Lopez Island, Washington Short Term Rental Regulations Guide for Airbnb hosts

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

YES — Short-term rentals ARE explicitly allowed on Lopez Island, but with significant restrictions and caps.

Short-term rentals (vacation rentals) are permitted in San Juan County, which encompasses Lopez Island, subject to strict regulatory controls. As of May 2022, Lopez Island has a specific cap of 135 vacation rental permits, making it one of the most restricted markets in the county. The county has implemented a moratorium on new applications with limited exceptions, and existing operators face stringent compliance requirements.

The regulatory environment prioritizes housing availability for residents while balancing economic benefits from tourism. Investors must navigate island-specific caps, a competitive permit system, and comprehensive operational requirements.

How to Start a Short-Term Rental Business in Lopez Island

Step 1: Verify Eligibility and Zoning

Critical First Step: Confirm your property location and zoning designation. Vacation rentals are prohibited in:

Natural shoreline designations
Conservancy shoreline designations
Agricultural Resource land use designations
Forest Resource land use designations
Shaw Island and Waldron Island
Owner-Builder Exempt structures

Key Exception: Properties located within Eastsound Village Commercial or Lopez Village Commercial designations have special provisions under Ordinance 10-2025. If you operated a vacation rental in these areas prior to June 25, 2025, you must apply for a provisional use permit by June 25, 2026, to continue operation.

Step 2: Understand the Current Application Status

Important: No new vacation rental applications are currently being accepted except as specifically allowed under Section 5 of Ordinance 10-2025. The county has implemented a moratorium on new permits, and new permits will only be issued using a lottery system when caps are not reached through attrition.

Step 3: Navigate the Permit Cap System

Current Caps (Effective June 2, 2022):

Lopez Island: 135 vacation rental permits
If permits exceed the cap, no new permits will be issued until the number falls below the cap through abandonment, revocation, or other voluntary attrition
Existing compliant permits are protected under the "grandfather clause"

Step 4: Complete Permit Application Process

Required Application Components:

Management Plan: Must be filed with the county and provided to neighbors within 300 feet
Local Representative: Must designate an on-island contact person who can respond to emergencies 24/7
Rules of Conduct: Comprehensive guest guidelines covering all operational aspects

Step 5: Annual Compliance Requirements

Mandatory Annual Certification:

Submit Vacation Rental Certificate of Compliance between October and December 31st
Required regardless of "Active" or "Inactive" status
Failure to submit results in fines and potential permit revocation

Required Documents, Permits, Licenses, and Guidelines

County-Level Requirements

Vacation Rental Permit

Conditional Use Permit Fee: $2,300
Provisional Use Permit Fee: $1,000
Processing Time: Varies depending on land use designation and completeness
Permit Type Determination: Based on land use and shoreline designation

Annual Certificate of Compliance

Online Fee: $145
Paper Submission Fee: $160
Submission Period: October through December 31 annually
Information Required:
- Property address and parcel number
- Vacation rental permit number
- Uniform Business Identifier (UBI) number (if active)
- On-island property manager contact information
- 24-hour emergency contact
- Number of bedrooms as granted by permit
- Updated Rules of Conduct (if changed)

Management Plan Requirements

Must include:

24-hour contact information for owners and local representatives
Emergency response procedures
Guest rules and conduct guidelines
Property boundary information and shoreline access rules
Septic system information and maintenance requirements

State-Level Requirements

Washington State Business License

Requirement: All STR operators must obtain a WA State business license
Authority: Washington State Department of Revenue
Application: Available through Department of Revenue

Uniform Business Identifier (UBI) Number

Mandatory: For all active vacation rentals
Purpose: Required for collecting and remitting state sales and lodging taxes
Authority: Washington State Department of Revenue

Insurance Requirements

Minimum Liability Coverage: $1 million primary liability insurance
Alternative: Coverage through rental platform
Authority: RCW 64.37 (Washington State STR Law)

Tax Obligations

Sales Tax Rate: 10.1% (includes 2.9% local tax)
Collection Requirement: Must collect and remit to Washington Department of Revenue
Reporting: Regular filing required based on revenue levels

