Short-Term Rental Investment Guide for Walla Walla, WA

Overview: Are Short-Term Rentals Allowed in Walla Walla, WA?

Short-term rentals are permitted in Walla Walla, WA, but with significant restrictions. The city has implemented a two-tier system where owner-occupied short-term rentals (Type 1) are allowed, while non-owner-occupied short-term rentals (Type 2) have been effectively banned for new operations since November 9, 2017. Only existing non-owner-occupied short-term rentals that were lawfully established before this date may continue as non-conforming uses, subject to strict annual renewal requirements and ongoing compliance.

How to Start a Short-Term Rental Business in Walla Walla

For Owner-Occupied Properties (Type 1)

1. Establish Principal Residence: Live in the property as your primary residence for at least 270 days per year
2. Determine Rental Structure: Choose between:
   • Hosted rentals: Rent out rooms while you remain present on-site
   • Unhosted rentals: Rent the entire dwelling, but limited to maximum 90 days per calendar year
3. Obtain Required Permits: Apply for Type 1 short-term rental license with city
4. Meet Safety Requirements: Ensure compliance with fire and safety codes
5. Pay Applicable Taxes: Register with Washington State Department of Revenue and pay lodging taxes

For Non-Owner-Occupied Properties (Type 2)

IMPORTANT: New Type 2 permits are not available. To operate a non-owner-occupied STR in Walla Walla city limits, you must:

1. Purchase Existing Operation: Acquire a property with an existing, valid Type 2 license
2. Verify Non-Conforming Status: Confirm the property had a valid Type 2 permit before November 9, 2017
3. Obtain Transfer: Secure the license transfer upon property purchase
4. Maintain Annual Operations: Use the property for short-term rental at least 29 days per year to avoid abandonment
5. Comply with Renewals: Meet all annual renewal requirements

Required Documents, Permits, Licenses, and Guidelines

Essential Requirements

• Short-Term Rental Permit: Required for both Type 1 and Type 2 operations
• Washington State Business License: Register with Department of Revenue
• Annual License Renewal: Both types require annual permit renewals
• Proof of Principal Residence (Type 1 only): Documentation confirming 270+ days residence
• Property Ownership Documentation (Type 2 only): Proof of lawful establishment prior to Nov 9, 2017

Safety and Compliance Standards

• Fire Safety Compliance: Working fire extinguisher required
• Life Safety Codes: Compliance with all applicable fire and building codes
• Emergency Contact: Local contact person available to respond to issues
• Adequate Parking: Parking sufficient for rental capacity
• Property Insurance: Liability coverage required
• Annual Inspection (Type 2 only): Property must pass annual safety inspection

Tax Obligations

• Washington State Lodging Tax: Collect and remit to Department of Revenue
• Business and Occupation Tax: File appropriate tax returns
• Sales Tax: Applicable state and local sales tax on rental income

Specific Regulations for Short-Term Rentals

City of Walla Walla Regulations

Type 1 Short-Term Rentals

• Owner Occupancy Required: Must be principal residence (270+ days annually)
• Rental Limits:
  • Hosted rentals: No specific day limits
  • Unhosted rentals: Maximum 90 days per calendar year
• Zoning Compliance: Must comply with existing zoning designations
• Accessory Dwelling Units: Allowed if part of owner's principal residence

Type 2 Short-Term Rentals (Non-Conforming Use Only)

• Ban on New Operations: No new Type 2 permits issued after November 9, 2017
• Eligibility Requirements: Must have been lawfully established before November 9, 2017
• Application Deadline: Owners must have applied for license before February 1, 2018
• Non-Conforming Status: Runs with property ownership until abandoned
• Annual Use Requirement: Must rent at least 29 days per year to avoid abandonment
• Six-Month Vacancy Rule: Use deemed abandoned if not rented for 6+ consecutive months

Enforcement and Penalties

• Nuisance Complaint Fines:
  • First violation: No charge
  • Second violation: $750
  • Third violation: $1,000
  • Fourth violation: Permit revocation
• Permit Suspension/Revocation: Possible for code violations or public safety concerns
• Abandonment: Automatic cessation if rental use discontinued

Walla Walla County Regulations

Note: Walla Walla County appears to have more permissive STR regulations. According to industry sources, STRs are allowed in the county with standard business registration and tax requirements, making unincorporated areas potentially more attractive for non-owner-occupied operations.

Washington State Requirements

• Business Registration: Required through Washington State Department of Revenue
• Lodging Tax Collection: 6.5% state lodging tax plus applicable local taxes
• Sales Tax: Combined state and local sales tax on rental transactions
• Insurance Requirements: Municipalities may require minimum liability coverage

Contact Information for Local Authority

City of Walla Walla - Development Services Department

• Address: 15 North 3rd Avenue, Walla Walla, WA 99362
• Phone: 509-527-4423
• Website: www.wallawallawa.gov/government/development-services/short-term-rental-faq
• Email: Contact through city website contact form

Washington State Department of Revenue

• Website: dor.wa.gov
• Business Registration: Available online through Department of Revenue portal

Source Links

• City of Walla Walla Short-Term Rental FAQ
• Walla Walla Municipal Code Chapter 20.139
• Ordinance No. 2017-33
• Walla Walla STR Permit Application
• Short-Term Rental Industry Analysis - Jeff Strickler
• MRSC STR Regulation Examples

Investment Considerations and Market Analysis

Financial Implications

• Permit Costs: $150 application fee plus $150 annual renewal fee
• Insurance Requirements: Minimum $1 million liability coverage recommended
• Operating Restrictions: Type 1 operations limited to 90 days annually if unhosted
• Market Constraints: Type 2 licenses create artificial scarcity, potentially increasing property values for qualifying properties

Strategic Considerations

• County vs. City: Unincorporated Walla Walla County may offer fewer restrictions for non-owner-occupied operations
• Seasonal Demand: Tourism primarily April-August, concentrated on weekends
• Competitive Landscape: Existing Type 2 properties maintain competitive advantages
• Regulatory Risk: Municipal code enforcement actively monitors compliance

Due Diligence Requirements

Before purchasing any STR property in Walla Walla:

• Verify zoning compliance with current municipal code
• Confirm permit status and renewal history for Type 2 properties
• Review neighborhood restrictions and HOA requirements
• Assess proximity to sensitive uses (schools, hospitals, residential areas)
• Evaluate insurance availability and cost for short-term rental operations

This regulatory environment requires careful property selection and strict operational compliance for successful short-term rental investments in Walla Walla, WA.