Illegal rentals, websites like Airbnb have local impact
By Marcy Stamper
As Okanogan County considers revising its rules for overnight tourist rentals, some people hope the changes will rein in an industry that has become increasingly difficult to manage as online lodging reservations proliferate on websites such as Airbnb and Vacation Rentals by Owner.
Others are concerned that the changes proposed by the county will make it impossible for established motel and lodging owners to make a living. Still others worry that allowing more nightly rentals will spoil neighborhoods and reduce the already low supply of affordable rental housing in the Methow Valley.
As part of the update of its zoning code, Okanogan County planners have proposed loosening restrictions on nightly rentals — any place rented for less than 30 days at a time — so that property owners would no longer have to go through the complex and costly process of creating a planned development.
Instead, in the Methow Valley, a property owner could apply for a conditional-use permit to operate a nightly rental. Elsewhere in the county, where nightly rentals are currently prohibited, the new zoning code would allow them outright, with no special permit required.
“People contact us constantly about whether they can have a new nightly rental,” said Okanogan County Senior Planner Ben Rough, who estimated the county has received one or two calls every week for years. Although he explains to people that they must apply for special zoning, Rough said the rules can be misleading, since the planned-development process is “cost-prohibitive.”
Lower costs
While the conditional permit would require an application, public notice and a hearing, the process is more streamlined and less expensive, said Rough.
It costs $2,000 just to apply for a planned development, and the necessary legal and land-use documents add another $5,000 to $10,000, said Rough. By contrast, applying for a conditional-use permit is $1,000, with no other costs.
County planners and the commissioners suggested using conditional-use permits as a way of ensuring that any new nightly rentals would be reviewed by county staff and the public to minimize their overall impacts, said Rough.
Bill Pope, co-owner of the Mazama Country Inn, said he recognizes the county is trying to address the current reality. “I think the commissioners are struggling with facts on the ground — that there is already a thriving ‘illegal’ short-term rental market and those rentals are not paying taxes or otherwise competing fairly. So I understand their desire to permit — and regulate — this market,” he said.
“My main concern is the impact on neighbors and affordable housing, more than on other lodging,” said Pope, who said inroads into the tourism market from online rentals are inevitable.
Some in the tourist industry resist simplifying the process for starting a nightly rental. Tom Miniajluk, who, with his wife, Vicki, co-owns Timberline Meadows, a permitted nightly rental development in Mazama, thinks making it easier for people to operate nightly rentals would be unfair to people who have made a considerable investment and “done everything by the book.”
“We’ve fought to keep going for 20 years, but business keeps eroding. There’s no such thing as a solid livelihood in it now,” said Miniajluk. Today the nightly rental market is so flooded with nightly rentals that most places in the Methow are occupied only 20 percent of the year, he said.
Miniajluk also pointed to the importance of having designated areas for tourist accommodations so people understand they are not in an ordinary neighborhood. “As a buyer, they weigh the benefits versus the potential drawbacks” of having tourists coming and going or partying, he said.
“Nothing’s for free,” said Miniajluk, noting that they had reserved about 30 of their 42 acres at Timberline Meadows as open space. “It’s a scenic corridor in Mazama — we can’t build on it or improve it, and there are expenses to maintain it and keep it weed-free,” he said.
Miniajluk said illegal rentals have become “a serious, serious problem.” Even some property owners in the Timberline development now rent online, undercutting the established rate.
The county’s lax enforcement of violators has encouraged more people to skirt the rules, said Miniajluk. “The enforcement is pathetic, so it becomes known that nobody’s going to come knocking on your door,” he said.
Rough conceded that the situation is hard to police. “Nightly rentals are an enforcement nightmare,” he said. “First of all, you have to have a person allocated to enforce it. With everything else we do, it will never be a priority, but it’s really important.”
“The hard part is telling someone they’re operating illegally, but we have no permit to offer them,” said Rough. “So — usually — they operate without a permit.”
Even if the county did want to pursue someone renting illegally, the only mechanism is through criminal prosecution and a jury trial — rarely pursued because it is a relatively low priority, said Rough.
Neighborhood impacts
Kathleen Jardin, co-owner of Central Reservations, the Winthrop-based business that handles hotel rooms and permitted nightly rentals, said she spends hours explaining zoning to people who want to rent their vacation home, and advising them to check the covenants for a particular property. Jardin estimates she has turned down hundreds of prospective renters over the past five years.
Many people even contact her as part of their deliberations about whether to purchase vacation property, hoping it will pay for itself if they rent to tourists, said Jardin.
The encroachment of Internet sites like Airbnb and Vacation Rentals by Owner into standard tourist accommodations is a “nationwide epidemic,” said Jardin, who said the proliferation of overnight rentals can destroy neighborhoods. “There is no housing for normal people,” she said. And when second homeowners rent their cabin, the money doesn’t necessarily stay in the valley, said Jardin.
Another concern is that under the unregulated system, some owners of nightly rentals are not paying taxes to the county, including the additional amount designated for tourism promotion. “The folks doing illegal nightly rentals are being subsidized by the rest of us,” said Pope.
Pope also suggested that the county include a requirement for adequate insurance in any new permitting process.
But many people — tourists and homeowners — find online rentals attractive. Participants in a recent discussion on the Methownet.com bulletin board called Airbnb “fantastic” and urged people not to squash it.
“It’s extra income for those that offer it and the valley in general … and it’s a great way to get introduced to the area,” said one. Another suggested that objections to the online bookings are “pure and simple GREED” on the part of people with legal rentals.
But others in the discussion were concerned about the need for oversight of health and safety issues or the fact that the county doesn’t receive taxes and welcomed the county’s efforts to get better control of the situation.
Proposed changes
Okanogan County Public Health is also currently reviewing its requirements for what are called overnight transient accommodations (OTAs), which include nightly rentals and B&Bs. The proposed changes would update the county’s regulations so they reflect current state rules, according to Dave Hilton, the county’s environmental health director.
The biggest change covers the water system. While the property would still need to pass the same water tests, it would no longer be necessary to apply to the state for a group system. “It would be simpler and easier for a local person to get permitted,” said Hilton.
Hilton said they have two staff members who keep tabs on illegal rentals. “We find them because they’re advertising. The Internet makes it easier for people to rent, but it also makes it easier to find them,” he said.
While the Public Health approval states that the permit holder is responsible for conforming with other regulations, health officials don’t have the authority to get involved in Planning or Building department requirements, said Hilton.
The number of permits issued by Public Health has gone from 122 in 2010, to 140 in 2015, with the biggest increase in the past year, according to Mike Harr, an environmental health specialist. Although they received only one complaint in the past five years, in 2015 Public Health staff discovered and notified 18 unpermitted overnight rentals.
Some properties offered through Airbnb are legal. Prospective renters post their names and photos, as well as photos of their property, making it fairly easy to root out illegal rentals.
In October, the Washington Department of Revenue and Airbnb entered into an agreement in which Airbnb agreed to collect sales and lodging taxes on behalf of their hosts, according to the department’s communications director.
According to Airbnb, they collect the tax, a cleaning fee and the special lodging tax used for tourism promotion.
No matter what happens, online options will continue. These types of Internet, uncontrolled things just make it easier for people to do an illegal act,” said Miniajluk. “It’s like downloading music for free. Everyone’s doing it, when it becomes so easy and nobody’s minding the henhouse.”
“I can’t say if the county commissioners or the planning commissioners have their minds made up,” but proposing a conditional-use permit is a way to start the discussion, said Rough.
