05/07/2021
Update to the Short Term Rental Regulations in Chelan County. This is not code but new details to the new draft:
TASK FORCE UPDATE
The report documenting the task force process and consensus recommendations has been sent to the BOCC and we are now able to discuss the recommendations. At the request of the BOCC chair, the final report has not been shared with the task force members. We will see the report the same time the rest of you do. So the following is based on summary notes, not a reading of the report sent to the BOCC. It represents the best information we have at this time.
The task force’s consensus recommendations would eliminate the most egregious forms of overreach from the December draft code. They represent a significantly better outcome for STR owners and operators in most respects. There are reasonable provisions for grandfathering and transferability for established STR operators. The lottery and sunset period are gone. The cap on the allowable percentage of STRs is higher. And STRs will be allowed in all zones including RW and RV.
I have summarized below the questions that the BOCC charged the task force with addressing, along with the task force’s consensus recommendations. At the end I will go over some areas where consensus was not reached.
CONSENSUS POSITIONS
1. How do we address the issue of “grandfathering” in existing rentals?
Consensus recommendation is that for STRs outside the Manson UGA, established STRs are grandfathered if they actually operated at some point between 7/28/2019 and 8/25/2020, and the owner can prove that all taxes were paid for stays during this period. STRs inside the Manson UGA and holding a permit as of 8/25/2020 would be eligible for grandfathering on the same terms. Consensus was not reached on grandfathering for those in the Manson UGA who lacked a permit on 8/25/2020.
2. Should we allow transferability of permits?
The consensus recommendation was to allow a one-time transfer within five years of adoption of new code. After that, transfers of STRs would not be allowed, even after the cap is met, except in cases of inheritance or divorce. To be transferable an STR must be fully compliant with the new code’s operating standards (things like parking and septic capacity, but excluding things like lot size and spacing that are outside the owner’s control). This allows a reasonable transition period for those who wish to get out of the STR game to sell their property as an STR.
3. In which areas should short-term rentals be allowed?
The consensus recommendation is that new Tier 1 and Tier 2 STRs should be allowed in RR20, RR10, RR5, RR2.5, RRR, RW, and RV (i.e. all recreational and residential/resource zones). Tier 3 STRs should be allowed in RR5, RR10, and RR20 zones. For the Peshastin and Manson UGAs, the allowable zones would be as in the December draft code. For Peshastin, this means STRs in commercial zones only. For Manson, it means Tier 1 & 2 in all zones, Tier 3 only in commercial zones.
4. In those areas in which they are allowed, what should be the limitations?
The consensus recommendation includes the following limitations on new STRs.
(a) one STR per lot;
(b) 200 feet between a parcel containing a new Tier 2 STR and any parcel already containing an existing STR;
(c) new Tier 2 and Tier 3 STRs can only be placed on lots meeting the minimum lot size required for that zone in the existing zoning code, except for RR20. The minimum lot sizes for new T2/3 STRs are:
RW, RV, and RRR: 0.275 acres
RR2.5: 2.5 acres
RR5: 5 acres
RR10: 10 acres
RR20: 10 acres
5. What should be the cap on the number or percentage of rentals within a given area?
The consensus recommendation was a general cap of 6% of housing units in most areas. This cap would be enforced at the level of ZIP codes, UGAs, and sub-areas within ZIP codes. Specifically, there was discussion of dividing the 98826 ZIP code into 3 sub areas roughly corresponding to Leavenworth, Plain, and Lake Wenatchee. We did not get to the point of drawing lines on maps. For Manson, the recommended cap is higher, at 9%. Master Planned Resorts and Planned Unit Developments are exempt from STR caps if STRs were in their master plan.
6. How do we get to the cap in the present?
The consensus recommendations do not include a lottery, sunset period, or other mechanism that would compel wholesale shutdowns of STRs. Instead, the plan is to reach the cap through increases in the housing stock and natural attrition of existing STRs when owners convert them to personal use or sell them. This is why some limitations on transfers were so important to the “neighbors” side.
7. How do we get to the cap in the future?
A consensus was not really reached. Both sides of the negotiation were open to either a lottery or a waiting list for allocating future STR rights, once the cap level is reached. There is likely still room to influence this issue if the STR community takes a position.
8. What should be the cap on occupancy levels for tiers 1, 2 and 3 rentals?
The consensus recommendation was a maximum occupancy of 2 guests per bedroom, and an overall maximum of 8 for Tier 1, 12 for Tier 2, 16 for Tier 3. These are the same as the December draft code.
NON-CONSENSUS POSITIONS
There were a couple of areas where the task force did not reach consensus. We should expect the BOCC to take up these issues. Both sides had the opportunity to append their own comments to the consensus report. The STR side used this opportunity to deliver its recommended compromise positions on these issue to the BOCC.
1. Owners trapped by moratorium.
We recommended providing the Director of Community Development with discretion to grandfather properties that: (a) Had approved unexpired building permits issued before August 25, 2020 where the applicant noted on the building permit application form that it was intended to be used as a short term or vacation rental, and was constructed and issued a certificate of occupancy within six months of the effective date; AND/OR (b) Were purchased by the current owner in a sale that closed in 2020 and was pending on or before 8/25/2020, if the owner can provide evidence from before 8/25/2020 of STR-specific investments or intent to operate it as an STR. Examples of evidence include but are not limited to: communications with realtors, property managers, cleaners, architects, builders, or county staff; preparation of draft listings or advertising materials; or permit applications indicating intended STR use.
2. Grandfathering of unpermitted Manson UGA STRs
We recommended that in addition to grandfathering those with a valid permit as of 8/25/2020, Manson UGA STRs should be eligible for grandfathering if they hosted guests and paid taxes between 7/28/2019 and 8/25/2020 (same as elsewhere in the county), plus EITHER: (a) They held a valid 2019 and/or 2020 permit if they hosted guests in 2019 and/or 2020, respectively; OR (b) If they hosted guests without a permit in 2019 or 2020, payment of double permit fees for each prior year of operation without a permit within the UGA. We recommended that penalties collected from those in group (b) be put into an enforcement fund to pay for extra code enforcement officer time during evening and weekend hours during high season in Manson.
CONCLUSION
This is not the code that we as STR owners would have written. We did not get everything we wanted. But it is a hell of a lot better than what we were staring down in December. It provides a path to continued operation for those of us who have been making a reasonable effort to play by the rules.
