May 18, 2022
San Juans adopt island-by-island vacation rental cap
Nancy DeVaux

A VRBO search map shows a broad sprinkling of vacation rentals across the San Juan Islands. The county council has set a cap on the number of permits approved for such uses, as the county faces the challenges of the effects of tourism and a tight full-time rental housing inventory.

May 18, 2022
San Juans adopt island-by-island vacation rental cap
Nancy DeVaux

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Updates previous post

A unanimous vote by the San Juan County Commission to cap the number of permits the county will allow for short-term vacation rentals followed testimony from more than 90 citizens at a public hearing today (May 17).

The culture of each of the three main islands (San Juan, Orcas and Lopez islands) was incorporated into the decision setting a cap for each island. 

In discussions over the past few years, citizens from Orcas Island have been most vocal in supporting the existing moratorium and a permit cap [Ed.: See details below]. Much of their testimony spoke to the negative impacts of vacation rentals (VRs), felt especially keenly in certain neighborhoods: loss of the feeling of community, no available housing for long-term renters and impacts on water systems and small private road systems. 

Conversely, many citizens from San Juan Island opposed limits. Owners of vacation rental properties and people who work in property management appeared to have organized, many stating similar words—“I’m against moratoriums and caps”—and expressing the need to support tourism as the basis of the economy. 

Capacity and regularity of Washington State Ferries sailings were considerations in the discussion about whether and at what level to cap vacation rental permits in San Juan County; above, passengers for Orcas and San Juan islands watch as drivers disembark from a full MV Samish at Lopez. (Salish Current photo ©)

Jim Corenman, chair of the county Ferry Advisory Committee, warned that the ferry system “is at or beyond capacity now” and that we should not expect any new boats for a few years. “Increasing VRs will further limit ferry service,” he said. [See “Ferry delays are beyond inconvenience, islanders stress at community meeting,” Salish Current, Jan. 14, 2022]

Island by island

Council deliberations focused on choosing the maximum number of permits for each island, addressing whether to cap the number of permits at a number that will allow for an increase, or one that would require a reduction in the number of permits.

Each council member selected the number for his or her district.

Cindy Wolf, Orcas Island, recommended a reduction in the number of permits to 211 for Orcas Island. This reduces the number of current active and compliant permits, which as of May 6 was determined to be 366, though estimated to be 211 by the planning commission in July 2021.

Current permits will not be impacted but new permits for vacation rentals will not be issued until the number of permits is reduced through expiration or attrition.  After the vote, Wolf said, “This is a campaign promise I made, and I’ve kept it.”

Jamie Stephens, Lopez Island, pointed out that people have vacation rentals for a variety of reasons such as to keep living here or to keep a home in the family. He recommended a cap of 135 for Lopez, which is about 10% over the existing number of  permits (both compliant and noncompliant).

Christine Minney said that while San Juan Island does not feel the impact the same way as Orcas Island, there are without a doubt many people who do not want VRs to go unchecked. She recommended a cap set at 337, the current number of both compliant and noncompliant permits as of May 6.

Ten additional permits will be allowed for all the other islands, including Stuart, Decatur, Henry and others, but VRs specifically are prohibited on Waldron and Shaw Islands.

Countywide, the cap will be 693 VR permits allowed. The council had suggested 1,200 at one point, so this decision represents a significant cap.

— Reported by Nancy DeVaux

Managing paradise: San Juan eyes vacation rental cap

Originally published May 12, 2022

How much tourism is too much? Can communities protect the qualities and characteristics that make a place special? 

San Juan County is now asking these questions via its Sustainable Tourism Planning effort, as a moratorium implemented in January 2021 on issuing new vacation rental permits nears an end, in July. After three years of study and public debate on the issue, the county council is considering a cap on the number of permits allowed, with a range of options before them.

Managing tourism growth by managing the accommodations inventory—especially vacation rentals—is one suggestion in a Tourism and Visitor Study for the county in 2020. 

The next step is a public hearing before the county council on May 17 on a recommendation from the planning commission to cap the number of vacation rental permits allowed on each island. Any decision by the council following hearing will impact future tourism in the San Juans, possibly limiting the number of short-term vacation rentals and supporting a perhaps more sustainable level of tourism.  

The planning commission has recommended setting the cap at the number of active, compliant permits in place at the time the moratorium was established, which was estimated at 650. A more recent staff report says there now 729 compliant and active permits.

In Whatcom, too, and elsewhere

The San Juans are not alone in this challenge; other high-tourism communities have already begun to place limits on vacation rentals. 

Whatcom County held a public hearing on May 11 for more input on the pros and cons of short-term rentals (STRs) in unincorporated areas of the county.

Breckenridge, Colorado, with more than 3,000 houses licensed as STRs, is trying to reduce that number to 2,200. Last September the town council unanimously voted to cap the number of STRs without desk staff and security. Other Colorado ski towns are moving in the same direction.

Woodstock, New York, with a population of around 6,000 residents, voted to cap STR licenses at 285 and placed a nine-month moratorium on issuing new ones. 

Last month the Honolulu City Council passed a bill that essentially bans STRs outside of resort areas on Oahu, by prohibiting Oahu homeowners from renting out their homes, or parts of their homes, for less than 90 days.

These popular tourist locations express similar concerns, among them:

  • loss of housing for locals, particularly for working people
  • loss of a sense of community
  • impacts on watersheds
  • overcrowding in certain areas
  • excess trash
  • noise.

