Short-Term Rental Rules in the Walla Walla Valley
First the Good News: in Milton Freewater, Oregon and Umatilla County, as well as College Place, Washington and Walla Walla County, you can have a short-term rental property so long as you register your business and pay the appropriate taxes. This actually gives you a lot of options for where you might purchase an investment property that you do not intend to live in but wish to rent out on a short-term basis, IE: a vacation-rental-by-owner or “AirBnB“ property.
Now the Complicated Part: Let’s say you want to own a property within the city limits of Walla Walla that you intend to rent out. There are some additional rules:
A Type 1 License: If you live in your home at least 270 days per year you can apply for a Type 1 license with the city that will allow you to rent out part of your home for up to 90 days each year. Note that for snowbirds this rule does put a constraint on how long you can be gone and stay compliant. Where this license really works well is for people who have an Accessory Dwelling Unit (“ADU“) or “Mother-in-law“ cottage on their property in addition to their primary home. Keep in mind that zoning rules in the area do allow the construction of an ADU anywhere that meet property setback rules.
A Type 2 License: These are grandfathered licenses from before the City of Walla Walla enacted new rules limiting short-term rental properties within the city limits. Under this license, you are free to rent out the property without living on premise. There are some additional restrictions, namely that you have to continue to rent the property and not let the license lapse. These licenses can be transferred in the sale of a property, creating an artificial monopoly. If a new buyer chooses to live in the house, the property automatically reverts to a Type 1 license and cannot be later re-licensed as a Type 2 property.
Here Comes the Commentary: While I generally try to give you just the facts, the history around short-term rentals deserve some commentary. First, the licensing program itself costs more to administer than the revenue from licenses - and don’t blame city hall in this case, because they fully acknowledge this fact and wish it could be different! By creating a grandfathered class of licenses, the city council artificially inflated the value of properties holding these licenses. It’s important to consider who wanted to change the rules in the first place: the local hotel lobby in conjunction with citizen concerned with affordable housing. While it’s commendable to work to improve access to housing, anyone paying attention will realize these efforts were fruitless: our rental market in Walla Walla is very tight and rents continue to increase. In fact, it created a market inefficiency, as we have a number of cottages that are best suited for a weekend getaway and don’t make particularly great permanent homes.
A Final Thought: While the thought of additional income appeals to many, one really needs to think through the effort it takes to run a short-term rental business. When AirBnB first gained popularity, it was as a casual, low-cost, low-frills affair. Now, especially as costs have increased, consumers have expectations of a hotel-like experience. The primary short-term rental clientele for the Walla Walla valley are here only on weekends, and from about April-August to take advantage of good weather and wine tourism. This can make for a lot of work for relatively few rental opportunities, and especially if you aren’t doing the marketing and cleaning yourself but instead paying others, may not yield the expected results.