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Ordinance No. 2024-02 Short-Term Rentals (Approved 021324) Page 1 of 9 ORDINANCE NO. 2024-02 (Formerly Ordinance No. 2023-26) AN ORDINANCE of the City of Bainbridge Island, Washington, adding chapter 5.38 to the Bainbridge Island Municipal Code regulating short-term rental units, requiring owners of short-term rental units to obtain a short-term rental certificate, imposing operational standards, and providing penalties. WHEREAS, the short-term rental of residential properties for vacations and other uses has become increasingly popular in recent years, and WHEREAS, short-term rental units are most commonly booked through third-party internet hosting platforms such as Airbnb and Vrbo, but the same can also be booked through online platforms including but not limited to Expedia, Zillow, Craigslist, Facebook, Hotwire, etc, or directly with a homeowner or tenant, and WHEREAS, short-term rentals contribute to the community’s economic vitality, provide needed visitor accommodations, and enable homeowners to generate income from their property, but also have potential impacts on housing stock, neighborhood character, and quality of life for residents, and WHEREAS, short-term rentals are subject to the City of Bainbridge Island’s lodging tax and the City needs a mechanism for identifying short-term rentals and ensuring that the owners of such properties comply with the lodging tax regulations, and WHEREAS, requiring a short-term rental certificate to operate a short-term rental unit would enable the City to track such properties, ensure compliance with lodging tax regulations, and ensure compliance with operational standards that strike a balance between the economic benefits and potential impacts of short-term rentals. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. Short-term Rentals. A new chapter 5.38 is added to the Bainbridge Island Municipal Code (BIMC) to read as follows: Chapter 5.38 SHORT-TERM RENTALS Sections: 5.38.010 Purpose. 5.38.020 Definitions. 5.38.030 Short-term Rental Certificate Required. 5.38.040 Nondiscrimination 5.38.050 Application and Issuance of Certificate. Page 2 of 9 5.38.060 Advertising and Operational Requirements. 5.38.070 Payment of Taxes and Fees. 5.38.080 Denial, Suspension, and Revocation of Certificate. 5.38.090 Penalties and Enforcement. 5.38.010 Purpose. The purpose of this chapter is to identify the number of short-term rental units in the city, to ensure that the owners of such short-term rentals pay city taxes and fees, and to establish common sense quality of life protections for residents and short-term rental owners. 5.38.020 Definitions. As used in this chapter, the following terms have the meanings set forth below: A. “Agent” means any person or entity authorized to act on behalf of the owner of a short-term rental unit. B. “Broker” means any person or entity that offers, lists, advertises, accepts reservations for, and/or collects whole or partial payment for a short-term rental unit, including but not limited to, on-line websites, on-line travel agencies, and on-line booking agents. C. “Owner” means the person or entity who holds legal or equitable title to a short-term rental. D. “Short-term rental" means the rental of any legally permitted residential dwelling unit, as that term is defined in BIMC 18.36.030, for occupancy for a period of not more than 30 consecutive days. E. “Short-term rental unit” means the residential dwelling unit being rented or offered for short-term rental. Rooms at hotels and inns are not short-term rental units for purposes of this chapter. 5.38.030 Short-term Rental Certificate Required. It is unlawful for any owner, agent, or broker to rent or offer to rent a short-term rental unit in the City of Bainbridge Island without first obtaining a short-term rental certificate from the city. A separate certificate is required for each short-term rental unit that will be separately rented or offered for rent. 5.38.040 Nondiscrimination. No owner or broker shall decline a potential guest, impose different terms or conditions, or discourage or indicate a preference for a guest on the basis of race, color, creed, religion, sex, gender, sexual orientation, gender identity, ancestry, disability, use of a trained dog guide or service animal by a person with a disability, veteran or military status, familial status, national origin, citizenship, immigration status, or lawful business relationship. Page 3 of 9 5.38.050 Application and Issuance of Short-term Rental Certificate. A. Application Contents. The owner or the owner’s authorized agent may apply for a short-term rental certificate by submitting an application on a form provided by the city. The application form shall provide the following information: 1. The name, address, and telephone number of the owner of the short-term rental unit. 2. If the short-term rental unit is located at the primary residence of the owner, which the owner will continue to occupy during the short-term rental. 3. If applicable, the name, address, and telephone number of the owner’s authorized agent for rental of the short-term rental unit. 4. A list of addresses of any and all additional short-term rentals operated by the owner on Bainbridge Island. 