Chelan County handling several short-term rental lawsuits

Clay Gatens with Gatens Green Weidenbach PLLC represents the seven short-term rental applicants. He said in an interview last week that the number of land use related lawsuits the county is facing is irregular for counties.

“Chelan County is the odd one out,” he said. “If there’s smoke, there’s fire.”

The county disagrees.

The county passed new regulations in July 2021 for homes rented out for 30 days or less. Under the new code, short-term rental owners need to apply for a permit as an existing or new rental business.

Chelan County has so far processed 776 applications — this includes every application that has been approved, denied or canceled. As of Nov. 10, the county does not have an exact count on the number of denied appeals. And several more applications are being processed.

Sixty-two permit applications had been denied as of July, said Kirsten Ryles, Chelan County short-term rental manager, during a commissioner’s meeting six months ago.

At least 19 of these denials have been appealed to the county’s hearing examiner, which have been upheld. Another two appeals are scheduled to be reviewed Wednesday.

As of Nov. 10, seven of the 19 hearing examiner denials have made it to Douglas County Superior Court and recently have been appealed to the Washington State Court of Appeals, Division III.

A group of short-term rental owners from across the state, the Community Lodging Operators of Chelan County, also filed an appeal to the state Growth Management Hearings Board in September 2021.

The Growth Management Hearings Board ruled in March that the county’s short-term rental code was mostly in line with state law. The one exception was one change that made to the code, cited by the county as a scrivener’s error, that violated public participation requirements.

The Community Lodging Operators of Chelan County have since appealed the Growth Management Hearings Board’s decision to Chelan County Superior Court in April.

Gatens said that their firm didn’t join the original Growth Management Hearings Board appeal because they felt a lot of the points were not winnable and not getting at the crux of the issue.

“Nobody disagrees that the industry needs to be regulated and managed,” he said. “I haven’t thought about or really endeavored to say the code should be changed to say this. My job is to look at it and go, ‘This is what it says.’ My short answer is to actually apply the code fairly, consistently.”

He attributes the issue to a deep-rooted issue connected to Community Development’s high staff turnover as current staff that are interpreting and applying the code were not part of the initial process in drafting it.

The short-term rental code was workshopped for several years with stakeholders like short-term rental owners, community members and Community Development staff.

Gatens also said that the department lacks morale and leadership as the top positions like director and assistant director have been empty for a while now or have seen a lot of turnover in the last couple of years.

And having represented many of the short-term rental appeals reviewed by the hearing examiner, Gatens said he believes the hearing examiner has not been impartial and unbiased, instead siding with the county on all the appeals.

“When you couple the lack of institutional knowledge regarding the process for developing the code, lack of leadership and an ordinance that is somewhat clunky, you create an environment to have these inconsistent applications of the code,” Gatens said.

Gatens said he believes this problem goes beyond the short-term rental code as the whole department has “adopted the philosophy of trying to deny as many permits as possible, as opposed to figuring out whether or not they really can be accommodated under the code.”

Deanna Walter, Chelan County Assessor, is currently the interim director for Community Development. The last director, Jim Brown, left the position in Dec. 2021 citing a worsening relationship with one of the county commissioners. The assistant director position is also currently vacant.

Walter said in an email that Gaten’s “personal perceptions are inaccurate.”

“A three-person team, which includes the STR manager, has processed all of the STR applications,” she said in an email. “The team has not only been consistent in its make up, but it also has been consistent in its decisions, evaluating every application by the same set of standards, as set forth in the Chelan County Code.”

Walter also said that there is no lack of leadership in the short-term rental division. Ryles has been with the county from the start of the process and is doing an exceptional job, Walter said.

“Ryles is fully supported by both the interim Community Development director and the Board of County Commissioners,” Walter said.