Short-term rental legislation up for vote Monday

This coming Monday the Council will try to pass the proposed regulations on short-term rentals, such as those listed on AirBnB. But first they have a few more amendments to consider.

The bills (here and here) are being considered by the full Council instead of in committee. That’s in part because they are in the middle of the budget process and committee meetings generally are cancelled to allow all Council members to focus on budget work. But it’s also in part because the original sponsor of the legislation, Tim Burgess, is no longer on the Council since he was appointed Mayor. Council member Harris-Talley inherits his Affordable Housing, Neighborhoods and Budget committee but has no history with the issue or the legislation (Burgess worked on it for over a year). Instead, Council member Johnson is carrying it over the goal line by taking it straight to the full Council.

Nevertheless, there are several amendments to the legislation that will be considered on Monday. They include:

  • Johnson has an amendment changing the effective date out to January 1, 2019, to give the city more time to put the right administrative systems in place to implement it.
  • The original bill allowed operators in the Downtown, Uptown, and South Lake Union Urban Centers who were managing more than two units to continue to operate them. There are three proposed amendments to modify that “grandfather clause.” An amendment offered by Johnson extends it to operators anywhere in the city. In contrast, Herbold and O’Brien propose that operators of two or more units prior to September 2017 outside of the three exempted areas will be allowed to continue to operate any two of them, while new operators are restricted to renting their primary residence and one additional unit.  In addition, Bagshaw and O’Brien would further restrict the exempted area to just part of the Downtown Urban Center.  Obviously there are conflicts between these amendments, so the Council will need to debate which approach it prefers.
  • Council member O’Brien proposes adding a quarterly fee to platform operators (e.g. AirBnB, VRBO, HomeAway) of $2 per night booked in a Seattle unit through their platform.
  • Two competing proposals for modifying the per-night tax imposed on short-term rental operators. Rather than the $10 per night currently in the legislation, Johnson would like to change it to $5 per night for a private or shared room, and $10 per night for an entire unit. O’Brien and Herbold would change it to $8 per night for a private or shared room and $14 per night for an entire unit. Both proposals would also adjust the bill’s language about intended uses of the tax revenues; Johnson would  prioritize debt service on bonds for affordable housing and use the remainder for Equitable Development Initiative (EDI) projects, while O’Brien and Herbold would devote the first $5 million to the EDI, the next $2 million to affordable housing, and any remainder to the EDI.
  • Johnson is considering a proposal that anticipates what would happen if the Washington State Convention Center Public Facilities District, King County, or the State of Washington institute a tax on short-term rentals. It would give the city the option to suspend the collection of its tax if the new tax passed through equivalent revenues to the city.

The entire legislation is actually in three separate bills: the two above that establish the regulatory structure and the tax, and a third that changes various provisions of the land use code. Since the new regulation won’t go into effect until 2019 and land use changes require a public hearing, the third bill will be run through the Council’s legislative process in the spring — assuming the firs two are voted into law on Monday.

 

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