Building by building, apartment by apartment, Capitol Hill short-term units coming back on market for long-term renters

This week, you could rent eight apartments in 15th Ave’s Murray Hill building for short-term stays. That will change by May 1st.

Seattle affordability warrior, before you begin your wave of Capitol Hill vigilantism against buildings you believe are skirting the city’s new short-term rental regulations, chill out and wait until May.

“We are planning a mixture of long term rental and Airbnb,” Cathy Qui tells CHS about the plan — within 120 days — for the Murray Hill Apartments, the 15th Ave building she and her husband purchased for just over $4.1 million last March.

 

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Qui and husband Dr. Jianxin Huang — the couple run First Hill acupuncture and herbal clinic Long Life on Boren —  are using the Seattle Department of Construction & Inspections 120-day “implementation period” to sort out the transition away from what has been a booming short-term rental business. The 1800-block 15th Ave, 1925-built building, has been listing up to eight of its 15 units for rent via Airbnb.

Starting January 1st, having more than two units in the building is against the law. In late 2017, the Seattle City Council passed new regulations hoped to rein in the short-term rental boom and make more units available to long-term renters. The package of rules limit owners to only two units at a time on services like Airbnb and also require the platform companies including Airbnb and Expedia to pay for a permit to operate in Seattle.

The council also approved a tax on operators offering short-term rental properties for stays of 29 days or less but that was repealed when state laws changed. Starting January 1st, King County began asking for a larger slice as the King County Convention and Trade Center tax was expanded to “lodging businesses with fewer than 60 units, including short-term rentals.”

Seattle officials have said the goal of the regulations is to “balance the economic opportunity created by short-term rentals with the need to maintain supply of long-term rental housing stock available at a range of prices.”

 

Not every Capitol Hill building with multiple short-term units is waiting to make the change. A representative for E Pike’s St. John’s Apartments tells CHS the building is already in compliance with the new listing rules. CHS reported here on the building’s mix of short and long-term renters and the use of the higher margin Airbnb-style rentals to help keep rents down for the building’s residents.

Under the new rules, some buildings on First Hill and Capitol Hill will be allowed more units if they were operated as short-term rentals prior to September 30, 2017 and the building was built after 2012. A department representative tells CHS a list of legacy property addresses isn’t available. And, no, short-term rental licenses and legacy status are not transferable.

A few of Seattle buildings won’t have to change at all. On Capitol Hill, the 12th Ave Roy Street Commons stands as an unusual pocket of short-term rental activity. The property is a microhousing building which completed construction after permitting in 2015. As far as land use regulations are concerned, it has five units. However, those units translate into 40 bedrooms, all of which have been available for short-term rental. The owners of Roy Street Commons joined a handful of property owners on an appeal with the Seattle Hearing Examiner which claimed that the city did not do a sufficiently thorough review of the proposed short-term rental regulations under the State Environmental Policy Act. The appeal was dropped. And the Roy Street Commons maintains its grandfathered status as a de facto Airbnb hotel.

That’s not the case at St. John’s. And it won’t be at the Murray Hill. Owner Qui tells CHS part of the transition for the building back to long term rentals will include upgrades and that she and her husband are not currently looking to sell now that the regulations are moving into place.

Other buildings across Capitol Hill, the Central District, and First Hill will also begin unwinding their multiple listings. By May, operators are also supposed to include their city license numbers in listings as part of the compliance. Whether the return of handfuls of units here and there around the Hill put a dent in the area’s high rents is another story.

You can learn more about Seattle’s new short-term rental regulations at seattle.gov.

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12 thoughts on “Building by building, apartment by apartment, Capitol Hill short-term units coming back on market for long-term renters

  1. Good.

    Not sure who’d want to live next to what’s essentially a couple hotel units, but I guess if the price is right one could deal with the randoms and parties every weekend.

  2. I wonder how this effects illegal airbnb like the generations space on mercer that used to throw giant parties and stuff and now runs airbnb out of space that is supposed to be a store. wish this space would be used by something for everyone in community instead of just rich tourists

  3. Good story sir ! If you want to run a hotel, get correctly zoned and follow the regulations. Not sure I’d pay $4m for that flop house for long term rentals – the Airbnb reviews make for grim reading…

  4. This is a welcome change. The proliferation of Airbnbs has been a significant factor in reducing supply for long-term renters, and therefore in reducing affordability. And I think the notion that Airbnb units reduce rents for others in a building is pure “landlord fiction.”

    The existence of all-Airbnb “Roy Street Commons” continues to irk. It is a classic example that “money talks” (land-use lawyers are expensive).

    • Really? Do you have any evidence that short term rentals have significant impact? I did the math a year ago and found that short term rentals account for less than 1% of seattle rental market.

  5. I lived in the Murray Hill from 2012 until this past October. It had been the same landlords the entire time until these people bought the building in March 2018. They immediately notified me in March that they were raising my rent $500/month as of June 1st 2018, as well as an extra $50 per month for utilities. When I moved, I was one of three actual tenants left, with the rest of the units being used as air b’n’b. It was a nightmare.

    • If you pay $4m for 15 apts I think the only way to make it work would be Airbnb. You can also help them along by failing a complaint with WA hotel regulations above :)

  6. these hotel like short rentals have destroyed so many buildings. in the elektra, where i live, 75% of the units on my floor are hotel/airbnb. lots of bachelorette parties that are extremely noisy and they leave lots of trash. awful. i wish the city would ban them all together.

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