Court of Appeals Upholds County's STR License Ordinance

The Oregon Court of Appeals has upheld Lincoln County’s short-term rental licensing program, affirming the County’s authority to regulate vacation rentals through a system first established in 2016 and strengthened in subsequent years.

The August 12 ruling affirmed that the County’s short-term rental ordinances operate as business regulations rather than land-use decisions subject to the statutes cited by rental owners challenging the program.

The court also reversed a lower court’s decision that had invalidated provisions governing occupancy-related events, complaint procedures and administrative hearings.

For Commissioner Casey Miller, the decision affirms a regulatory program that has evolved over a decade in response to community concerns. “The Court of Appeals has affirmed Lincoln County’s ongoing short-term rental licensing program,”

n 2016, the Lincoln County Board of Commissioners – then including Commissioners Claire Hall, Doug Hunt, and Terry Thompson – adopted Ordinance 487, which established a licensing program for short-term rentals.

The board found that the licensing program was necessary because the growth in the number of short-term rental of dwelling units within the County has been accompanied by increased problems of excessive noise, spilled garbage, shortages of parking, and overcrowded accommodations.

Miller said. “In February 2023, less than a month after I took office, the Board strengthened that existing program by establishing geographic regions and license limits to better protect neighborhood livability. The ruling confirms our authority to continue administering the program and make adjustments as community needs change.”

The original program required rental owners to obtain licenses, comply with operating standards, provide designated contacts, observe quiet hours and address complaints. It also established parking and occupancy requirements and required compliance with transient room tax regulations.

A second ordinance adopted later in 2016 clarified the program’s administrative structure and required rental owners to designate a contact person located within Lincoln County.

Miller observed the growing debate while serving as the County’s public information officer and participating in early community discussions.

By 2019, the County had identified additional concerns involving septic systems. Some short-term rentals had incomplete wastewater records or systems that did not correspond to the number of advertised sleeping areas. The Board adopted Ordinance 509 to strengthen wastewater evaluations and tie occupancy limits to septic-system capacity.

As neighborhood concerns continued, the County imposed a moratorium on new licenses in 2020 while the Board considered further changes. The existing licensing program continued during that period; the moratorium concerned new licenses.

In October 2021, commissioners adopted Ordinance 523, expanding the existing program to include a framework for seven geographic licensing regions, limits on the number of licenses, waiting lists and lottery selection when licenses became available.

The ordinance also reduced standard occupancy limits and strengthened complaint procedures. Days later, voters approved a separate ballot measure that would have phased out many short-term rentals in residential areas.

The Oregon Land Use Board of Appeals overturned that measure in 2022

after determining that its phase-out provisions conflicted with state law. The County’s ongoing licensing program remained separate from the invalidated ballot measure.

The Court of Appeals decision affirms the County’s authority to continue administering the licensing program and upholds the challenged complaint and administrative-hearing provisions.

The ruling does not reinstate the voter-approved phase-out measure and does not evaluate whether the program is succeeding or failing. Its significance is that it affirms the legal framework under which the County has been regulating short-term rentals.

“The court’s decision provides greater certainty that we can continue administering this licensing program, protecting neighborhood livability and making necessary adjustments as circumstances change,” Miller said.

After years of public debate and legal challenges, the ruling allows Lincoln County to continue its existing short-term rental licensing program with appellate confirmation of its authority.

Commissioner Chuck said he was pleased with the ruling. “Other Counties without regulations for short-term rentals are facing significant housing shortages and decreased quality of life for their residents. Ten years ago, the county was very forward thinking in anticipating the needs of our community and responding. Lincoln County’s license program allows rentals while also balancing livability for residents.”

The court also reversed the circuit court’s invalidation of provisions concerning:

 Occupancy-related events.

 Complaint investigations.

 Administrative hearings.

 The delegation of specific administrative hearing procedures.

The ruling upheld the County’s licensing framework and preserved the Board’s authority to review and adjust regional license limits through formal public action. The decision did not reinstate Measure 21-203 or its proposed five-year phase-out.

The Court’s full opinion can be read here https://tinyurl.com/LC-STR-DECISION