Will you chip in to support our nonprofit newsroom with a donation today? Yes, I want to support My Edmonds News!
The Washington Legislature is again considering empowering local governments to tax short-term housing rentals, much to the irritation of homeowners who rent out their properties on platforms like Airbnb and Vrbo.
House Bill 2559 would allow cities and counties, starting in April 2027, to impose a tax up to 4% on short-term rentals to raise money for affordable housing. Uses of the revenue include building new housing, maintaining existing units and providing rental assistance.
If the bill moves forward, the fight over the proposal could be fierce.
Over the past year, Airbnb has pumped nearly $4 million into a political action committee opposing the idea in Washington. The company gave $1 million to the committee in late November. The PAC’s ads appear often on TVW, the state’s public affairs network.
State law defines short-term rentals as those provided for fewer than 30 consecutive nights, but doesn’t cover units in the same home where the owner lives, so long as fewer than three rooms are rented at a time. These rentals have exploded as an option for travelers in recent years.
Similar legislation passed the state Senate last year without Republican support before dying in the House. Initially, that bill called for a statewide tax, but was amended to instead give local governments the option to enact the tax. A fiscal analysis of last year’s bill estimated the new tax would raise about $21 million per year for local governments.
Cities in other states, including New York City, have banned whole-home short-term rentals entirely.
Research on the issue has been mixed.
In Irvine, California, rents decreased 3% after the city effectively banned short-term rentals, researchers found. A 2019 Harvard Business Review study concluded a 1% increase in Airbnb listings resulted in a 0.018% growth in rental rates and 0.026% uptick in home prices.
A Congressional Research Service report last year noted the economic effects of short-term rentals can be overshadowed by other forces, like zoning laws and other regulations.
In a committee hearing Tuesday, numerous Airbnb operators urged lawmakers to oppose the legislation.
Some were older Washingtonians who said they need the income to support themselves in their retirement. And they say most of their guests who would pay the tax are Washington residents vacationing, traveling for work or families of college students.
Thousands come for medical treatment, said Allison Moser, president of the Washington Hosts Collaborative Alliance. Moser, who owns a duplex with her husband as a short-term rental, said the collaborative represents 16,000 short-term rental operators in the state.
“They paid 30% less than for a hotel, but had the comfort and quiet of a home-like atmosphere,” she told the House Finance Committee. “Rentals invest in our community’s healthy economic environment, and we want to continue to do so.”
Counties love the idea, said Brian Enslow, policy consultant at the Washington Association of Counties. With limited options to raise affordable housing funding, they would be open to an even higher rate tax above 4%.
City leaders in tourist towns say short-term rentals are pushing up housing costs for residents, including those who work in the tourism economy.
“Leavenworth is losing its community,” Leavenworth Mayor Carl Florea said. “Every one of these short-term rentals could be, and many of them have been, permanent housing. And now, because of the popularity, they’re used as second homes, and it takes away stock.”
“And if we don’t get a significant tool to begin to address it, we’re going to lose the community completely,” he continued.
Sean Lynn, the secretary of the hosts collaborative, manages short-term rentals in Leavenworth. He suggested a smaller across-the-board tax on all lodging types.
“A broad-based approach would avoid singling out one segment and reduce incentives to shift demand between lodging options,” Lynn said.
Local governments can currently levy a tax up to 2% on lodging, including in hotels, motels and short-term rentals. The revenue is mostly used for promoting tourism. Except in Seattle, various lodging taxes currently cannot exceed a total of 12%. Seattle can’t go over 15.2%.
The committee hasn’t scheduled a vote to move the measure forward.
Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: info@washingtonstatestandard.com.
Only 4%, should be more like 400%. AirBNBs ruin communities, drain supply of starter homes for first time home buyers and ruin lives. We need to legislate the profits out of this model if we want to make the housing market more affordable for first time home buyers. Boomers have no business buying up 4 starter homes in cash and stealing their grandchildren’s future.
I couldn’t agree more. Let’s follow NYC’s lead and ban all non-owner-occupied units. Take Airbnb back to its original business model and toss out the developers.
I hope Angelica (our MEN housing reporter) will followup on this news report; there are so many questions. How many of these short-term rentals do we have in Edmonds? Where are they located; in commercial districts or tucked away in established residential neighborhoods?
What taxes do these business pay now, and how do those compare to taxes paid by regular hotels and motels? Equity suggests taxes should be the same for such similar services.
I am also curious about the process by which municipalities can ban or restrict short-term rentals. My understanding is that both Port Townsend and Walla Walla have prohibited new short-term rentals.
Roger try looking at rentals available in Edmonds WA. You will find a whole bunch. I looked yesterday and I saw a bunch I didn’t go thru the whole list but the ones I saw were in the Bowl of Edmonds. AirB and B s. Daily rates etc. Look for Air Band B in Edmonds WA and you should be directed to the rentals ya might need Zillow with that not sure. Some are condo units a few were large homes accommodating 13 people etc. I also expect that many of them are thru Realtors who rent what they buy?? Anyway I was surprised there were so many and that they were there in the DT. I suppose these are for people coming here on vacation. I don’t have info in front of me right now but many of them were not a lot of money to rent daily and I imagine they can be rented for as long as anyone wants? Hi and Bye.