5. The address and county plat number of the proposed short-term rental unit, all internet listing sites for the short-term rental, and all listing numbers. 6. The number of rooms in the short-term rental unit and the allowed occupancy stated on the listing platforms or internet sites. 7. The number of existing on-site parking spaces designated for the exclusive use of the short-term rental unit. 8. The name, address, and telephone number of a local contact person who shall be available 24 hours per day, seven days per week for the purpose of responding within 60 minutes to complaints regarding the condition and operation of the short-term rental unit or the conduct of occupants of the short-term rental unit or their guests. 9. A statement, prepared by the owner and submitted with the application, confirming the owner’s intention to operate a short-term rental unit, the planned number of days per year the unit will be available for rent, whether the owner will reside on the property while a portion of it is available as a short-term rental unit, whether the owner occupies the short- term rental unit in its entirety for part of the year, and if they intend to use a property management company. 10. The written consent of any applicable homeowners’ association or condominium owners’ association to the use of the residential dwelling unit as a short-term rental unit. Page 4 of 9 11. A certification by the owner of the proposed short-term rental unit, under penalty of perjury, that all information contained in and provided with the application is true and accurate. 12. Such other information as the city manager or designee deems necessary to administer this chapter. B. Application and Mailing Fees. The application shall be accompanied by a nonrefundable application fee in an amount established by resolution of the city council. The application fee shall be no greater than is necessary to defray the city’s costs of processing the application. In addition to the application fee, the application shall be accompanied by a fee sufficient to cover the cost of mailing the statement referred to in BIMC 5.38.050(A)(9) to all the residents and owners of property within 300 feet. C. Mailing of Notice. The City shall mail a copy of the statement prepared by the owner and submitted with the application to all residents and owners of property within 300 feet. The City will also provide an opportunity for the owner to include an optional personal message for all impacted neighbors. Short-term rental units that are the primary residence of the owner and which the owner continues to occupy during the short-term rental are exempt from the requirements of this subsection. D. Granting of Application. The short-term rental certificate shall be granted unless the grounds for denial, suspension, or revocation set forth in BIMC 5.38.080 exist or the applicant fails to demonstrate the ability to comply with the provisions of this chapter or other applicable rules and regulations. E. Term of Certificate. Short-term rental certificates shall be valid for one year, from January 1 through December 31. The fee will be prorated by month for the first year of application. Certificates must be renewed annually for so long as the short-term rental unit remains rented or offered for rent. F. Contents of Certificate. The short-term rental certificate shall state the maximum number of overnight occupants permitted to stay in the unit, the maximum number of vehicles allowed, and a 24-hour, seven day per week, local phone number of the owner/agent responsible for the short-term rental unit. G. Change of Ownership. The short-term rental certificate shall be personal to the owner and shall not be transferable to any other person or entity. Within 14 days of any change of ownership of the short-term rental unit or the property on which it is located, or within 14 days of any conveyance that materially changes the ownership interest in the short-term rental unit or the property, a new application for a short-term rental certificate must be filed to continue Page 5 of 9 operation of the short-term rental. The new application shall be accompanied by the required application fee. H. Certificate Additional. The short-term rental certificate shall be in addition to the business license required by BIMC 5.04 or any other permit required by the city. 5.38.060 Advertising and Operational Requirements. The following requirements apply to the operation of all short-term rental units: A. Listing to Include Certificate Number. All advertisements and online listings for short-term rental units shall include the short-term rental certificate number. B. Interior Display of Short-term Rental Certificate. The owner or agent shall affix the short-term rental certificate in a highly visible location, within six feet of the main entry door of the short-term rental unit to which it applies. C. Exterior Display of Notice. A notice provided by the City containing a 24- hour, seven day per week, local contact name and phone number of the owner or agent responsible for the short-term rental unit, the number of bedrooms, the maximum number of occupants permitted to stay in the unit, and the