Spokane owners and operators of short-term housing rentals, those rented for 30 days or less, soon will be required to operate as a business and file for city permits, following the City Council’s unanimous approval of an ordinance to that effect Monday night. 

Owners of the rentals typically advertise on websites such as Airbnb.com and HomeAway.com, and have been unregulated thus far. 

City Councilman Mike Allen says the issue came up over a year ago when code violations occurred at one of Spokane’s Airbnb rentals.

“We had no policy on the books for Airbnb, and it’s the largest vacation rental company in the world,” he says. 

At that point, Allen and the City Council put together a group to study the issues, with the group including representatives from the city’s neighborhood councils, city code enforcement representatives, and others who had a stake in the issue. Its task was to evaluate the best models from around the U.S. to regulate such rentals. 

The two biggest issues, Allen says, were fire codes, which are state regulated, and whether the property is a whole-house rental that isn’t owner occupied. 

A short-term rental is defined as a “residential dwelling unit or bedrooms in a residential unit which are rented to overnight guests for fewer than 30 days.” 

The new ordinance allows both owner-occupied and whole-house rentals to operate as businesses in the city, provided they have the requisite business permits from the City Planning and Development Services Department. The types of structures allowed include single-family residences, duplexes, apartments, condominiums and manufactured homes. The ordinance becomes effective June 11, Allen says. 

Depending on the type of permit, Allen says, owners will be required to pay $100 to $400 annually to operate their rentals. 

“If they want to serve food, they will also have to have those permits, and they will have to pay hotel and motel tax,” he adds. 

Owners must also meet fire code requirements, which are determined by state law. The fire code requires homes rented out for less than 30 days to have a fire sprinkler system, which Allen says can cost from $6,000 to $10,000. Allen says the Washington State Building Code Council turned down a City Council request to waive the sprinkler requirement for homeowners who want to rent out one or two rooms for less than a month, but Allen says he will continue to work with the state to try to get the requirement waived.

Allen previously asserted that no other city in the state was aware of the fire sprinkler requirement that effectively made the short-term rentals illegal.

Dean Lynch, chairman of the Rockwood Neighborhood Council on Spokane’s South Hill and a former city councilman, says he believes short-term rentals should be owner occupied to keep neighborhoods intact, and he doesn’t support whole-house rentals. He says he and the neighborhood council are concerned that the numbers of owners who buy and rent houses out will increase, and ultimately will change the feel of the neighborhood. 

“People live in certain neighborhoods for the value of those neighborhoods. If someone goes to buy up houses and rent them, it changes the dynamic of the neighborhood significantly,” Lynch says. 

Catharine Scherer, a home owner on Spokane’s South Hill, says she will no longer be able to rent out a room in her home through the Airbnb website because of the state fire code, although she supports the ordinance requiring owners to pay the same license fees as others who rent lodging. 

She says she doesn’t think the fire code is fair to people who rent out rooms in their homes. 

“I will have a loss of income by several thousand dollars per year,” Scherer adds. “It helped with my mortgage, and I love Airbnb and I will continue to stay in them,” she says. 

Scherer says as a host, she loved having people stay with her and liked “being representative of Spokane.” 

Marianne Bornhoft, a real estate agent with Windermere Manito LLC, has been a part of the stakeholders group studying short-term rentals in the city. Bornhoft, who helps her clients obtain short-term rental housing in addition to helping them buy and sell homes, says she wants to be sure properties she’s securing are safe and people are following the rules. 

“I also place a lot of executives or people who call and want to rent in certain neighborhoods. These (rentals) are a good alternative for people who can’t stay in hotels,” Bornhoft says, adding that several of her clients have dietary restrictions and need their own kitchen. Bornhoft says she supports the ordinance because it codifies the rules. 

The new ordinance requires all short-term rental owners and operators to comply with all state and local laws. Any violation of the new law is a class one or two civil infraction, according to the ordinance, which would mean a potential fine of $250 or $125, respectively.