Additional Operational Requirements

Fire and Life Safety

Inspection Schedule: Approximately every 2-3 years by Fire Marshal
Smoke Detectors: Required in all bedrooms and common areas
Carbon Monoxide Detectors: Required where applicable
Fire Extinguishers: Required in proper locations with annual service

Personal Property Tax

Due Date: April 30 annually
Scope: All furnishings, decor, kitchen accessories, appliances, linens, towels, supplies
Authority: San Juan County Assessor's Office

Specific Regulations for Short-Term Rentals

Operational Standards

Occupancy Limits

Calculation: Two persons per bedroom plus three additional guests
Age Definition: Guest defined as person over age 2
Bedroom Determination: Based on septic permit, not actual construction

Property Management Requirements

Local Representative: Must be on-island and available 24/7 for emergencies
Response Time: Must be able to respond to guest issues and neighbor complaints
Contact Information: Must be provided to neighbors within 300 feet

Guest Conduct and Property Rules

Posted Rules: Must be clearly posted on-site and provided to guests
Key Areas to Address:
- Noise restrictions and quiet hours
- Parking requirements (minimum 1 space per bedroom)
- Trash removal (every two weeks, secure storage required)
- Water conservation measures
- Outdoor burning restrictions and burn ban compliance
- Septic system care and high-water alarm procedures
- Property boundary respect and shoreline access rules

Prohibited Activities

Structural and Use Restrictions

Only Permitted Structures: Single-family residences and accessory dwelling units
ADU Restrictions: Detached ADUs constructed after June 29, 2007 cannot be vacation rentals unless located in Urban Growth Area (UGA)
No Food Service: Unless owner has separate B&B permit
No Boats, Tents, or Vehicles: Cannot be used as vacation rentals

Location-Specific Restrictions

Town Water Systems: Parcels connected to Town of Friday Harbor water system cannot have vacation rentals (Town requirement, not County)
Private Roads: County doesn't enforce private road agreements (HOA may)
Plat Restrictions: Some subdivisions have voted to prohibit vacation rentals in their CC&Rs

Advertising and Marketing Requirements

Mandatory Information in All Advertisements

San Juan County vacation rental permit number
UBI number
Penalty for Non-Compliance: $2,300 fine for advertising without permit number

Enforcement and Penalties

Primary Violations

Unpermitted Operation: $2,300 initial penalty plus $100 per day of continued operation
Failure to Submit Annual Compliance: Fines and potential permit revocation
Advertisement Without Permit Number: $2,300 penalty

Compliance Monitoring

Method: Active review of online advertising
Enforcement Authority: San Juan County Department of Community Development
Additional Reporting: May report violations to Washington State Department of Revenue

Contact Information for Local Authority

Primary Contact: San Juan County Department of Community Development

Phone: (360) 378-2354
Email: dcd@sanjuanco.com
Website: www.sanjuanco.com/638/Accessory-Dwelling-Unit-Information

Online Permit Center

Website: co-sanjuan-wa.smartgovcommunity.com/Public/Home
Purpose: Submit applications, renewals, and certificates of compliance

Specific Contact for Vacation Rental Questions

Contact: Marc Santos
Email: MarcS@SanJuanCountyWA.gov
Focus: Vacation rental compliance and permit questions

Assessor's Office (Personal Property Tax)

Phone: (360) 378-2172
Email: personalproperty@sanjuancountywa.gov
Website: www.sanjuanco.com/1211/General-Information

Health Department (Septic System Questions)

Phone: (360) 378-4474
Website: www.sanjuanco.com/2169/Health-Community-Services

Washington State Department of Revenue

Website: dor.wa.gov/
Purpose: Business licenses, UBI numbers, and tax remittance

Links to Source Pages

Investment Summary: Lopez Island presents a highly regulated but viable STR market with significant barriers to entry. The 135-permit cap, annual compliance requirements, and $1,000-$2,300 application fees create substantial investment hurdles. However, existing permitted operators benefit from protection under the grandfather clause and can operate within a controlled environment. The key to success lies in securing an existing permitted property or qualifying for one of the limited exception categories under recent ordinances.