Short-Term Rentals

Licensing Requirements

On July 16, Lake Oswego City Council enacted Ordinance 2815. This ordinance allows short-term rentals (rentals of less than 31 days) on certain residential properties, subject to the City’s home occupation/home business licensing requirements. Residents may apply for a license to operate a short-term rental, which began on August 15.

Short-term rentals are limited to properties containing a detached single-family house and may be located within the house or in an approved accessory dwelling unit on the same lot.
The property owner must make their primary residence on the same property that is licensed for short-term rental use, but they need not be present during rentals.
Residents wanting to operate a short-term rental must obtain a business license from the City and certify that they agree to comply with the ordinance’s requirements.

When Establishing Short-Term Rentals:

Frequently Asked Questions

What is a Short-Term Rental (STR)?

The offering of one or more bedrooms (and use of any common area) on a lot containing a single-family detached dwelling for transient residential purposes to serve paying guests for periods of 31 days or less.

Where are they permitted?

STRs are permitted on lots containing a single-family detached dwelling. STRs are not permitted in multi-family or attached housing, including apartments, condos, or townhomes, located in a residential zone.

How much of the single-family detached dwelling can be rented as an STR?

Either the entire dwelling or a portion of the dwelling (a room or rooms, a detached accessory structure, a basement, etc.) may be rented as an STR.

Can I rent out a recreational vehicle or temporary structure as an STR on my lot?

No. Vehicles, such as RVs, camping trailers, or “tiny homes” on trailers, and temporary structures, such as tents or yurts, cannot be used as an STR. The STR must be located within the dwelling (bedrooms and any common area) or a detached accessory structure such as an accessory dwelling unit.

Is there an owner-occupancy requirement for the STR?

Yes. A person who owns a lot containing an STR must maintain their primary residence on the lot; however, the owner is not required to be present on the lot while the dwelling is being rented. In order to be considered as the primary residence, the owner must live there most of the time. In determining this, the property owner is required to submit proof of ownership and residency with their business license application. The City may consider voter registration, or motor vehicle/driver licensing, income tax records, the amount of time each year the owner spent at the residence, or and other relevant factors.

Can I market or use the STR for commercial uses or group events?

No. No other commercial uses are allowed in conjunction with or accessory to an STR.

Can I employ persons to perform duties associated with the STR?

No persons other than family members who reside at the dwelling may be employed or otherwise work in the STR, except persons performing housekeeping, yard maintenance, or other domestic services for the dwelling.

Do I need permits to operate an STR?

Yes. A Home Occupation Business License is required to operate an STR in the City. You are also responsible for complying with all building and fire and life safety codes, and obtaining any licenses or permits that might be required by other jurisdictions, such as the Clackamas County Health Department for food preparation. If you need to complete any remodeling of the dwelling, a building permit will likely be required. Contact the Building Department for more information about building permits and contact the Fire Department about fire and life safety codes. (See contact section.)

How do I get a Home Occupation Business License to operate an STR?

Click here to download the Short Term Rental Business License Application. The fee for a new application is $80.00 and the license is valid for one year.

Do Lodging Taxes apply to STRs?

Yes. When you apply for a Home Occupation Business License for the STR you will also be registered for Transient Lodging Taxes. The tax of 6% is due 15 days after the end of the month of the rental. Taxes on rentals booked through an intermediary, such as Airbnb, are the responsibility of the intermediary. The homeowner is responsible for remitting the tax on any rentals booked directly with them. Transient Lodging Tax Information and remittance forms can be found at www.lakeoswego.city/finance/transient-lodging-tax.

What can I do if I suspect an STR is in violation of any of the City’s requirements or I have a complaint about an STR?

Noise and parking complaints - contact the non-emergency number of the LO Police Department (503-635-0238). Other types of STR complaints or questions - contact the Planning Department (503-635-0290).

What happens if my STR is found to be in violation of City code?

The City may suspend or revoke your business license. You may also be cited and have to pay a fine or appear in Municipal Court.

For additional information on Short-Term Rentals, please contact the Planning Department at 503-635-0290. For background on development of Ordinance 2815, please refer to Planning Department case file LU 18-0034.