Vacation hot spot Chelan County limits short-term rentals

Following months of tension between long-term residents and rental owners near sought-after tourist spots east of the Cascades, new regulations will soon limit the number of rentals listed on sites like Airbnb in Chelan County.

In a win for those currently renting out vacation homes, though, most will be allowed to stay for now.

The Board of County Commissioners voted Tuesday to approve new regulations for short-term rentals in unincorporated areas of the county, covering communities near Lake Chelan and Leavenworth. (Leavenworth proper already has its own rental limits.) 

Short-term rentals listed on Airbnb, Vrbo and other sites have been controversial around the country for years as some local residents argue they create traffic and noise problems, or deprive the housing market of needed homes. Supporters and rental operators argue they help attract visitors and are a key part of local economies, especially in tourism-rich areas like Chelan County. 

Starting in 2019, Seattle limited some short-term rentals. This year, facing an influx of tourists, several Colorado towns are considering new rental regulations. Clark County, Nevada, is grappling with thousands of short-term rentals operating in violation of a ban. 

Chelan County came close to adopting new limits last year, but opted instead for a task force to consider the issue. 

Short-term rental owners say the new rules could prove onerous. The cap could hurt the region’s tourism, said Don MacKenzie, who rents out a cabin on Fish Lake and is secretary of the Short Term Rental Association of Chelan County, representing rental owners. 

“For visitors to the county and businesses that rely on those visitors, that’s going to be a big drop in business,” he said.

Advocates for stricter rental limits hope the new rules will curb what they describe as an influx of disruptive guests.

“It’s definitely better than what we have, which is no controls and no enforcement. We will have standards,” said Kirvil Skinnarland, who lives near Leavenworth and is board president of the group Residents United for Neighbors, which supported more regulation.

Under the new rules, the county will cap new short-term rentals that are not owner-occupied at 6% of total housing units in most unincorporated areas of the county. Today, short-term rentals make up about 7% of the housing stock in those unincorporated areas, with higher concentrations in some areas, according to county estimates.

Many existing rentals will be exempted, though. 

Rentals operating today can continue if owners were renting before last August, paid taxes in recent years and follow new rules — even if they exceed the 6% cap. If the owner sells, they can transfer the rental permit to a new owner one time in five years and the rental can continue operating.

But if the property is sold again, the rental loses its status and the 6% cap applies. That means the number of rentals is not likely to drop dramatically in the short term. In coming years, though, the area could see fewer rentals as homes change hands. 

Other new rules will limit where rentals can be located; require all short-term rental owners to register; and mandate standards for issues like parking and noise. Larger rentals with more than 12 guests will be subject to extra regulations.

The adopted legislation says restrictions were “necessary to promote the public health and safety by protecting year-round residents’ enjoyment of their homes and neighborhoods.”

Over months of deliberations, supporters of new regulations argued that rental properties draw large groups of unruly visitors, stress local infrastructure and keep needed homes off the market for sale or long-term rent.

“The key from here going forward is how well the ordinance is enforced,” said Skinnarland, whose group supported tighter regulations. “If it’s not enforced effectively, then we really haven’t gained anything.”

Owners of short-term rentals argued they help prop up the region’s economy and fill what would otherwise be vacation homes sitting empty much of the year.

A group of about 26 rental owners who were not operating before August 2020 — and therefore would not be grandfathered in — is still raising concerns about the new rules and considering a lawsuit, according to representatives for the group, Fairness In Grandfathering.

Under the new rules, rental owner Raminta Hanzelka expects to be able to continue renting the chalet she owns near the Chiwawa River, but the number of guests allowed will drop from eight to six because of a new rule limiting rentals to two guests per bedroom. Hanzelka worries others will lose out.

“I do feel a sense of sadness and disappointment for the people who will be really negatively impacted and the families, too, who used to be able to rent these places and now won’t be able to,” she said.

Ahead of the vote, Commissioner Tiffany Gering said lawmakers tried to strike a balance. “No one is going to be happy with this outcome,” Gering said.

County staff said they will begin work on implementing the new law this week. Most of the new regulations will take effect in late September.