Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Most short-term rentals in Spokane are operating illegally. Now the city knows where they are.

In Spokane, the vast majority of short-term rentals, such as Airbnbs and Vrbos, are operating without a license. City officials with access to new tools are hoping to bring them into the light.  (Christopher Anderson)

In Spokane, the vast majority of short-term rentals, such as Airbnbs and Vrbos, are operating without a license. City officials with access to new tools are hoping to bring them into the light.

City staff say that, until recently, they were unable to figure out how many short-term rentals were operating, let alone enforce local laws on the owners operating illegally.

But now, Granicus, a contractor with information-sharing agreements with every short-term rental platform licensed to operate in Washington, is offering city staff an opportunity to spot out-of-compliance vacation rentals. The City Council is taking the opportunity to raise fees and make the second attempt since 2015 to tighten rules for the industry.

As of May, Granicus found that 648 short-term rental units in Spokane were being advertised on various platforms. The city has only issued 44 active permits.

“We know there are a lot of units operating that are not supposed to be currently,” said assistant city planner Amanda Beck to the City Council on May 15. “We don’t want to tell them you’re out of compliance without first having code in place that says here are the steps to come into compliance.”

Once the City Council adopts updated rules, city staff will begin using data from Granicus to monitor for ongoing compliance, Beck added.

City code only allows short-term rentals in residential zones, though there has been a loophole that allows for them to be permitted elsewhere, the Inlander reported. Proposed code amendments would allow for short-term rentals in nonresidential zones, loophole-free, though at a slightly higher cost.

Applying for a short-term rental permit costs $150, with a $100 renewal fee. A draft proposal recommended by the city Planning Commission and prepared by city staff would increase permit fees to $200, still with a $100 renewal fee. Applications in nonresidential zones would cost $300 with a $150 renewal fee.

City staff also recommend a $105 per hour fee for an annual inspection by the Spokane Fire Department, and an additional $2 per night platform fee.

Some of the details of what may come before the City Council for a vote are still hazy, such as unit limits. For instance, the Planning Commission had recommended allowing limiting the number of short-term rental units based on the structure, not the lot, to allow more short-term rentals on properties with accessory dwelling units, such as an apartment or cottage.

Councilwoman Lori Kinnear, who along with Council President Breean Beggs is working on drafting the ordinance , said she was taking a closer look at the limits on how many units could be put on a property.

“Certainly there’s a place for (short-term rentals), but there can be too much of a good thing,” Kinnear said. “I have some concerns with the long-term impacts on taking housing off of the rental market.”

In briefing documents drafted in mid-May for the City Council, Beck pointed to research from the National Bureau of Economic Research and a recent paper published in the Journal of Urban Economics that found increases in short-term rental units were correlated with drops in the housing supply and higher home prices and rent.

Beggs has been focused on two other aspects of the code, he said: directing revenue from an excise tax on short-term rentals into a fund to incentivize workforce housing and penalizing unregistered short-term rentals before they can come into compliance.

The city has a fund to incentivize housing affordable for households making 60% of the median income. Beggs proposes using some of the revenue from short-term rentals to create a second fund for encouraging housing affordable for closer to the median income.

Beggs has also repeatedly argued that it would be unfair to the few short-term rental operators who operate under the law if there isn’t some kind of consequence for those who rent out a space without paying fees.

“People have been complaining for years that they have been paying the fees, and the other people haven’t,” Beggs said. “I just think it’s unfair if we don’t hold people accountable for doing what everybody knew they were supposed to do, and many people just ignored.”

In a May 15 committee meeting, Beggs asked planning staff why the initial ordinance draft hadn’t included some kind of requirement that back fees be paid before a property could receive a permit to continue operating as a short-term rental.

“I think there’s some concerns that that is not the way that we’ve enforced other actions in terms of code compliance, and there’s also some concerns about potentially opening up legal challenges,” said Planning Director Spencer Gardner.