure of 185 legal units since the city expects that of the 308, only 185 will either comply or qualify. You may be shocked to know that some will attempt to continue to operate illegally, but there is a private consultant whose business is monitoring the vacation rental industry. This firm will report under contract to the city so that illegal operators can be found and put out of business. We shall see, since the city’s code enforcement record with respect to rentals is, charitably speaking, spotty (e.g. illegal rooming houses).

Extrapolating from the city’s estimate, a presumed 13% per annum increase, we can expect about 300 units to be operating legally in the city by 2023. I have every faith that the bad operators out there will continue to attempt to operate under the city’s radar, hoping not to get caught. Others will use LLCs and such to disguise ownership and avoid the unit limits per rental owner. The ordinance says you cannot do this but enforcement is key and we have been down that pot-holed road before.

Using a simple division calculation would lead us to believe that out of 25 neighborhoods, each neighborhood might expect to “entertain” about a dozen legal vacation rentals (300/25=12). However, in terms of preferred neighborhoods, those close the the “action,” the numbers would be higher; we don’t expect to see many such rentals in the outlying areas. Consequently, neighborhoods that are already jammed with long-term rentals (many overcrowded) such as York, Sehome, South, Happy Valley, Fairhaven, South Hill, Lettered Streets, etc., will tend to attract more vacation rentals and the attendant problems seen all over the world: noise, litter, crowding, parking problems, etc. The horror stories abound.

Nevertheless, the City Council still thinks it is just ducky to allow hundreds of vacation rentals while at the same time crying crocodile tears that we are in the middle of a housing affordability and availability crisis.

*Note: Fees based on the process for approval necessary depending upon the land use zoning. (See: 21.l10.040 Types of Land Use Decisions and STR FAQs below)

Single-family zones:Type I up to 2 bedrooms; Type II up to 5 bedrooms

Multi-family zones:Type I up to 2 bedrooms; Type I up to 5 bedrooms

Condominiums in residential zones: Type III-A Where STRs exceed the maximum of 1 unit or 25% of the units (whichever is greater) and condominium approval

Commercial and Urban Village zones: Type I Up to 5-bedrooms

Attached Files

About Dick Conoboy

Writer and Editor • Member since Jan 26, 2008

Dick Conoboy is a recovering civilian federal worker and military officer who was offered and accepted an all-expense paid, one year trip to Vietnam in 1968. He is a former Army [...]

Comments by Readers

Wynne Lee

May 01, 2019

For those who understand that proliferating, poorly regulated short term rentals (often commercial, e.g., up to 365 days a year in residentially zoned areas) ARE a problem, one key questions to ask candidates for Bellingham Council and Mayor is “how did you vote on this”? Another: What regulations do you pledge to support to ensure that short term rentals are NOT contributing to rental and housing price inflation for for full-time residents, nor causing problems for neighbors, nor contributing more to pollution of Lake Whatcom drinking water? Ask these questions of County Council and Executive candidates, too.

Do candidates support a law requiring ALL short term rentals to pay hotel tax for each and every day’s rental, to be used NOT to encourage more tourism, but to help defer city and county residents’ REAL relief from high property taxes, low availability of long term rentals etc, impact on traffic etc infrastructure? I’m all for so-called free enterprise, but entrepreneurs and business owners should pay their fair share of taxes (hey, it’ll just become another pass-through charge to their guests anyway; hardly a barrier to business, though I’m sure we’ll hear screams of ‘waily, waily waily, you’re killing us’ cry, should this be attempted).

