Overview

• Are short-term rentals allowed? No. Short-term rental of dwelling units (less than 30 consecutive nights) is not permitted in Anacortes. This prohibition applies in all residential zones (R1, R2, R2A, R3, R3A, Old Town, R4, and R4A) and, as of 2024, in all mixed-use/commercial zones (C, CBD, MMU, and CM). The city’s policy aims to preserve long-term housing and mitigate affordability pressures.
• Bed and breakfast operations remain allowed when the owner resides on site and obtains the appropriate approvals. Long-term rentals (30+ consecutive nights) remain permitted in all zones.
• “Grandfathered” units: Some STRs that had an approved city business license prior to code changes can continue operating if they maintain a current city business license and comply with all applicable local and state regulations.
• Unpermitted STRs are prohibited. Operating without an approved city business license is not allowed in Anacortes.

Definitions and City Policy

• Short-term rental (STR): An overnight lodging use that is not a hotel/motel or a bed and breakfast, in which a dwelling unit (or portion thereof) is offered or provided to a guest for a fee for fewer than 30 consecutive nights.
• Policy rationale: The City cites a housing affordability and supply crisis and has adopted rules to protect long-term housing stock. STRs have been prohibited in residential zones since 2019 and in mixed-use zones since 2024.
• Bed and breakfast (B&B): A permitted lodging use in a single-family residential unit that provides transient lodging by renting up to six sleeping rooms, where the owner resides on premises and operates the facility.

Regulatory Timeline (Anacortes)

• 2019: STRs prohibited in residential zones.
• March 2023: Moratorium on new STRs in the Commercial (C), Central Business District (CBD), Marine Mixed Use (MMU), and Commercial Marine (CM) zones.
• May 2023–March 27, 2024: Moratorium extended.
• April 2024: Ordinance finalized to prohibit new STRs in the C, CBD, MMU, and CM zones; existing licensed STRs in those zones may continue to operate under city business license and compliance.

Current Regulations by Zone

• Residential zones (R1, R2, R2A, R3, R3A, Old Town, R4, R4A): STRs prohibited.
• Mixed-use/commercial zones (C, CBD, MMU, CM): New STRs prohibited; units lawfully established with a city business license prior to the adoption of Ordinance 4046 (March 27, 2023) may continue if they maintain a current city business license and comply with local and state regulations.
• Lodging types still allowed (subject to requirements):
  • Bed and breakfast (owner-occupied, up to six sleeping rooms, additional parking for guests, and residential neighborhood compatibility).
  • Hotels/motels and youth hostels (as defined in the code), subject to applicable zoning and code requirements.
• Long-term rentals (30+ nights) are allowed in all zones.

How to Start a Short-Term Rental in This Market

• In the City of Anacortes, you cannot initiate a new short-term rental business (i.e., renting for fewer than 30 consecutive nights) in any zone. If you are committed to operating in the city, pivot to:
  • Long-term rentals (30+ nights) in any zone.
  • A bed and breakfast operation in a residential zone, subject to owner-occupancy, six-room limit, and parking requirements.
• If you are looking for short-term rental exposure in Skagit County:
  • Anacortes within city limits is not viable for new STRs. Research opportunities in unincorporated Skagit County and other Skagit municipalities (e.g., Mount Vernon, Sedro-Woolley). Confirm current local rules, as municipal policies can change.
• Confirm zoning and licensing status before acquisition or listing.

Required Documents, Permits, Licenses, and Guidelines

• For continuing STRs (grandfathered units only):
  • Current City of Anacortes business license (must be maintained).
  • Compliance with all applicable local and state regulations.
• For bed and breakfast operations:
  • Approval through the city’s appropriate permit process.
  • Owner must reside on premises and be the operator.
  • Guest accommodations limited to up to six sleeping rooms.
  • Additional parking required (one space per guest room in addition to parking for the primary residence), and the use must not give the outward appearance of a business in residential zones.
• For long-term rentals:
  • No STR-specific city approvals required for leases of 30+ nights; ensure general compliance with landlord-tenant laws and city code (e.g., parking, neighborhood compatibility).

Compliance and Enforcement

• Unpermitted STR operations are prohibited. If you have concerns about an existing STR or need guidance, contact the Planning, Community & Economic Development Department (PCED).

State-Level Requirements (Washington)

• Washington’s Lodging taxes:
  • Operators who provide lodging (including STRs) are generally required to collect and remit state and local lodging taxes. Establish a Washington Department of Revenue (DOR) tax account and register for applicable lodging taxes.
  • Comply with Washington’s Transient Rental Income Tax and any county/municipal lodging tax programs that apply to the property’s location.
• Business registration:
  • A state business registration (e.g., UBI) may be required depending on the entity structure and activities.

Contacts and Resources (Anacortes and Skagit)

• Planning, Community & Economic Development (PCED) Department
  • Phone: 360-299-1984
  • Email: pced@cityofanacortes.org
  • Responsible for zoning, land use, and STR regulation inquiries.
• City of Anacortes Main Line
  • Phone: 360-293-1900
  • Website: www.cityofanacortes.org
  • Useful for routing business licensing and other city service inquiries.
• Skagit County and Municipal Contacts
  • For STR opportunities outside Anacortes, contact the relevant city or county planning/zoning departments. Confirm whether any county-level STR rules apply to unincorporated areas.

Source Links

• City of Anacortes STR Regulations (April 2024)
  • www.anacorteswa.gov/DocumentCenter/View/26649/Short-Term-Rental-Regulations
• Anacortes Municipal Code 19.44.050 (Overnight Lodging)
  • anacortes.municipal.codes/AMC/19.44.050
• Local News Coverage: Anacortes Bans New Short-Term Rentals (March 2024)
  • www.goskagit.com/news/local_news/anacortes-bans-new-short-term-rentals-in-four-city-zones/article_6c30ad36-e63a-11ee-9d05-1b46575038ff.html
• Local News Coverage: City Council Bans Short-Term Rentals
  • www.goskagit.com/anacortes/city-council-bans-short-term-rentals/article_c4fa5dae-e58b-11ee-a369-d327ec7c9c1c.html
• BiggerPockets Community Note (Skagit County context)
  • www.biggerpockets.com/forums/12/topics/1193317-skagit-county-str-regulations

Investor Takeaways

• New STRs are not allowed in Anacortes. Only existing licensed STRs in C, CBD, MMU, and CM zones may continue, and even those require a current city business license and compliance.
• If you must operate inside Anacortes, consider long-term rentals or an owner-occupied bed and breakfast.
• If you want STR exposure in Skagit County, prioritize unincorporated Skagit County or other municipalities and verify local regulations and zoning prior to purchase.
• State-level lodging taxes apply to any STR operations in Washington; register and collect remits through DOR.