Vacation rentals are symptom of a larger issue | Editorial

Those who have been advocating for a vacation rental moratorium celebrated on Jan. 12, when the San Juan County Council voted 3-0 to enact an immediate halt on new and pending VR applications. The moratorium will be in effect until July 13, 2021.

It’s the first major action of the council for 2021 with its two new members: Cindy Wolf and Christine Minney.

If you had asked us five years ago what the biggest roadblock to affordable housing is we would have agreed it was vacation rentals. A lot has been done since then to find solutions to this issue, and we aren’t as hopeful that this new development will make as big of an impact as its advocates do.

We applauded the county council when it took action in 2018, updating its regulations to require existing permit holders to annually certify compliance. Since then, the county shut down 41 unpermitted vacation rentals and levied more than $100,000 in fines. The fine for operating a vacation rental without a permit is $2,300. The county relies heavily on the public to report such violations, as they are much less visible to our enforcement bodies. If you are aware of someone operating a rental without a permit, contact the planning department at 360-378-2354.

According to then-councilmember Rick Hughes, as of early October, of the 963 total vacation rental permits in San Juan County, 331 of them were flagged as non-compliant per county code. It was anticipated that most of the non-compliant permits currently under review would fail to prove compliance by the required date (December 2020), which would result in their permits being revoked. This would bring the total of active permits in the county down to approximately 450.

Also in 2018, county voters approved a 0.5 percent Real Estate Excise Tax to support the development of affordable housing in the county. The tax is assessed on the purchase and sale of real property within the county, with the buyer paying 99 percent of the tax and the seller paying 1 percent. The REET is the highest it’s ever been thanks to a real estate market that is currently booming.

In September 2020, OPAL Land Trust’s April’s Grove project was completed, offering 45 townhomes in a variety of affordability levels based on income. It was the first new affordable rental housing of significant size in San Juan County in nearly 30 years. Planning for it began in 2015. The total cost of the project was $15.5 million with support as follows: $3.4 million in donations and private grants, including $450,000 from the Orcas Island Community Foundation; $4.4 million in federal, state and local government grants and deferred loans, including $1.9 million in grants awarded or pending from San Juan County voters and taxpayers (REET); $5.5 million in federal Low Income Housing Tax Credits; and $2.2 million in a mortgage loan from Washington Federal Bank.

The application period opened in March 2020, and so far OPAL has received 140 requests, which is more than three times what is available in April’s Grove. The granting agencies that OPAL partnered with had requirements for residents: 20 of townhomes had to be occupied with residents below 50 percent of median income; 21 below 60 percent of median income; nine had to prioritize people who are homeless; five had to house those with mental or physical disabilities; nine must be families with children, and nine had to be large households of four people or more. The remaining occupancies were unrestricted.

Where things stand now, we aren’t convinced that an overabundance of vacation rentals is causing our affordable housing crisis. We urge the council to look at other, critical factors. The county’s 2019 average annual income for one person was $45,777. The statewide average is $62,026. The median home price is hovering around $500,000 and the median long-term rental cost is $1,000. Washington state’s minimum wage is $13.69, however, Seattle passed a law in 2014 that has gradually increased its minimum wage to $15 an hour by 2021.

We are very pleased that our county government is aware of affordable housing and its impact on our communities. For those who are still in need of a long-term living situation, like the April’s Grove applicants who didn’t receive a spot, the reality of low wages and a high cost of living means the struggle continues. We urge the council to find solutions for the root cause of the housing crisis — like raising the minimum wage, providing senior housing and incentivizing affordable living options in Urban Growth Areas — while at the same time addressing symptoms such as vacation rentals.