FAQs on Vacation Rentals in San Juan County

Prepared by the Vacation Rental Work Group

9/25/2019

What percentage of residential properties on Orcas Island and in San Juan County currently has a vacation rental permit? As of May 15, 2019 there were 3,120 parcels on Orcas Island developed with a single-family residence (SFR). Of those, 460 (15%, or one in six) had a vacation rental permit (1). There were 9,894 SFR-developed parcels countywide. Of those, 1,038 (10%) have a vacation rental permit1. In the last few years, the annual rate of increase of permit issuance is up about 30% over the average annual rate of the previous two decades.

(1) The exact number of parcels may vary depending on how certain inconsistencies in the data sets are resolved. For details about the methodology used, see the notes portion of the PowerPoint presentation entitled, “Impacts on Housing for Year-round Residents, 25 September 2019.

Does San Juan County currently regulate Vacation Rentals? Yes. The County started requiring a permit for vacation rentals in 1997. In 2018 the County updated its regulations. Vacation Rentals are not allowed on property that is designated as Natural or Conservancy Shoreline, Agricultural or Forest Resource lands, or on Shaw Island, Waldron Island, or if they are connected to the Town of Friday Harbor water system (jurisdiction of the Town of Friday Harbor, not San Juan County). Conversely, a permit is not required for property located in the Eastsound Commercial land use zone, but Vacation Renters in this area must comply with operational regulations.

Permit holders must, among other things, comply with basic rules of conduct and health and safety requirements, notify neighbors within 300 feet, have a designated representative who lives on island, pay applicable taxes, and include their San Juan County permit number on all advertisements.

Is there a difference between regulations for vacation rentals and for Bed and Breakfasts?

Yes, Vacation Rental hosts are prohibited from serving food. Bed and Breakfasts serve food and must comply with health codes. In addition, there are numerous other regulations that apply to Bed and Breakfasts that do not apply to Vacation Rentals. Interestingly, SJC Code (18.40.260) restricts bed-and-breakfasts to owner-occupied parcels, but there is no such requirement for vacation rentals to be owner-occupied. In addition, Bed and Breakfasts are not allowed in the Eastsound Commercial district, whereas vacation rentals are allowed without needing to obtain a permit.

How many vacation rentals are being operated without a permit? There is not yet reliable data available on properties being rented without a permit. However, in 2018, under the newly adopted regulations, the County issued 43 violation notices to individuals operating vacation rentals without permits. In addition, the County will soon begin enforcing its new annual certification requirement. These processes may result in new information about the number of vacation rentals operating without a permit, as well as the number of permits that are active vs. inactive.

What fees has the County collected from enforcing Vacation Rental permits? Since starting to enforce the new 2018 regulations, the county has collected $98,000 in fines from unpermitted vacation rentals.

How many permitted vacation rentals are for an entire structure and how many are for a room in a house? The county’s data does not currently provide information on this distinction.

Do Vacation Rental Permits have to be renewed annually? Permit holders are required to submit to the county an annual self-certification of their compliance with the conditions of their permit.

How long does a vacation rental permit last? The permit lasts as long as the permit holder files the annual certificate of compliance and the permit may pass to a new property owner when a property sells. Permits approved after March 27, 2018 will expire two years after the date of approval if the annual compliance certificates are not filed. Permits issued before March 2018 have no such expiration clause.

Can a Vacation Rental Permit be revoked? A permit issued after March 27, 2018 can expire, or be revoked if the holder does not file annual compliance paperwork with the County. Permits issued prior to March 27, 2018 must comply with the new regulations except that their permit will not expire if they do not file the annual compliance certification. The County Code does not define consequences for permit holders who violate the regulations.

How many Vacation Rental Permits are grandfathered-in prior to the updated 2018 regulations? What are the requirements and restrictions on a grandfathered permits? Of the total permits issued to date, 941 (more than 90%) were issued prior to March 27, 2018. Permits issued prior to March 27, 2018 must comply with the new regulations, except that the permits do not expire if the property owner fails to submit the annual compliance certification.

Are water and septic capacity for a property taken into consideration when issuing Vacation Rental permits? A property must have approved water and septic, however the county does not limit the number of guests in a residence based on the water or septic capacity of that property.

Are Vacation Rentals a residential use or a commercial use? Currently in Washington State, vacation rentals are treated as a residential use.

If my Homeowners Association’s regulations prohibit Vacation Rentals on my property, will the County issue a permit on my property? The County does not ask about private restrictions on its application, nor does the County monitor compliance with Homeowners Association’s regulations or private property covenants.

Are Vacation Rentals that are owner-occupied regulated differently than non-owner occupied? No. Not at this time.

Are properties that could be used for year-round rental housing being used as Vacation Rentals? There is significant anecdotal evidence to suggest that this is happening, but there are no reliable sources of data on this topic. The county does not, for example, ask in its permit process if the property was previously used as a year-round rental.

However vacation rentals that are valued at the lower end of the market, are candidates for providing year-round housing at an affordable rent. When we correlate vacation rental permits on Orcas to assessed values (using 2018-2019 data), we find that 12% (126) of vacation rentals have an assessed value of $300,000 or less and 27% (283) are valued under $400,000. These properties could, arguably, provide year-round housing at an affordable rent.

It is also noteworthy that as the number of permitted vacation rentals increases, we have heard more stories that people are finding it harder to access year-round rental housing and employers are operating at reduced hours because they cannot find a sufficient number of employees, because the employees cannot find housing.

Will applying limits that are designed to slow down the current growth trend of vacation rentals hurt my ability to keep my legally permitted vacation rental? This question can’t be answered until there are new proposed regulations, but historically, new limits have not been applied to existing permit holders.

Are there any limits on the number of vacation rental permits issued by San Juan County or on the number of vacation rental permits held by one owner? No, there are no limits.

If we further regulate vacation rentals, won't we hurt the local economy? There is no doubt that San Juan County's economy is tied to tourism. There are many who feel we’ve reached a state of overtourism, and the question before us now is: Are we negatively impacting the environment and quality of life of this place? Each person will answer this question differently— some with data, some with anecdotes or stories. It is our collective sense of what matters and how to balance the economy with the environment and quality of life that will determine what the islands will be like in the future.

What is required to implement a moratorium? A moratorium simply stops a process in order to prevent further degradation or anticipated negative change while the topic is studied and new guidelines created. Both Eastsound and Deer Harbor’s Planning Review Committee’s have requested that the Council impose a moratorium on the issuance of Vacation Rental Permits pending review and resolution. You can read these moratorium resolutions under the Sources tab on the vacationrentalsorcas.org web site.

Moratorium ordinances are one of the most effective and least burdensome land use decisions a governmental jurisdiction can do. To pass a simple moratorium you need to: 

1. Have a meeting of the commissioners - any meeting - special or regular; 

2. put “VR Permit moratorium” on the agenda; 

3. present moratorium ordinance which only requires: 

  • declaration that an emergency exists - possible change in VR Permit law and people rushing to the permit counter is sufficient; 

  • declare that without a moratorium the opportunity for real land use controls on VR s may be lost

  • state how long - 6 months?  1 year?

Consider these factors: No public hearing  required. No SEPA required. No staff report required. It can be made effective immediately.