Olympia considering regulations for short-term rentals

Covers Airbnb, VRBO and other commercially brokered and informal short-term lodgings


After a four-year process, the Olympia City Council saw the first reading of an ordinance that would regulate short-term rentals in the city.

Community Planning and Development Director Leonard Bauer presented the new guidelines during the regular city council meeting on Tuesday, August 10. The deputy director shared that the city recognizes short-term rentals and would like to allow these businesses to continue.

With this, Bauer said that the regulations will benefit the community as it would ensure the supply and affordability of housing in the city. He added that city staff believe theordinance would also minimize safety risks and noises that are usually associated with short-term rentals. Overall, he said he believed that the ordinance will provide a clear standard and guidelines for property owners.

What are short-term rentals?

Generally, Bauer explained that short-term rentals are facilities that offer lodging for a fee, with a maximum stay of 30 nights. He noted that establishments such as bed and breakfast, boarding houses, motels, and hotels are covered by existing laws and would not be affected by the new ordinance.

 To operate a short-term rental, property owners must secure proof of business licensing, insurance, and state taxes.

 Short-term rentals are classified as either homestay or vacation rentals.

“Homestays are defined as short-term rentals in which one or more rooms are rented within a dwelling unit that is occupied by a permanent resident or property owner.  They will be treated the same as other home-based businesses are currently in the City code., Bauer told The JOLT. “Separate short-term rental units, which are not occupied by the owner or a long-term tenant, are defined as ‘vacation rentals’ in the ordinance.  They will have additional regulations apply, and a permit from the City will be required,” he added.


For vacation rentals, property owners will be required to secure a city permit. Olympia Associate Planner Catherine McCoy explained that the permit is renewable every two years. She claimed that the process allows the city to monitor businesses and to ensure that property owners comply with the city guidelines. The cost of the permit has not been determined yet, but will be “limited to the amount needed to cover the cost of the City review of the permit application,” according to Bauer.

In terms of structure, Accessory Dwelling Units (ADUs) are also considered as vacation rentals. For multifamily buildings or developments, owners are allowed to rent one unit for short-term rental or as much as three percent of the total number of units in the property.

Property owners must also post an emergency contact who is located within 15 miles of the property as well as the guidelines and a copy of their license and permit number.

Capacity limits

 The ordinance also puts a cap on the number of guests. For both homestay and vacation rentals, overnight guests are only limited to 10 adults, with two adults per bedroom. There should also be an additional parking space when guests are renting three or more units in one dwelling unit.

“Moving forward, these are gonna be changes that will help make sure that we have these options for people coming to visit, but we are also preserving the housing for people who live here long-term,” Councilmember Dani Madrone, Chair of the Land Use Committee, said.

Approval planned for later this month

The second reading of the proposed ordinance is scheduled for August 24 at which time it will be voted on by the council. If it passes, the ordinance would take effect 30 days after it is published, or approximately Sep. 26.


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  • BobJacobs

    "Vacation rentals" essentially convert housing to hotel rooms, thus reducing the supply of permanent housing at a time when we badly need more, not less. Then the city subsidizes the construction of new permanent housing units because we need them so badly.

    This is not just inconsistent, it is Orwellian.

    Thursday, August 12, 2021 Report this

  • JasonS

    To call the issue of vacation rentals "Orwellian" is melodramatic, not to mention plainly absurd as anyone who has actually read a book by George Orwell can attest. To say that the city of Olympia "subsidizes" new construction of housing is also overstating the case a bit. Yes, we do have a lack of affordable housing, but let's not go scapegoating one small group of folks who are trying to use AirBnB to bring in some extra money and falsely suggest that quashing those ventures is going to make a significant difference.

    Thursday, August 12, 2021 Report this