maximum number of vehicles allowed shall be posted by the owner or agent in a readily visible location on the exterior of the short-term rental unit. The notice shall be a standardized design with a minimum size of four inches by six inches. The notice shall be in plain view of the general public and shall be maintained in good condition by the owner or agent. Short-term rental units that are the primary residence of the owner and which the owner continues to occupy during the short-term rental are exempt from the requirements of this subsection. D. Special Events. Weddings, corporate events, commercial functions, and other similar events are allowed. Any such events that cause traffic, parking, noise, disorderly conduct, or other impacts in excess of those associated with a residential dwelling unit are prohibited at the short-term rental unit or on the property on which the short-term rental unit is located. E. Permitted Occupancy. The owner or agent shall limit the overnight occupancy of the short-term rental unit to no more than a cumulative total per short-term rental unit of two persons per room plus one additional person per unit (excluding bathrooms, storage rooms, mud rooms, hallways, or other areas not normally associated with overnight occupancy). In addition, the occupancy shall not exceed the stated occupancy listed for the property on the listing platform. All other applicable occupancy laws shall apply. Page 6 of 9 F. Parking, Trash/Refuse Regulations and Avoidance of Public Nuisance. Owners must ensure that overnight guests comply with all applicable City of Bainbridge Island regulations and ordinances related to parking, trash and refuse, and noise, including, but not limited to, BIMC 10.08, BIMC 8.16, and BIMC 9.70. G. Disposable Food Service Ware and Waste Reduction Regulations. Owners and agents must comply with the provisions of BIMC 8.24 as they apply to lodging establishments. 5.38.070 Payment of Taxes and Fees. Owners, agents, or brokers of short- term rentals shall collect and remit to the Washington State Department of Revenue all lodging excise taxes imposed by BIMC 3.65 for short-term rental units located in the City of Bainbridge Island. Where owners, agents or brokers collect lodging excise taxes for properties located both within and outside the City of Bainbridge Island, such owners, agents, or brokers shall clearly identify to the state those lodging excise taxes collected for short-term rental units located in the city. Owners, agents, and brokers shall also be responsible for collection and payment of all other applicable taxes and fees imposed by the city or any other unit of government, including but not limited to any Tourism Promotion Area or Business Improvement District, regardless of whether the short-term rental unit is occupied by the owner. 5.38.080 Complaint, Verification, and Hearing Process A. The City shall provide a system for citizen complaints about short-term rentals to be submitted for review by the city manager or designee. Any such complaint must be accompanied by evidentiary material, such as time stamped photos, recordings, or statements. All citizen complaints will be verified by the city manager or designee. B. Denial, Suspension, or Revocation. In addition to any other remedy provided by this chapter or by any other provision of the city code or other law, the city manager or designee may deny a short-term rental certificate, and if already issued, may suspend or revoke the same, subject to the right to appeal to the City Council as provided in this section. C. Grounds. The city manager or designee for deny, suspend, or revoke a short- term rental certificate when there is substantial evidence to support any of the following grounds: 1. If complaint(s) to the City of violation(s) of this ordinance have been verified and deemed reasonable by the city manager or designee (see 5.38.080.A). Page 7 of 9 2. If a material misrepresentation or false or misleading information was included on the application for the short-term rental certificate. 3. If the short-term rental unit or the use thereof for short-term rentals is in violation of any state or local law, rule, or regulation, including but not limited to, any zoning, building, health, sanitation, safety, or occupancy law, rule, or regulation. 4. If the owner, broker, or agent has violated any provision of this chapter, any other applicable provision of the city code, or any other state or local law, rule, or regulation in the rental, offer for rental, or use of the short- term rental unit; or 5. If the owner, broker, or agent is delinquent in the payment of any outstanding fees, assessments, or taxes owed to the city related to the short-term rental unit or the property on which the unit is located. D. Suspension or revocation. The city manager or designee shall consider the nature and severity of the violation, whether the violation was intentional or inadvertent, the impacts of the violation, whether the violation is a first or repeated offense, and any other factor deemed relevant by the city manager or designee in determining whether a temporary suspension of the short-term rental certificate is appropriate or whether the certificate should be