Growing numbers

The question of how many visitors will be coming to the islands annually is further compounded by Washington State Ferries (WSF) which has had frequent ferry cancellations due to lack of available staff and vessel breakdowns. A March 8 report from WSF calls the staff shortages “unprecedented” in the ferry system’s 70-year history. 

Despite ferry problems, “2021 was hands-down the busiest this island has ever been,” said Juniper Maas Mercer, owner of a San Juan Island bed-and-breakfast and a vacation rental house. Maas Mercer is in her 19th year as an innkeeper. As a life-long islander, she has concerns about the changes occurring and is involved in the county’s Sustainable Tourism planning effort.

“There’s no way to have a crystal ball, but we can’t be so short-sighted that we can’t expect it’s going to get crazier,” she said. She said she supports the cap on vacation rentals primarily because, “unfettered, it is a race to the bottom.”

Even more, she said, she feels the pain of seeing people leave the island who have nowhere to live.

“Ten years ago, the Airbnb phenomenon was not even part of the conversation,” Maas Mercer said. She first had a B&B, then converted another house on her property to a vacation rental. To get her B&B permit, she said, she underwent a rigorous hearing process which included an annual unannounced visit from the state Department of Health and meeting a checklist of additional requirements.

There were no regulations for STRs prior to 1997; only B&Bs were permitted. When a vacation-rental ordinance was passed by the county in 2018, there were over 1,000 permitted vacation rentals and no limit on the numbers allowed. Unlike commercial businesses such as B&Bs and hotels, regulation of STRs was minimal.

Taking stock

San Juan County began actively enforcing the vacation rental permit requirements after 2018 by reviewing online advertising, which was required to include the San Juan County vacation rental permit number or compliance number. Those who advertised without a permit number or operated an unpermitted vacation rental were fined $2,300. The county collected $98,000 in fines.

In May 2019 the Orcas Island Eastsound Planning Review Committee requested that the county council enact a year-long moratorium on vacation rental permits in Eastsound’s village core. Their data indicated that more than half of the new structures being built in San Juan County were for second homes or vacation rentals.

A group calling themselves the Vacation Rental Work Group gathered data that indicated 15% of the 3,120 single family homes on Orcas Island had a vacation rental permit. Countywide, out of 9,894 parcels developed with single-family homes, 1,038 (10%) had vacation rental permits. 

After several community meetings attended by over 200 people, the idea of a moratorium on STRs gained momentum. 

Yonathan Aldort introduced the first community meeting in July 2019 on Orcas Island.

“In the five years since I have returned to the island that was my childhood home … I have seen my generation, who unlike older and more established islanders didn’t yet have property of their own, struggle to find a foothold,” he said. “I’ve come to accept friends and acquaintances living in tents, cars, closets, travel trailers, boats, and packed co-housing situations as the norm. Worst of all, I have had to bear witness to kind, generous and industrious people who loved and were loved by this community leave it behind because housing insecurity or cost had become prohibitive for them.”

At the same time, Aldort said, he has watched housing stock being removed from the island’s already limited pool by “a burgeoning vacation rental market,” most heavily impacting working people, young people and families.

The county council did not in 2019 feel ready to set a moratorium, saying they did not have enough information. The idea that vacation rentals might be impacting affordable housing or long-term rental housing was met with skepticism.

The Vacation Rental Work Group website asserts there is significant anecdotal evidence to suggest that the loss of rental housing is happening, and there are no reliable sources of data, noting that the county doesn’t ask in its permit process if the property was previously used as a year-round rental.

The work group contends that “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 provide year-round housing at an affordable rent.”

The moratorium, and beyond

The 2020 county council campaign saw affordable housing as a major issue. Two new county council members, Cindy Wolf and Christine Minney, were elected; two weeks after they took office, the council passed a six-month moratorium on new permits for vacation rentals. 

The moratorium passed without much advance public notice. At a public hearing that followed, the council heard from a group of STR owners calling themselves Hosting on the Rock who supported responsible vacation rentals and assisted their members in participating in the planning process. After the hearing, the council amended the moratorium by reducing its scope to urban growth areas and extending the moratorium until July 2022 to allow the county to amend the vacation-rental code and explore placing caps on the total number of permits. 

The county planning commission was charged with recommending updated regulations and considering a cap. Much of the discussion has focused on determining the exact number of existing permits that are active and compliant. Three options discussed by the planning commission ranged from setting the cap at the estimated 650 compliant permits at that time, setting the cap at the number of those that are both active and compliant (estimated to be 413) or following the guidance of the county council in considering a cap of 1,200 countywide, which would allow for some growth. 

Of the three county council members, Orcas Island representative Wolf has been the strongest advocate for a cap. Jamie Stephens of Lopez Island has said he is not opposed to a cap; although on receiving the recommendation of the planning commission asked, “How did they end up making these Draconian cuts?” Minney has said she is not hearing on San Juan Island about a crisis around vacation rentals, and noted that the council is not limited to the options in the staff report. 

Among remaining questions: If the council accepts the recommendation of the planning commission, would that entail reducing the current number of active permits over time through attrition, or will they select a number that allows for an increase?

If they choose an option that is below the existing number of permits, presumably no new vacation rental permit applications will be accepted until the number of permits falls below the established caps. A system such as an annual lottery might be created to assign new permits when they become available.

— Reported by Nancy DeVaux

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