State Land Use Board Weighs in on Oregon Coast Fight Over Short Term Rentals

By David J. Petersen

In November 2021, voters in Lincoln County along the Oregon coast passed Ballot Measure 21-203 in an effort to control what proponents of the measure believe to be lack of regulation of short term rentals (STRs). The measure defined STRs as any dwelling units made available for rent for terms of 30 days or less. Think of vacation lodging available to rent through services like Airbnb, VRBO, and Vacasa.

In three low-density residential zones in the County, Measure 21-203 did three things. First, it prohibited new STR licenses without approval of surrounding property owners. Second, it declared existing STR licenses to be legal non-conforming uses. And third, it provided that any STR license is personal to the license-holder and would expire on the earlier of five years after issuance or upon sale of the underlying property.

Pro-STR interests brought several legal challenges in different forums. One of those challenges was an appeal to the state Land Use Board of Appeals (LUBA) alleging that Measure 21-203 was an illegal land use decision. LUBA agreed with the petitioners and struck down the ballot measure.

The key to LUBA’s decision is the nature of a “non-conforming use.” In common parlance, this means a use of land that was authorized at the time it came into existence, but later became unauthorized by changes to land use regulations. Generally, a non-conforming use is allowed to continue until abandoned, but can be subjected to restrictions on changing or expanding the use. This is commonly called “grandfathering” the use.

An Oregon statute expressly states that counties must allow non-conforming uses to continue except in certain circumstances, limits the grounds on which counties can regulate non-conforming uses, and prohibits restrictions on transfer of the use to subsequent owners of the property. Because of the statute, LUBA concluded that Ballot Measure 21-203 could not stand.

An interesting twist of this case is that there is no similar statute applicable to Oregon cities. Thus, if a city were to enact similar regulations either legislatively or by ballot measure, the analysis of the Lincoln County case would not apply. It remains to be seen if LUBA would find other valid grounds to find similar city regulation of STRs invalid.

The Lincoln County case is just the tip of the iceberg in the public debate over STRs. Opponents of STRs are concerned that STRs bring impacts commonly associated with commercial lodgings to residential areas not designed to accommodate those impacts, such as additional traffic, noise, use of utilities, and need for parking. Conversion of housing stock to STRs also makes it harder for locals to find housing in an already tight market. STR owners and rental companies, on the other hand, tout the economic boon that vacationers bring to coastal communities in the form of local spending and lodging taxes. Stay tuned for further developments on this unpredictable and emotionally charged issue.