City Council Passes Limits on Airbnb Units and Other Short-Term Rentals

Regulations to come. Airbnb

The city council on Monday passed regulations that will cap the number of residential units a property owner may rent out to vacationers and other visitors through services like Airbnb.

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Today’s unanimous vote marked the third ordinance passed by the council in recent weeks intended to slow down the explosion of condos and properties rented out for fewer than 30 days at a time. Council Members Debora Juarez and Kshama Sawant were absent during the vote.

Supporters hope the new regulations will prevent speculation and return units from short-term listings to the long-term housing market. They argue Airbnb and similar units crowd the market and help push out low-income workers and people of color.

A report from the nonprofit organization Puget Sound Sage published last year estimated that, without controls, Seattle could lose more than 1,650 long-term units to short-term housing services by 2019. More than 6,500 units are currently listed on Airbnb alone, according to an analysis of data of the site.

The new regulations are complicated, chockfull of carveouts and exceptions. Here’s a breakdown:

•Under the regulations, anyone who wants to operate short-term rentals must obtain permits for each unit they put on the market. Per an ordinance passed in November, the city will also tax short-term rental services $14 per night.

•Property owners will be allowed to list two short-term rental units: Their primary residence (where they live) and one other unit.

•People who are already operating short-term rental units will be allowed to rent out up to two units at first. After a year, they will be eligible to operate a third unit if it is their primary residence.

•The regulations provide a carveout for downtown property owners to keep any short-term rental units they’re currently operating. On top of that, they will be allowed to operate an additional unit and their primary residence.

•The council also approved an amendment, sponsored by Council Member Lisa Herbold, that asks the city finance’s department to figure out how much it should charge service providers to cover the costs of administering the regulations.

•The regulations go into effect in 2019.

A previous version of the legislation would’ve allowed property owners to continue operating “grandfathered” short-term rentals in a larger area than just downtown, including Belltown, South Lake Union and Pioneer Square. Council member Rob Johnson advocated for this larger carveout, arguing that the city should seek the additional revenue generated by the tax to fund anti-displacement and economic development initiatives.

But an amendment introduced by Council Member Sally Bagshaw and passed by the council today shrunk the “grandfathered” zone to its current downtown area, a move opposed by several short term rental operators during a lengthy public comment session.

Kevin Dares, who told The Stranger he owns and operates six short term rental units in Belltown, implored the council to reject the amendment. "Quite a few vacation rental owners do not own the unit outright and will simply be left without a job, forced to fire the employees they have servicing the unit, and will likely join the collective of persons struggling to pay rent in Seattle and ultimately choose to leave," he told council members before they passed the amendment shrinking the carveout zone.

Security officers escorted several short-term rental operators out of the chambers after they shouted at the council for passing Bagshaw's amendment 5-2.

Supporters of shrinking the "grandfathered" area argued that the larger carveout conflicted with the ordinance's goal of returning rental units to the long-term housing market. Residents of a condominium complex called Belltown Court have been particularly vocal in speaking out against the larger carveout, arguing that a high proportion of short-term rentals in their building raises safety and affordability issues.

"The unit next to my unit was just listed with no regulations. That could’ve been a family’s home," said Chris Chaney, president of Belltown Court Association.

Purple represents the area where existing short-term rentals will be grandfathered in. Blue was the original proposal for the exempted area. Seattle City Council

Council Member Mike O’Brien had previously proposed an amendment that would charge $2 per night to help cover the costs of implementing the regulations. That figure was based on an estimate by city researchers using incomplete data. O'Brien did not re-introduce his amendment today.

The ordinance passed by council today results from two years of negotiations between city officials and companies in the short-term rental and tourism industries. Representatives from Airbnb and Expedia thanked the council today for bringing forward Herbold's amendment to ask the city to study an appropriate fee, rather than approving O'Brien's proposed $2 per night.