Planning Commission Votes for Option B! 

At their Wednesday, February 28, meeting, the Port Angeles Planning Commission voted to send a message to the Port Angeles City Council that they support Option B! This is one more indication of the growing groundswell of support for our STRs.

​

Dark Day for City's Short-Term Rentals

 At a public hearing on Tuesday, February 20, the Port Angeles City Council passed a motion that will eliminate the majority of the city's short-term rentals. The Council chose the most-extreme of three options presented by City staff. Option C mandates a cap of 100 Type 2 (whole-house) STRs (1% of the city's housing stock), and they would be allowed only in commercial, medium- and high-density zones.

​

The Council's action will force the closure of approximately 200 STRs, or more than 80% of all STRs in Port Angeles. A GovOS analysis indicated that as of late 2023 there were approximately 234 STRs in the city, though other data sources indicate there are more. We believe the true number is likely 250-300.

The Three Options

On February 14, 2024, the City of Port Angeles released three new STR regulation alternatives for consideration at the February 20 City Council meeting. Options A and C are based on the survey's Alternative 3, which gained the lowest number of votes, with just 7% of community members in favor. Option B is based on the survey's Alternative 1, which gained the highest number (39%) of votes.
 

Option B: The Clean Slate

While none of the options are ideal, rather than pressing for a hybrid option, as we initially aimed for, we recognize the need to be flexible to reach a middle ground that would be more likely to be passed. With this in mind, we support Option B, with no changes.

 

Option B allows STRs in all residential and commercial zones, with a cap of 250 or 3% of total single-family residences/duplexes, whichever is greater. This option is the fairest solution, since it is based on the most-popular alternative in the community survey. It  accomplishes the Council's directives given to the Madrona Law Group, GovOS and staff to create a path to compliance for those STRs out of compliance, it's the simplest to enact and it offers the smoothest transition. As the City collects more data, we anticipate that code adjustments may be required to accommodate future opportunities in Port Angeles. 

 

Option B streamlines the regulatory process by treating all applicants as new STRs, rather than creating entirely different sets of regulations based on whether STRs adhered to the 2017 zoning or opened in residential zones. This will significantly reduce the amount of time, cost and red tape needed to administer the program.

​

This option stands to:

• generate more than $100,000 in annual license and inspection fees;

• ensure steady replenishment of the lodging tax fund, with up to $500,000 projected in 2024;

• position the City of PA to take advantage of the coming affordable housing legislation (SB 5334), which allows cities to place an excise tax of up to 10% on STRs. Based on the figure of 250 STRs at 4%, the tax would generate $500,000 annually for affordable housing.
   

We Oppose:

Option A: The Regulatory Nightmare

This option is exceptionally complicated, with convoluted requirements that would make implementation challenging. It would sow confusion and discord, slow down the process of registration and create a backlog of applications with a varied range of justifications that would require exorbitant staff time to untangle. This option is based on Alternative 3 in the survey, which received the lowest number (7%) of votes.

​

Even worse, we estimate Option A would result in the elimination of more than 100 of the city's estimated 250 STRs, based on lodging tax revenues, which indicate that as many as half the STRs were not in operation in 2021. Only Type 2 (whole-house) STRs that have been in operation for 90 days in each of the last three years or that meet additional requirements would be allowed to remain open. All Type 1 (owner-occupied) STRs would be allowed--though few such STRs exist. The City has not provided any data on the number of STRs in operation for the past three years, but based on STR lodging taxes collected in 2021 versus 2023, this option would result in significantly fewer lodging options for tourists, less tourism revenue for local businesses, less lodging tax revenue, less fees collected and a smaller contribution to the lodging tax fund.

​

Option A features punitive measures for non-conforming STRs, including those that received verbal approval from City officials to operate in residential zones. These STR owners would be required to pay a fee of $1,427, vs. $476 for STRs in compliant zones.

 

Type 2 STRs may also qualify if:

• the property was formally designated as blighted by the director;

• or the owner must prove that the property was not habitable when purchased and improvement costs must "exceed the ability to make a reasonable return on investment as a long-term rental (a subjective measure);"

• or an owner with a long-term rental unit that's been rented for at least a year before the effective date of this ordinance would be eligible to apply for an STR business license for a second unit, providing both the LTR and STR units operate at the same time (likely an option for fewer than 10 owners, given the costs involved). 

