Are there new Chelan County short term rental rules?

In a previous post we outlined Leavenworth vacation rental rules for those interested in a short term rental in the city limits of Leavenworth. This article will follow up with an overview about Chelan County short term rental rules for properties in unincorporated areas outside of Leavenworth.

Vacation rentals are known as short term rentals or STRS or even “nightly / weekly rentals.” Any rental of a home less than 30 days is a short term rental. Rentals that are longer than 30 days are considered long term rentals and are subject to Washington State’s Landlord Tenant act and not Chelan County regulations.

One of the first skirmishes in the movement to regulate or ban vacation rentals was in the Chiwawa River Pines neighborhood in 2008. In a series of contentious meetings, the HOA voted to amend the covenants (CCRs) and prohibit short term rentals. Many argued that the ban was not new, but merely new enforcement of an existing ban on commercial activities.

The original ban was for rentals shorter than 6 months, which was challenged in court. In 2011, the neighborhood voted again and enacted a ban on any rentals shorter than one month.

Owners of vacation rentals sued and the lawsuit made its way through the court system until it ended up in the Washington State Supreme Court.

The state Supreme Court ruled against the neighborhood and revoked their ban on vacation rentals in 2014.

Neighborhood groups, mostly in the Leavenworth and Lake Wenatchee area had tried for many years to regulate or ban short term rentals and looked to Chelan County Commissioners for help. The commissioners leaned on both the planners at Community Development and the volunteer members of the Chelan County Planning Commision to make proposed rules.

After numerous stops and starts, the Chelan County Commissioners made a decisive move in 2020 by issuing a Chelan County Moratorium against any new short term rentals.  They planned to regulate and issue permits for short term rentals and also wanted a cap on the total number of grandfathered (non-conforming) rental units.

Real estate brokers throughout the Leavenworth and Lake Wenatchee area educated their buyers in 2020 and 2021 about the Chelan County Moratorium (and its extension) and most homebuyers found themselves initialing a copy as proof of receipt.

A final version of Chelan County short term rental rules was enacted in July of 2021 and came into effect in September of 2021.

 These new Chelan County short term rental rules include:

• Permits required for all short term rentals
• Recreational vehicles, tents or other temporary or mobile units are not considered short-term rentals.
• Permits can only be transferred once
• Limits on the number of guests, including daytime occupancy.
• In most parts of Chelan County, the maximum share of short-term rentals is capped at 6 percent of the total housing stock.
•  Existing rentals could be grandfathered into the system 
• New permits only if there is room in the cap
• New permits require minimum acreage based on zoning

Chelan County announced that they would accept permits from existing short term rental owners from September 2021 to December 31, 2021.  Applications for new permits could be submitted after January 1, 2022 but would not be reviewed until all of the grandfathered permits were processed.

Many people were surprised by the low number of permit applications received from existing short term rental owners. Less than 700 permits were issued, though earlier estimates from county consultants suggested that 1300 short term rentals previously existed.  This could be the result of many owners deciding not to continue renting and deciding the permit was not worth the hassle or perhaps there were not as many total vacation rentals as opponents had claimed and they did not represent as big a portion of the housing stock as assumed. It is quite reasonable to assert that while vacation homes are a large part of the real estate market,  STRs are only a small fraction.

After Chelan County approved STR permits for existing rentals, it became clear that all of the Leavenworth zones were oversubscribed and had exceeded the caps. Leavenworth, Lake Wenatchee and Plain were full and no new short term rental permits would be issued for these zones.

In 2022, Leavenworth had permitted STRs at 16% of the total housing stock, while Plain was at 7% and Lake Wenatchee at 9%.  Significant attrition will need to occur before any new permits will be issued in these areas.

Chelan County now publishes a chart showing how much room is in the cap for each zone and where new permits might be available. 

https://www.co.chelan.wa.us/community-development/pages/short-term-rental-statistics

Chelan County Short Term Rental FAQs

Are short term rentals allowed in Chelan County?

Are short term rentals allowed in Chelan County?

Yes, short term rentals are allowed in Chelan County, but they must be permitted and no new permits are going to be issued in Leavenworth in the coming years.

Is it possible to buy a vacation rental in Leavenworth?

Yes, you can buy a property that has an existing str permit. You will likely pay a premium for a property that can be rented legally.

This permit will expire when you sell the property and the new owner likely will not be able to rent it. 

Can I apply for a short term rental permit in Leavenworth or Lake Wenatchee?

No, there are more permits existing than the cap allows. It is possible to apply for a permit in Peshastin or other areas, but not in Leavenworth.

Do the short term rules apply at Kahler Glen ?

Yes, these rules apply for condos at Kahler Glen and for neighborhoods like Ponderosa Estates and Chiwawa River Pines.

Do these vacation rental rules apply for the city of Leavenworth?

No, the city of Leavenworth has its own rules for vacation rentals.

These rules apply to unincorporated Chelan County.