Regulating Short Term Rentals

Update: On July 20, the Affordable Housing, Neighborhoods and Finance Committee discussed a modified approach to regulations. A summary of that approach is available here.

On June 1st, 2016 Councilmember Tim Burgess and Mayor Ed Murray announced a proposal to prevent long-term rental units from being converted to short-term rentals, while still providing residents the flexibility to earn additional income by renting out their homes.

The measure focuses on commercial operators who use platforms, such as Airbnb and VRBO, to rent multiple properties year-round. Approximately 80 percent of existing short-term rentals in Seattle will see no new regulations.

"Property owners are shifting hundreds of homes from the long-term residential market to short-term rental platforms like Airbnb, and in doing so dangerously reduce our housing supply," said Councilmember Burgess, chair of the Council's Affordable Housing, Neighborhoods and Finance Committee. "At the same time, Seattle homeowners offering short-term rentals in their own homes earn valuable supplemental income. These proposed regulations focus narrowly on the commercial operators that take advantage of home-sharing platforms to exacerbate our housing crisis."

Short term rentals have exploded in popularity in Seattle in recent years Short term rentals have exploded in popularity in Seattle in recent years. The map on the left is a snashot of estimated Airbnb rental reviews in Seattle from July 2013, and the one of the right is from July 2015. (Source: insideairbnb.com)

Under the proposed rules, any property may be provided as a short-term rental for up to 90 nights in a 12 month period. Only properties that are the primary residence of the short-term rental operator will be allowed to rent past the 90 night threshold. The primary residency requirement will curtail the growing year-round commercial operation of these platforms.

"Approximately 80 percent of existing short-term rentals in Seattle will see no new regulations."

"We must protect our existing rental housing supply at a time when it is becoming harder for residents to find an affordable home in Seattle," said Mayor Ed Murray. "This proposal ensures that apartments and houses are not being used exclusively as short-term rentals, while still providing a means for homeowners to earn some extra money by occasionally renting out their property."

Consistent with current City rules, all short-term rental operators must secure a City business license tax certificate and pay all applicable taxes.

The small percentage of operators renting their primary residence for more than 90 nights will be required to also obtain a City regulatory license. This license will require proof that the unit being rented is the operator's primary residence, proof of liability insurance that covers the short-term rental use, a local contact number for guests, a signed declaration that the unit meets building and life safety codes, and basic safety information posted for guests in the unit.

Under the proposed regulations, all short-term rental platform companies will also need to obtain a new regulatory license with the City. The platforms will be required to give the City limited data on a quarterly basis necessary for enforcement of the proposed law.

More information on the proposals can be found in these documents:

The City Council first considered these proposals at a meeting of the Affordable Housing, Neighborhoods and Finance Committee at 9:30 a.m. on Wednesday, June 15, 2016. The last committee discussion was on July 20 at 9:30am in Council chambers.

Additional Resources:

Infographic: Every Home Counts

From Councilmember Mike O'Brien

Short Term Rentals Infographic - Every Home Counts