revoked. E. Procedure. Prior to denying, suspending, or revoking a short-term rental certificate, the city manager or designee shall provide the applicant or certificate holder with at least 10 calendar days’ advance written notice of the city manager’s or designee’s intent to consider denial, suspension, or revocation, together with the date, time, and location of a meeting at which the applicant or certificate holder will be given a reasonable opportunity to present reasons to the city manager or designee why the certificate should not be denied, suspended, or revoked. The meeting may be rescheduled with the mutual consent of the city manager or designee and the applicant or certificate holder. Upon completion of the meeting if the meeting is held, or upon the failure of the applicant or certificate holder to attend the meeting, the city manager or designee shall make a final decision on denial, suspension, or revocation, and shall issue such decision in writing, with a copy mailed to the applicant or certificate holder. The denial, suspension, or revocation shall not become final, and any certificate that has been issued shall remain valid, until the city manager or designee makes a final decision as provided in this subsection and the appeal period provided in subsection F below has elapsed. F. Appeal of Decision. The decision of the city manager or designee to deny, suspend, or revoke a short-term rental certificate is appealable to the city council. All appeals must be filed in writing with the city clerk within 20 calendar days of the issuance of the decision of the city manager or designee Page 8 of 9 and must be accompanied by a nonrefundable appeal fee in an amount established by city council resolution. The decision of the city manager or designee shall be stayed by the filing of the appeal and any certificate that has been issued shall remain valid until the appeal is decided by the city council. The city council shall fix a date to hear the appeal and shall provide notice of the hearing to the appellant at least 10 calendar days in advance of the hearing date. The city council shall uphold the decision of the city manager or designee unless the decision is not supported by substantial evidence or is clearly erroneous. The city council shall issue a written decision. The decision of the city council shall be final, subject only to a writ of certiorari being filed with the Kitsap County superior court within 14 calendar days following the date the written decision is issued. G. Public Notice of Suspension or Revocation. If a short-term rental certificate is suspended or revoked as provided in this section, notification of the suspension or revocation shall be provided by the city to all residents or property owners within 300 feet of the short-term rental. Notice may be provided by mailing or by any other means deemed appropriate by the city, such as but not limited to posting the notice on the city’s webpage. H. Prohibited Operations. If a short-term rental certificate is suspended or revoked, the owner and agent shall immediately cease renting or offering to rent the short-term rental unit as a short-term rental. Brokers shall also immediately cease offering, listing, advertising, accepting reservations for, and/or collecting whole or partial payment of rents for the short-term rental unit. If the certificate is suspended, operation of the short-term rental and the related activities of the owner, agent, and broker may resume only upon the lifting of the suspension. If the certificate is revoked, such operation and activities shall not resume until a new certificate is applied for and issued. A new certificate may not be applied for until a period of twelve months has passed from the date of the revocation decision. 5.38.090. Penalties and Enforcement. Any person or entity violating any provision of this chapter shall have committed a civil infraction and shall be assessed a monetary penalty as provided in BIMC 1.24.020. A person or entity violating any provision of this chapter shall have committed a separate civil infraction for each day or portion of which the violation is committed, continued, or permitted and is punishable accordingly. Section 4. Severability. Should any section, paragraph, sentence, clause, or phrase of this ordinance, or its application to any person or circumstance, be declared unconstitutional or otherwise invalid for any reason, or should any portion of this ordinance be preempted by state or federal law or regulation, such decision or preemption shall not affect the validity of the remaining portions of this ordinance or its application to other persons or circumstances. Page 9 of 9 Section 5. Effective Date. This ordinance shall take effect and be in full force on September 30, 2024, which is more than five (5) days from its passage and publication as required by law. PASSED BY THE CITY COUNCIL this 13th day of February, 2024. APPROVED BY THE MAYOR this 13th day of February, 2024. Joe Deets, Mayor ATTEST/AUTHENTICATED: Christine Brown, MMC, City Clerk FILED WITH THE CITY CLERK: January 19, 2024 PASSED BY THE CITY COUNCIL: February 13, 2024 PUBLISHED: February 23, 2024 EFFECTIVE DATE: February 28, 2024 ORDINANCE NO. 2024-02