​

While the original goals provided to Madrona Law Group, GovOS and City staff included the instruction to find compromises that would allow non-conforming STRs to continue to operate, as written, Option A would shutter the majority of STRs in our community, harming hundreds of locals and thousands of tourists.

 

Option A could potentially be feasible if the three-year prior operation requirement is dropped, but it would still face major hurdles in terms of a tangle of time-consuming and costly regulations.

 

Option C: The EXTREME Option

If enacted, Option C will result in shuttering an estimated 200 STRs, leaving only 49 in the entire city. This would leave tourists with few options but to stay at local hotels and motels--which do not have the necessary capacity--or find lodging outside the city. There is already a lack of adequate hotel capacity during high season. We may as well post a billboard saying: "Tourists Not Welcome in Port Angeles says City Council."

 

If enacted, tourism dollars will flow to corporate hotel chains instead of staying in the community, and tourists who would have spent their leisure dollars in PA shops and restaurants will spend it elsewhere, hastening the migration of tourism dollars to Sequim and the county.

 

With approximately 200 STRs closed, STR owners will lose vital income they count on to support their families, and the majority of support staff servicing STRs (a number of them likely already in need of affordable housing) will be forced out of business and face challenges to make ends meet. In addition, lodging taxes generated by STRs could easily fall by as much as 75%, resulting in a 20% loss to the Lodging Tax Fund.

 

This option is an even stricter version of the flawed 2017 code. It's based on Alternative 3 in the survey, which received the lowest number (7%) of votes.

 

Type 2 STRs would be capped at only 100, or 1% of single-family residences and duplexes, and confined to commercial and mixed- and high-density zones. The unsaid part of this is that there are currently only 49 of these STRs in the city (7/10th of 1 percent), and a raft of last-minute add-ons crafted by Councilmember Lindsey Schromen-Wawrin would make it exceptionally hard for this number to grow to anywhere near 100--which means Port Angeles would have fewer than 50 STRs if the motion passes.

 

Type 1 STRs (owner-occupied) would be allowed everywhere without a cap, though there are so few, GovOS didn't even bother to count them. Their numbers would also dwindle, due to Councilmember Schromen-Wawrin's extreme last-minute add-ons.

​

There would be an entire series of unanticipated chain reactions if this draconian option is adopted, none of them positive for the residents of Port Angeles, who are already struggling in an exceptionally challenging seasonal economy.

​

​

​

How many Short-Term Rentals are in the City?

There are approximately 250 short-term rentals (STRs) in the City of Port Angeles, which represents between about 2-3 percent of the city's total housing stock.

​

Where are short-term rentals allowed?

According to the 2017 code, the only zones legally available for short-term rentals in Port Angeles are commercial and medium- and high-density zones, the exact opposite of where STRs around the nation are typically found. Yet there is very little space available in these zones in Port Angeles, and very few single-family residences. The permitted zones under the 2017 code include transportation corridors, downtown, near the hospital and near the airport--areas set aside for multi-family housing, hotels and motels, senior facilities, daycare centers and other such uses.

​

Why do short-term rentals currently exist in the city's low- and mixed-density residential zones?

The vast majority of STRs in the city have always been situated in the city's low-density residential zones since approximately 90 percent of Port Angeles' landmass is residential, and there is far less area available in commercial and medium- and high-density zones and very few single-family houses.

 

In 2017 the City passed an ordinance that banned STRs from low- and mixed-density residential zones. The code was not enforced, and it was effectively shelved: Just 3 months after the code change, in response to an inquiry from a real estate agent, then-CED Director Nathan West wrote: “I wanted to share in writing that the City does not enforce against VRBOs and will be considering code changes to further allow for VRBOs within the next two years.”

 

West’s position was repeated by city officials many times over in subsequent years as homeowners checked with the city about the legality of STRs in their zones. Today nearly 80 percent of the city's STRs are found in low- and mixed-density zones and only 49 are in zones allowed under the 2017 code. 

 

The 2017 Ordinance

In 2017, the ordinance allowing STRs only in commercial and medium- and high-density zones was passed in a closed meeting. Meeting participants expressed confusion over the terminology, with CED Director Allyson Brekke consistently calling STRs “long-term lodging” or “extended-stay lodging.” Brekke noted that the issue had to be addressed at that time, but it needed a much longer conversation with all stakeholders present, and that that should happen right away. This never happened.

