There has been a steady increase of Washington homeowners who rent out their residences for short-term lodging.

There are 11 residences available to be rented as vacation rentals by owner (VRBO), popular through sites like Airbnb.com, HomeAway.com and VRBO.com.

The Washington City Council Tuesday night was scheduled to review a special use permit for the 12th residence, located on McLean Avenue, for short-term lodging.

Short-term lodging, anything less than 30 days, is permitted in the downtown zoning district and the C-3 Overlay District, which is along Fifth Street.

Owners of residences outside the C-3 Overlay District are required to obtain a special use permit which must be approved by the Washington City Council after it is reviewed by the city planning and zoning commission.

According to Sal Maniaci, community and economic development director, there was an increase in unregistered short-term lodging use in Washington during the August 2017 solar eclipse.

Following that event, some residents were contacted when city staff saw ads for room rentals. They received a letter from the city informing them of the need for a conditional use permit to rent out rooms or homes for short-term use in residentially zoned districts.

Nearly two years later the trend continues to grow.

“We anticipate this trend to continue,” Maniaci said. “I believe travelers are increasingly more attracted to Airbnb-style lodging than traditional hotels. 

“As a regional tourist destination, local residents are seeing the value in opening up their homes or rentals properties for short term lodging,” he added. “And as long as everyone complies with the city’s requirements to ensure a level playing field, we will encourage these uses to give our visitors more lodging options. 

According to Maniaci, owners of short-term rentals contact the city when they see others without a business license on websites.

“They typically police themselves,” Maniaci said. “The owners want a level playing field.”

He noted the short-term lodging is often the only lodging available when a conference, weddings, or festival is happening in town. 

“The city had a market analysis completed in 2018 that found our market could reasonably sustain another 100-room hotel,” Maniaci said. “Until a developer capitalizes on that and builds another large hotel I believe the demand will continue to be met with Airbnb-style homes.”

A short-term lodging is a low-frequency use, which creates minimal traffic, and does not create any commercial activity that should disturb the surrounding properties.

There have been some requests for short-term lodging that was denied by the city’s planning commission.

In those cases neighboring homeowners objected to the request to the increased traffic and other elements brought on by that kind of rental.

Bed Tax

Short-term lodging is subject to the city’s bed tax, a 5 percent tourism tax, and owners must purchase a merchants license. Airbnb, VRBO, traditional bed and breakfasts as well as hotels/motels all have to sign up for the same bed tax.

The cost of a special use permit is $150 and a merchants license is $25.

The tax has been set at the 5 percent maximum since 2007. The council must renew the rate every year.

It is applied to motels, hotels and bed and breakfast establishments and the revenue is used to promote tourism in Washington.

The tourism tax, approved by voters in 1999, authorizes a maximum tax of 5 percent on motel bills.

The tax goes into a tourism fund that is overseen by an appointed tourism commission, which contracts with the Washington Area Chamber of Commerce to undertake tourism activities. The Chamber also contributes to the tourism fund.

Of the revenue collected each year, 95 percent goes for promoting tourism and 5 percent goes to defray expenses of the tourism commission.

The tax money is used to leverage additional funds in the form of state tourism grants and co-op advertising with businesses and other entities.

In the past, funds have been used to fund larger items such as billboards and other advertisements.