PORT ANGELES — “Frustrating,” “disheartening” and “difficult.”
These are all words that individuals in the short-term rental economy repeatedly have used to describe the short-term rental code that Port Angeles adopted in March and will be enforced in November.
The updated regulations require all short-term rentals — dwelling units rented out for less than 30 continuous days — to be licensed and meet a handful of requirements.
Jessica Straits, city communications coordinator, said the goal of the regulations was to update the city’s 2017 code and to effectively regulate short-term lodging operations.
“These new regulations ensure basic safety precautions are met, protect the public and help manage the impact of short-term lodging operations on our neighborhoods,” Straits wrote in an email interview.
One per owner
The updated code only allows one Type 2 short-term rental license per owner, per marital unit and per parcel except under specific situations. It also allows only 200 Type 2 rentals, or dwellings that are not the owner’s or lessee’s principal residence, to exist in the city.
The intention was to decrease corporate ownership of short-term rentals and increase affordable housing stock, according to a council work session from 2022.
However, the code resulted in several local short-term rental owners being forced to take their additional units off the market, devastating for individuals who relied on that income to make ends meet.
Before the code change, Donette Hope owned two tiny short-term rentals. She leveraged her house to buy the first unit, planning for her stepdaughter to rent it long-term. When COVID hit, the job that her stepdaughter was moving to town for disappeared.
Hope and her husband then made the unit a short-term rental “to keep our heads above water,” she said.
When her husband lost his job during COVID, they bought a second unit, and her husband’s job turned into running the short-term rentals.
Now that the city code has banned them from operating the second unit, Hope said they are financially struggling.
“This is what we used to replace that income,” Hope said. “It’s going to be a huge hit, and we don’t know what to do at this point.”
Skip and Shireen Hutchinson used to run three short-term rentals under the same roof, in the house they’ve owned for the past 60 years.
Skip said he retired early from the Olympic National Park due to a disability, so he and his wife relied on short-term rental income. Now that only one unit can remain a short-term rental, they’re struggling to figure out how to hang onto the house.
“It’s been a hard eight months wondering what is going to happen to our future,” Skip said. “We counted on this a lot for our retirement. We’re just trying to make it.”
Before the code changes, data indicated that about 230 short-term rentals existed within city limits, Straits said. Steven Pelayo, president of the Olympic Peninsula Lodging Alliance (OPLA), said the number could have been as high as 300.
As of last Friday, 181 Type 2 and 27 Type 1 short-term rental applications were approved or pending.
That indicates between 22 and 92 short-term rental units didn’t make the transition, either because of the city’s rule of one per owner/marital unit/parcel or due to other reasons.
Inspection time
The city also will require that all short-term rentals undergo a fire life-safety inspection.
Port Angeles’ inspection is based on “jurisdictional best practices from across the state,” Straits said.
“These focus on only the most essential fire and life safety measures, such as ensuring functional carbon monoxide smoke alarms as well as clear and accessible emergency (egress) exists,” she said.
The fire life-safety checklist requires things like handrails, interconnected carbon monoxide and smoke alarms, visible fire extinguishers, functional egress windows with specific net clear openings and more.
According to a Madrona Law Group presentation during a city council work session in 2022, most cities don’t have short-term rental inspection requirements.
Many short-term rental owners said they had a relatively smooth process of updating their unit and going through the inspection. However, others have raised concerns about the costs of required fire and life-safety updates, especially given the fact that long-term rentals in the city are not held to the same requirements.
“Short-term lodging operations have an inherently higher turnover in occupancy, which can lead to a higher potential for safety risks,” Straits said. “This is standard practice by many jurisdictions in Washington. Additionally, city staff have not been directed by council to begin the regulation and licensing of long-term rentals.”
Kathryn MacGeraghty, who manages homes through Blue Sage Property Management, said she was “scrambling to comply with every blessed restriction” the city had. She bought new interconnected smoke detectors, made sure each level had visible fire extinguishers, measured every window and more.
Short-term rental owner Sara Olson said at the time of the interview that she hadn’t begun the process of updating her one short-term rental because the requirement list “is so overwhelming.”
If she has to alter her egress windows, she said she could lose her short-term rental because she can’t afford the $20,000 she estimates the update will cost.
“I don’t make much money at my day job,” she said. “This home is part of the way that I pay bills.”
Pelayo said some people didn’t even attempt to file a short-term rental application because they thought it would cost too much to meet the code.
Caitlin Sullivan said she spent more than $2,000 to update her one short-term rental unit. She had to put in interconnected smoke and carbon monoxide alarms and replace two windows.
“I don’t think that the people that were involved in making the decisions about short-term rentals have ever run a short-term rental, or really potentially even been on the site of an inspection, because the requirements are crazy,” she said.
Many people who run short-term rentals use that income to survive, Sullivan added, and the code requirements could put some people out of business.
“I would hate to see someone lose their house over city council code,” she said.
Trickle-down effects
While short-term rental owners are the immediate and obvious individuals who must bear the brunt of the new code’s impact, there’s another portion of the population that has been impacted: those whose livelihood is built on the short-term rental economy.
That includes individuals like window cleaners, yard care workers and house cleaners.
Rebecca Messinger, who owns Strait Cleaning Services, said she thinks the code will cause her to lose at least five out of the 10 short-term rentals that she usually cleans in Port Angeles.
The cleaning business is her primary source of income, Messinger said, and is crucial for helping her support her and her fiancée’s seven combined children. Her youngest, who is 9 months old, was supposed to start daycare in December. Now, Messinger said, she doesn’t know if she’ll be able to afford it.
“I don’t want to go back to ground zero,” she said. “I’m doing so well.”
Aubrey Thomas, owner of the cleaning business Olympic Happy Homes, used to clean for nine short-term rentals within Port Angeles. As a result of the regulations, she’s already lost two of those properties, which she predicts will cost her about $20,000 a year.
Overall, based on previous short-term rental estimates, the cap of 200 Type 2 units, and short-term rental average occupancy rates, booking numbers and cleaning fees obtained from AirDNA, local cleaners have potentially lost between $164,000 and $192,000 yearly in opportunity dollars, and that doesn’t include future growth.
AirDNA estimates the average occupancy rate for short-term rentals is about 200 nights a year, and that the average booking is made for four nights. That means each short-term rental usually handles an average of 50 separate bookings per year and needs the unit cleaned just as many times.
According to AirDNA, the average cleaning fee for a small or rural city is about $128 for a three-bedroom listing.
Awkward timing
The city passed the code update in March. The application window opened July 1, and any applications not received by Aug. 1 were placed on a waitlist.
That is right in the middle of the busy season for tourism, which threw an additional headache at short-term rental owners, who had to find time to get into their booked units and make required updates.
Sullivan said she made all her updates proactively, using drafts of the code that the city council released last year, because she knew there would be zero non-booked days in July.
“There would have been no way to do any upgrades,” Sullivan said. “We would have had to wait until November or December, and at that point we would have lost the ability to have a permit.”
Hope said she happened to have one cancellation in an otherwise booked summer. She used that time to make necessary changes. If that hadn’t occurred, she said she would have had to cancel guests, which would impact her rating and deprive her of income.
“They should have done the implementation during the slow season,” Pelayo said.
Despite some of the challenges with complying with the regulations, many short-term rental owners said they are in favor of regulation and licensing for short-term rentals. Parts of its current iteration have been problematic, they said.
“I fully support having regulations, 110 percent,” Olson said.
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Reporter Emma Maple can be reached by email at emma.maple@peninsuladailynews.com.