​

The code was not thoroughly discussed, not subject to an open public reading, despite there being more than 100 pages with changes, and it was never reported as "short-term rental zoning changes." The City Council did not read it before rushing to approve it, with no comments. 

​

The code was considered problematic and flawed from the start, and it was subsequently not enforced. Following its passage, it was shelved. The City simply looked the other way while STRs continued to operate in zones banned by the flawed code, while collecting lodging taxes from all STRs, including those in the "wrong" zones. The City took in more than $1 million in income from STRs in the past decade, 80 percent of the proceeds from STRs in zones that were, on paper, barred from by the 2017 code.

​

Spring 2022: The City Began Consideration of STRs

In April 2022, the City Council invited Madrona Law Group to deliver a presentation with recommendations for short-term rentals. Councilmembers said they would acquire data about the City's STRs prior to beginning regulatory action. This never happened.

​

Closing Down 80 Percent of the City's STRs

In 2023, six years after the failed 2017 code was passed, Councilmember Lindsey Schromen-Wawrin expressed his belief that STRs lead to a lack of availability of long-term rentals, citing studies in large cities that bear no resemblance to Port Angeles. He also introduced politically charged language, for the first time calling the city’s STRs in zones banned by the failed 2017 code “illegal,” and urging “platform-based enforcement.”

​

With no proof whatsoever that these studies were relevant to Port Angeles, no local data and no public comment, the council followed Lindsey’s lead and on June 6, 2023, passed a moratorium on new STRs. They also tasked Code Enforcement with enforcing the flawed 2017 code for the first time, based on complaints.

​

Complaint-Gate

Enforcement action began in June 2023, triggered by complaints. Curiously, shortly after the council’s decision, 118 complaints were lodged. A December 2023 public records request by OPLA revealed that 90 percent were from just 5 people, with one person filing 70 complaints. The city did not publicly disclose this. Instead, it has repeatedly, in print materials and public forums, pushed the fact that there were more than 100 complaints, without acknowledging their suspect provenance.

​

There are approximately 185 STRs (80 percent of all of the city's STRs) in the zones banned by the 2017 code, and as a result of the complaints, the City sent cease and desist letters to more than 100 STR owners, threatening fines of $500 a day if they did not close immediately and cancel all bookings. Many, if not most, STRs closed. 

​

The Money Grab

The City is considering new regulations and fees for STRs. On December 21, 2023, the City released a set of fees that an Airbnb spokesperson stated, unofficially, are the highest in the nation. If approved, the City would receive more than $919,000 in the first year of enforcement, nearly all from just 185 STRs, those sited in zones banned by the 2017 code.

 

There is no basis or justification for the proposed fees, which are far beyond the norm for even the largest and wealthiest cities in the nation, whereas Port Angeles is a small, economically disadvantaged city with inadequate lodging options, where STR income is low 8 months out of the year and the vast majority of l STR owners are locals who are far from wealthy.

 

Business licenses under the 2024 Master Fee Schedule are $25; this pertains to hotels and motels, apartments, senior facilities, other multi-family dwellings and all businesses in the city--with the exception of STRs. The proposed fee for residences operating as short-term rentals in low- and mixed-density zones—where 80 percent of the city’s STRs are located? $2,853, and $951 annually in subsequent years.

​

The 2024 fee for a fire and safety inspection of a Port Angeles residence is $143. If rooms in the same house are used for the purposes of an STR (and the house is in a legally allowed zone) the fee is $666 annually; if the whole house is used as a short-term rental, the fee is $951 annually. The proposed fee for a city employee to inspect an STR home in a low- or mixed-density zone is $1,712—12 times the fee for any other home.

 

This fee is mandatory, whereas there is no such mandate for residences, long-term rentals, B&Bs, hotels and motels, assisted living facilities, apartments or other multi-family lodging. For comparison, the fire department’s highest inspection fee is $475, for a “high hazard.”

