Lincoln County commissioners finish work on vacation rental limits, drastically — but gradually — cutting back licenses

 

By KENNETH LIPP/YachatsNews

NEWPORT — With little discussion, Lincoln County commissioners Wednesday approved an order limiting the number of vacation rental licenses it set last week, bookending seven years of deliberation.

Chair Kaety Jacobson noted prior to the unanimous vote that although commissioners used a percentage of tax lots to derive the license limits for seven geographical zones, they are specifying a number of licenses allowed per zone. The order establishing those caps and the boundaries for the zones were the final pieces of Ordinance 523, adopted in October 2021 but not implemented until August of last year due to legal delays.

The commission passed its first ordinance requiring vacation rental licenses in 2016, rejecting commissioner Claire Hall’s recommendation that license caps be established at that time. The number of rentals in unincorporated areas tripled by 2020, and commissioners imposed their license moratorium while working on a new ordinance to address complaints about crowding, parking, trash, noise and other issues. That work was delayed by the Covid pandemic, wildfires, staffing, a successful ballot measure and lawsuits.

Two lawsuits re-filed last month by vacation rental owners challenging Ordinance 523 are scheduled for hearings in February. The county feels confident that because they are business licenses that it can withstand legal challenges – as they have elsewhere in Oregon.

The new caps are drastic compared to the current number of licenses — only 181 licenses will be allowed in all of unincorporated Lincoln County outside cities, compared with the current number of 502. It could take close to a decade to reach 181 at the current pace of 33 a year due to property sale, surrender or license revocation.

But it won’t be necessary to reach 181 total for the first new licenses to be awarded by lottery.

Where could there be new licenses?

Licenses could be awarded in any of the five zones west of U.S. Highway 101 if they drop below a new 2 percent cap, even if the total in the county is more than 181. And once the commissioners’ almost three-year moratorium on new licenses expires Feb. 22, applicants to operate in zones six and seven, located east of Highway 101 and north and south of Oregon Highway 20, could be awarded one of 19 available licenses.

Worried that vacation rentals were more likely to convert existing houses in the two large eastern zones, commissioners set a lower 1 percent cap in both – but that still allows for seven new licenses in zone six and 12 in zone seven.

Those zones aren’t all timberland. Neighborhoods up and down the coast on the east side of Highway 101 are popular destinations, and some, like Beverly Beach, even have direct access to the shore without having to cross the highway.

Lisa Combs, who administers the vacation rental licensing program for the Lincoln County Sheriff’s Office, said interested applicants could get on the waitlist once the moratorium lapses.

It will likely take some western zones much longer than others to open up for applications. Since the commissioners imposed their moratorium on new licenses in March 2020, the number of licensed rentals declined from about 600 to 502.

That decline has occurred relatively evenly among zones in proportion to the number of vacation rentals there, but the percentage of tax lots now licensed as rentals varies widely between zones, from about 5 percent to almost one quarter.

All zones exclude areas within the city limits of Lincoln City, Newport, Siletz, Toledo, Newport, Waldport and Yachats.

• In zone one, from the Tillamook County line to the Depoe Bay Bridge, containing 140 licensed rentals (6.6 percent of tax lots) and popular vacation spot Gleneden Beach, the new cap is 42.
• Zone two, from the Depoe Bay Bridge to Yaquina Bay Bridge, with 23 vacation rentals (5.1 percent) and a concentration in the Otter Crest area, will be capped at nine licenses.
• In zone three between the Yaquina Bay and Beaver Creek bridges, there are currently 40 vacation rentals (13.9 percent) in clusters just south of South Beach and north of Beaver Creek. The zone will be capped at five licenses.
• Zone four, from the Beaver Creek Bridge to the Alsea Bay Bridge, currently contains 139 licensed vacation rentals (10.3 percent), the majority of which are located in the unincorporated Bayshore subdivision north of Waldport. The new cap there is 26.
• Zone five, from the Alsea Bay Bridge to the Lane County line, has the highest concentration of vacation rentals — 23.6 percent of tax lots, or 90 out of 380 physical addresses. At 2 percent, the new cap there is seven licenses.

The rest of the ordinance

County staff’s work to implement Ordinance 523 after its adoption in fall of 2021 were stymied by a voter-approved ballot measure, which superseded the county ordinance. Then in August 2022, the Oregon Land Use Board of Appeals ruled that ballot measure unlawful.

With Ordinance 523 back in effect, the county notified licensees of its new requirements, including:

• Occupancy is reduced from three per bedroom plus two per household to two per bedroom plus two per household. Occupancy applies to all hours of the day, not just overnight, to prevent holding events. The new limits go into effect May 1.
• Vacation rental owners whose properties are on a septic system must have it inspected by a state-certified technician and present that report to the county by Dec. 31. Vacation rental owners are not required to obtain a new inspection if they have a report from within the past three years. Any deficiencies noted in the report must be corrected within 120 days, and if the capacity of the system is found to be less than the two-per-bedroom occupancy, that becomes the new occupancy limit. Only 139 of the county’s 502 licensed rentals are on sewer, all within the Gleneden Beach-Lincoln Beach area.
• License holders have 30 days after their license expires each year to apply for renewal or it will be revoked. Combs has said a substantial portion of people have historically failed to renew in this time period.
• Complaints and violations will now be adjudicated through an administrative hearing process. Previously, the county’s only recourse for enforcing compliance was through circuit court, meaning code enforcement officers essentially had to witness violations. Now, complaints will be heard before a hearings officer employed by the sheriff’s office who will determine whether a violation occurred and what sanction it should carry. That decision could be appealed to the circuit court.

More work

Ordinance 523 delegates authority to the county counsel’s office to adopt report requirements, fees, hearing procedures and notice, evidentiary requirements, standard of review and decision, and enforcement options for the administrative hearings.

Jacobson told YachatsNews she’d asked county counsel Kristine Yuille to inform them once the limits were in place if she wanted to convene some sort of panel discussion or submit a written framework to the commission.

Fees will likely need to be increased to deal with the increased administrative costs of the licensing program, which would likely be discussed before the annual budget process and go into effect July 1.

Commissioners also plan a workshop on potential future tweaks to the ordinance. Newly elected commissioner Casey Miller submitted a list of ideas he raised at last week’s meeting, including increasing the number of geographic zones, defining number of vehicles and/or parking spaces per property and exploring the concept of requiring county residency to hold a license, among others.

• Kenneth Lipp is YachatsNews’ full-time reporter and can be reached at KenLipp@YachatsNews.com