Vancouver has between 250 to 400 units available to rent for short stays through Airbnb, VRBO and other sites, according to data collected by city officials. Most of them, however, are operating illegally because of zoning restrictions on short-term rentals, a period of stay that the city defines as less than 30 days, in residential neighborhoods. As a recent article in The Columbian reveals, Vancouver city officials are now attempting to bring short-term rentals into compliance by proposing new regulations, including a $250 operating permit which owners of the units would need to apply for. Carlos Fuentes is the city and federal reporter for The Columbian. He joins us to talk about this issue.
Note: The following transcript was created by a computer and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. On any given day, there are hundreds of units available for short stays in Vancouver, Washington on sites like Airbnb and VRBO. According to recent reporting in The Colombian, though, most of them are operating illegally. Now, city officials in Vancouver are talking about new regulations that would bring those short term rentals into compliance. Carlos Fuentes is a city and federal reporter for The Colombian. He joins us with more. Welcome to the show.
Carlos Fuentes: Hi, it’s good to be here.
Miller: What have you or the city been able to learn about what these rentals are? Who is renting these homes out and what they’re like? And where they are?
Fuentes: This has been an ongoing sort of issue for the last couple of years. Back in the fall of 2021, the Vancouver City Council asked city staff to look into short term rentals. By that, I mean, find out how many there are, what types of housing they’re taking up, and conducting community and host service. So the city defines a short term rental as a housing unit rented for fewer than 30 consecutive days. And they’re typically rented out on platforms such as Airbnb and VRBO. They did this because there are no current regulations on short term rentals in the city. So technically, they’re mostly all illegally operating. What I mean by that is, that under the current city zoning codes short term rentals are banned in commercial, industrial, and every type of residential and mixed-use zoning.
The only types that are currently legal are bed and breakfasts, but there are fewer than a handful of these on a map that the city has on an information page. I could only find three or four short term rentals that classify as Bed and Breakfast. So it’s safe to say that the vast majority of these 300 or so short term rentals are illegally operating.
Miller: Are there certain neighborhoods or areas where they tend to be clustered?
Fuentes: No, they’re actually spread out pretty evenly throughout the city. There are quite a few in the downtown area of course, but I think that’s sort of natural due to the just sheer amount of density that is occupied in the downtown corridor of Vancouver.
Miller: And who is renting these homes out? Who are the owners, in general?
Fuentes: Yeah, the city actually didn’t have that many questions regarding demographics in their survey. I think one concern that a lot of people share is that they’re maybe thinking that people renting out short term rentals are living across the country or in a different state or maybe they own more than a handful of them. So they might think that the money is just leaving Vancouver. But I don’t think that’s always the case.
Three hosts that I heard from, they all live in Vancouver. They all have full time jobs, and they just use Airbnb or VRBO as sort of supplemental income. One woman that spoke at a recent City Planning Commission meeting, said that she manages her mother’s property who can no longer live in the house because she has dementia and she uses all of the Airbnb income to fund her mother’s health care costs.
Miller: Why are city officials talking about regulating these short term rentals now given that they’ve existed for a number of years?
Fuentes: That’s the thing that I think many people are asking. One other host that I spoke to said that he has had a very high success rate with Airbnb and he said that he has already been paying taxes to the city. So he has an Accessory Dwelling Unit (ADU) in his backyard in Vancouver. And he said that to make it as ADU, he had to go through a permitting process. So he had to make sure that the unit was built up to codes and his reaction was like, ‘Well, I already did all of this.’ He said that it seems like the city is just maybe trying to control and make money off of something that was working just fine before they got involved. He did say he supports an approval process because he thinks it’s important that all Airbnbs and VRBOs do meet codes. But he said, ‘You know, the system wasn’t broken, but the city of Vancouver just seems to see an opportunity here to regulate something else and is deciding to step in.’
Miller: What are the proposed regulations that city officials are considering right now?
Fuentes: The main thing is changing the zoning code so that short term rentals are allowed in virtually every type of zone, from commercial to every type of residential. So what this would require is a new application, and this application will require hosts to pay a one time $250 fee. And it would require a few different things. It would require that the space complies with all health and safety local codes which regards things like window supports, basement exits, smoke alarms, noise and pollution codes. It would require hosts to give their neighbors specific information about the unit. So if they have any noise complaints or issues, they can directly contact the host.
And then one last thing that I think is important to highlight is that it would require hosts to register with the Washington State Department of Revenue. And on top of the short term rental license that they’re already paying $250 for, it would require hosts to obtain a City of Vancouver business license if they make above a certain threshold. I’m not sure what that threshold is, but basically, it’s not just one $250 application fee. It could be three licenses, all of which cost money and the city is already making money from them. A staff presentation said that the city made $140,000 in short term rental taxes in 2022. So this isn’t going from zero to a big number. It’s just raising the amount that the city is making.
Miller: Oh, because even though these are technically operating illegally right now because of city zoning, the city is already taking in tax revenue through these sites.
Fuentes: Exactly. They are already making taxes. One of the hosts that I spoke to said, ‘I’ve been paying my taxes.’ He has an ADU [Accessory Dwelling Unit] and through that you have to go through a permitting process. So, yes, he’s already been giving money over.
Miller: Have any city officials said what they would like this new potential revenue stream to go towards?
Fuentes: Yes. Actually one thing that the city is floating around that was discussed at a recent City Council meeting is using the $250 application fee to go directly toward the city’s Affordable Housing funds, which is no small amount. If we round up, let’s say there’s 400 short term rentals in the city and each one suddenly has to pay $250, the city is making $100,000 off of that in a very short amount of time. And that’s a serious chunk of change that they could use to support housing programs in the city.
Miller: How much of Vancouver’s rental market is taken up by these short term rentals? I asked because one of the arguments we’ve heard over the years is that these kinds of rentals take potential long term rental units out of the market. What do the numbers actually look like?
Fuentes: All in all, it doesn’t seem like short term rentals are making a big difference to Vancouver in terms of creating affordable housing. According to the same city presentation, short term rentals make up just 0.45% of 84,000 housing units in Vancouver. So that’s less than half of 1%. So even if we were to free up the 300 or so short term rentals in Vancouver, that would barely be making a dent. And that’s assuming a couple of things – that’s assuming that they all instantly fill up with long term residents, which is likely not going to be the case.
I think, maybe more importantly, it’s assuming that everyone who is currently renting a room or a house on Airbnb or VRBO would be willing to rent out their space for a year at a time, which would essentially make them landlords. The woman who spoke at the planning commission earlier, who said that she manages her mother’s property, said that she would not be comfortable renting out her space if it were for an entire year or for multiple months because it’s a very personal space to her. So we can’t say that all short term rentals would become long term rentals which makes that impact even smaller.
Miller: What are the next steps right now that would need to happen before these proposed regulations were actually adopted?
Fuentes: They’re well on their way into actually becoming adopted. The City Council of Vancouver will host a public hearing in early summer likely June and they will, following that public comment period, vote to fully enact the regulations. So we could be seeing this application spring up probably late summer.
It’s not clear how soon this would go into effect, but it does have the potential to bring quite a bit of money to the city and it doesn’t seem like there’s a lot of steps in the way for the city. There’s not many hurdles so I could see this happening in the next three to five months, I would say.
Miller: Carlos. Thanks very much.
Fuentes: Yeah, of course. Thanks for having me.
Miller: Carlos Fuentes is a city and federal reporter for The Colombian. He joined us to talk about what seems to be coming regulations for the short term rental market, meaning people renting units on sites like Airbnb and VRBO, regulations coming to the City of Vancouver.
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