​

Combining license fees and requisite fire/safety inspection fees, the proposed fees for short-term rental owners are:

 

• Type I: STR owner lives on the premises and rents rooms 90 days or fewer per year (no City estimate provided, but it’s very few).  Proposed annual fee: $1,236;
   

• Type II: STR is not the owner’s principal residence or is rented out more than 90 days per year (City estimate: 49 STRs). Proposed annual fee: $1,522;
   

• Type II Nonconforming: STRs in low- and mixed-density residential zones (City estimate: 185 STRs, or approx. 80% of all STRs). Proposed fee in 2024: $4,565 (including 3 years of back payments)
   

If all approximately 234 STRs stay in business, the city would collect more than $919,000 in fees from STRs in 2024. In subsequent years, without factoring in any new STRs, short-term rental owners would pay more than $356,000 annually to the City.

​

As a basis for comparison, following are annual STR fees (or business license fees if there are no STR fees) in Washington cities:

​

Bainbridge         $65
Bellingham         $370-$847 initial, $125 annual
Bremerton          $75
Gig Harbor         $650 initial, $40 annual
Leavenworth      $500
Olympia              $50
Seattle                $75
Sequim               $0
Tacoma              $190 

 

A Pause in Enforcement

At the January 17, 2024 Port Angeles City Council meeting, Council Member Brendan Meyer lamented that the council's sudden move in 2023 to begin enforcement of the flawed code was ill-advised and done without information and without thought to unintended consequences. The council has asked for a pause in enforcement while next steps are considered.

 

Why should STRs be allowed in all residential zones?

• There is very little area or residential housing stock available for STRs in the three zones where they have been permitted.

• STRs should be spread across the community so there are fewer in a concentrated area and not pose any kind of burden for a specific area.

• STRs do not belong in high-density zones, taking up space that is meant for affordable housing, where multi-family residences are found. This zones needs to be protected for its intended purpose, especially at this time with great need for this type of housing.

• The City recently redefined its existing R7 zone. While the old definition included references to low-density and single-family homes, the new definition emphasizes "mixed density" and a diverse mix of household units. It specifically omits mention of single-family homes. The new definition has essentially turned low-density residential zones into mixed-use zones. 

• Low- and mixed-density zones are where STRs belong. Nearly all STRs are single-family residences in residential neighborhoods. Homes in quiet neighborhoods are appealing for visiting families, and they offer an attractive setting and a warm welcome to visitors from across the nation and beyond.
   

City Survey by SurveyMonkey

On December 21, 2023, the City of Port Angeles released an online survey by SurveyMonkey seeking public input on the role of short-term rentals in the city. The survey offered five potential suggested regulations regarding how many STRs the city should allow and in which zones. 

​

The City released the survey prior to receiving critical information from GovOS that would provide context for the state of STRs in the City, and without supporting data other than what was presented at a single public meeting at the senior center in mid-January that drew 50 people. The five alternative regulations presented made an immense leap from "unlimited" to regulations that were draconian and unworkable:

​

• Alternative 1: "Unlimited" STRs legal in all zones

• Alternative 2: "Intermediate" 75 STRs in each of the three low- and mixed-density zones

• Alternative 3: "Status Quo" STRs only in commercial zones and medium- and high-density zones (none in residential zones)

• Alternative 4: "Limited" Unlimited STRs in commercial zones and 100 in high-density zones (none in residential zones)

• Alternative 5: "Constrained" 100 STRs in commercial zones (none in residential zones)
   

Survey results showed that the majority of city residents believe STRs are a good lodging option for Port Angeles and that STRs should be situated throughout the city. 

​

Planning Commission Recommends Amending 2017 Code

A summary of the findings from a public STR survey were formally presented during a Public Hearing of the Planning Commission on January 24, 2024.
Key takeaways include: 

 

• High Public Interest: This topic garnered a substantial amount of response, with 1,040 total participants, and marked a record high for City-hosted survey participation.
   

• Positive Perception of Short-Term Rentals: 60% of respondents feel that short-term rentals are a good lodging option for Port Angeles.
   

• Call for Regulation: Nearly 70% of respondents believe that some regulation of short-term rentals should be in place.
   

• Support for Licenses and Safety Inspections: More than half of respondents are in favor of a license and life safety inspection program.
   

• Preference for the Unlimited Option: Of the five alternatives, the Unlimited Option (Alternative #1) received a majority of community support. This was followed by the Constrained Option (Alternative #5).