As for county short term rentals re shoreline management requirements for waterfront rentals. Right now, County Councilors are officially ignorant that there are ANY ‘shoreline’ short term rentals, because, ahem, County Planning sent Council a table showing there aren’t any properties—well,  only a small handful, with shoreline zoning. So, nothing for Council to worry about re: shoreline management regulations. (Note: I wrote to Council about this, which Carol Frazy and Rud Browne have responded to. Thanks Carol and Rud)

County Planning is wrong. If you check out Airbnb or Vacation Rentals by Owners on Lummi Island, for example, you’ll see lovely photos of short term rental houses right on the waterfront, with glowing descriptions. Planning personnel apparently have forgotten that NO Lummi Island properties are zoned ‘shoreline’, even ones right on the beach. That’s because County chose a while back to zone all LI as ‘rural residential’. Natch, some properties were grandfathered in, having been first built back in the good (bad) old days before shoreline protection rules, when anyone could build anywhere, including having septic fields that perk right into beach gravel! Yup. They perk just great according to The Rules (eye roll).

Property taxes are a far more valid indicator of true property location and hence whether shoreline regulations should or not apply. The County tax assessor has no trouble identifying waterfront property, as owners can confirm. Doubtless there’s some quibbling legality that ‘explains’ the zoning/Council/Planning vs Tax Assessor disconnect, but the tax assessor is the sane, reasonable, factful reality on this one. Many tourists’ are clueless about the ecological needs and fragility of waterfront property they’ve rented, so shoreline management regulations and taxation should be rigorously applied and enforced for waterfront short term rentals, not ignored.

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Dick Conoboy

May 06, 2019

Excerpt: “Platforms such as Airbnb led to rent rises,” says Janet Sanz, the city [Barcelona] councillor responsible for housing. “If you can earn €3,000 a week by renting to tourists instead of €800 a month to a resident, clearly there is a temptation to do so.” Today, May 5th, Bellingham begins its legalization process for vacation rentals. About 300 exist illegally at the moment.

https://www.theguardian.com/technology/2019/may/05/airbnb-homelessness-renting-housing-accommodation-social-policy-cities-travel-leisure 

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Dick Conoboy

May 06, 2019

Wynne,

 

Several years ago Tani Sutley, a contributor to NWCitizen did an article on the county and its approach to vaction rentals.  You can read it here

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B. Sadie Bailey

May 06, 2019

I’m so sorry to read this; this is sad news for Bellingham. 

it’s the same here in the San Juans.  Real estate has skyrocketed, workers are pushed out of “urban growth areas” where the “action” is and where, according to the GMA, over 54% of us are supposed to live - only there’s no housing. no one can afford shop rent to open a small business because some rent is as high as $8 a square foot. To make matters worse, the county declares “long term” rentals as 31 days or more. The deck is stacked against the locals and quality of life for people with low to modest income. Now it have become “quaint” to live in or stay in town. 

I think these vacay rental “counts” just count the legal ones here.  They look the other way from the illegal ones but when discovered, they don’t get more than a hand slap and are grandfathered in. Have the citizens asked for a carrying capacity/ quality of life and maximum buildout projection? 

No answers here; a market crash won’t help. It’ll only force more foreclosures on the people who aren’t in the top 10%. but it MIGHT slow down the tourism glut… Sad any way you look at it.

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Dick Conoboy

May 06, 2019

 Cikty announcement on vacation rentals here.

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Tani Sutley

May 13, 2019

Vacation rentals in residential areas are a zoning issue but now it has become a real estate investment issue. Who wins this debate will depend how much homeowners want to live next to daily changing occupants for neighbors and the cumulative impacts of that increased density.

It may be difficult for some people to gauge the impact when there is only one vacation rental in the neighborhood but investors will purchase more homes to convert to transient occupancy as long as profits are to be made and the local Planning Departments allow it to happen.

I suggest people review the hearing examiner decision files for San Juan Island. For example, a Spokane company purchased two view properties next to each other and got permits in March of this year to operate them as vacation rentals. San Juan County processes those permits as if transient guests are no different than long-term residents. Almost all permits are issued to out of area owners or investors. 

https://www.sanjuanco.com/524/Hearing-Examiner-Decisions

We need to decide now what kind of community we want to be. Zoning once protected housing for residents from being used for tourists but our planning departments decided at some point it was too much work to use their own guidelines.

Tani Sutley

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