HOOD RIVER — The City of Hood River’s “Hosted Homeshares and Vacation Home Rental” code was recently upheld in federal court, Director of Planning and Building Dustin Nilsen said in a press release April 7.
“The city welcomes the recent ruling affirming Ordinance 2026, which places restrictions on short-term rental (STR) licenses in residential zones,” he said.
The plaintiffs argued the ordinance’s residency requirement violated the Dormant Commerce Clause by discriminating against out-of-state homeowners, thereby limiting their ability to participate in the vacation rental market. Judge Adrienne Nelson of the United States District Court for the District of Oregon disagreed.
In her ruling, Nelson stated, “Plaintiffs have not met the threshold requirement of showing that the ordinances impose a substantial burden on interstate commerce … The court accepts the explanation provided in the ordinances that their purpose is to ensure housing supply, promote quality of life, avoid clusters of vacation rentals, and reduce hardship on out-of-state property owners.”
“The ruling clarified that out-of-state homeowners may still lease their properties to long-term residents and negotiate contracts that permit continued STR use,” Nilsen said. “The residency requirement applies equally to in-state and local homeowners who do not use the property as their primary residence.”
“We are pleased with the court’s decision, which confirms that the city acted within its legal authority to prioritize our community and full-time residents over vacation rentals,” said Hood River Mayor Paul Blackburn. “This outcome supports our ongoing efforts to address the housing crisis in Hood River and to limit the spread of vacation rentals in our neighborhoods.”
Ordinance 2026 took effect in October 2016, amending Hood River’s existing zoning regulations by adding provision 17.04.155, titled “Hosted Homeshares and Vacation Home Rentals.”
“This provision requires that STR license holders in residential zones either reside on the property as their primary residence or have a designated lessee who does,” Nilsen said. “The ordinance granted nonconforming STR license-holders a seven-year grace period to come into compliance. As of October 2023, license holders who did not meet the residency requirement were no longer eligible to renew their STR licenses.”
For more information on City-led housing efforts, visit cityofhoodriver.gov/housing-projects/.
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