Roger that’s about 38 and I didn’t count Anywhere but Edmonds. There are also many in Capital Hill and Ballard etc. Most boast views and a few minutes to walk to the beach some say The Bowl some don’t. I don’t care I just thought I would try to help you out. I would say all I saw were established residential neighborhoods. I didn’t see any on 99 etc. More than I expected but who knows right…
There was a time when Edmonds banned short-term rentals. I don’t know when that changed, but it did. Because of the known negatives in a community, I support taxing these rentals for local government benefit and would like a public discussion about how the rentals could be regulated to avoid losing valuable entry housing stock.
https://www.airbnb.com/rooms/1324908476978953433. Please copy and paste. This is an Airbnb 3 doors up from us that is $720. per night in the off season. This house has been reported 4 times to EPD & Airbnb for after hours noise complaints, some parties were lasting until 6am with people hollering. Please tax the @#$%^& out of them. BTW, public records disclose that since purchased in 2024, owner has paid ZERO property taxes.
This is exactly the type of listing that is ruining the housing market. A single family home perfect for a family completely taken offline driving down supply , driving up housing prices, and becoming a neighborhood nuisance. All for some sick business model/profit scheme. If the taxes on single family short term rentals were so ridiculous it took all of the profits out of this business, these property managers would either rent long term or sell. Increasing the housing supply and decreasing housing costs. People and businesses should not be allowed to drive up costs for the entire community for their own financial gain. It’s an unethical business model in areas with limited housing supply.
This particular VRBO assesses ~12.5% in tax.
” Events allowed with prior approval and additional fee” Looks like a great place for a party alright and the owner is advertising that on the listing. Sorry neighbors, would hate to live near that homeowners rental so disruptive to your Edmonds kind of day!
The original Air BnB’s were great, offering a home away from home experience for longer stays or traveling with kids, but I believe it was during the pandemic the model turned into just another scheme for certain folks to gouge the public. Levying big tax increases against them would help, but they offer such a big profit for so many different business interests and individuals that any tax hike will never pass. Too bad for the rest of us who just want a place to house visiting relatives and friends. If you have never rented one of these places, notice that the nightly rental price you see is almost doubled once you pay all the associated fees.
Another model to consider is what Hawai’i is doing (their Senate Bill 2919). The state is allowing local governments to limit short-term rentals in several ways, including limited number of days per year rented; minimum duration of rentals; imposing hotel taxes and fees on them. For them, a big part of this is a shortage of housing available to residents, made worse after the Lahaina fire. But some of it, especially the taxes and fees part, would be what this article focuses on.
Darn if you do and darn if you don’t. I don’t really look at this site, but it appears that the Best Western in Edmonds is booking in June and the site says hurry rooms limited. That’s June so I suppose July and August are packed. I would love to know the answer to this. So, If you take away the other properties discussed here it would maybe take away more business $$ for your core. I’m guessing that summer is the busiest time for rentals. Tough call it is. Personally, I wouldn’t want anyone telling me what to do with my money either, but I see the point as far as loud and disturbing neighbors. Homes like these large ones offered would not be good starter homes for families too big, And $$$$ where money is a concern. The tiny ones many wouldn’t be large enough for a family. And if sold to developers some here in comments hate them too.? SO, what do ya do? People are going to want profit to sell and developers certainly want profit after building. unfortunately, Edmonds is not an affordable city for most people. That is what I see. What to do probably nothing can be done and should it? Close to or Waterfront, water view is scarce and expensive in all states.
FIFA World Cup is coming to our region. Millions of tourists are going to pay for their lodging in this region, and Edmonds should be actively doing the Econ Development work to get a share of those dollars. Allowing only a reasonable amount of vacation rentals, and imposing significant taxes is the way to do that. There are many cities who have figured our the balance between short term rental tax revenues to the city, and the potential to harm the residential character of popular neighborhoods. (I’m writing this reader comment form a vacation rental in Palm Springs, CA. They have it figured out). If Edmonds doesn’t impose smart regulations now to protect the residential character of neighborhoods, we are going to be dealing with some partying soccer fans who trigger unnecessary calls to the police department for noise and disorderly behavior.
Theresa,
We only have four months to figure this out. And if we’re considering additional taxes, I’m not convinced we haven’t already missed the window to implement anything before the World Cup.
What’s more concerning is that we don’t seem to be making a strong effort to promote our city—especially given that the Tourism Promotional Fund remains significantly underutilized. This was money allocated by the City Council specifically to attract visitors.
I’m sure our Economic Development Department has a plan, but from where I sit, it’s hard to see it.