Newberg council reviews wide-ranging changes to vacation rental rules, including 2% citywide cap and parking increase

City planning staff presented a proposed package of development-code changes on June 6 aimed at tightening regulation of vacation rental homes in Newberg, including a citywide cap, new parking requirements for larger units and new reporting and local-contact rules for owners and booking platforms.

Planning staff member James opened the work session: “Tonight, we're gonna be taking a look at the vacation rental home policy changes coming out of the planning commission…staff's recommendation is to receive planning commission resolution number 2025‑399 and conduct a work session on the proposed vacation rental home development code amendment language,” he said.

The package would: limit the total number of permitted vacation rental homes to 2% of the city’s households; change the land-use status so that vacation rentals in R‑1 and R‑2 zones require a Type 2 special‑use permit reviewed by staff (with public notice and appeal rights); require operators or agents to remit transient lodging tax (TLT) or to file a city form confirming remittance; require designation of a local manager within 40 miles who can respond to problems; and change parking to one off‑street space per two bedrooms (rounding up) with a two‑space minimum. James said the proposal also moves some TLT‑related definitions and verification steps into Title 3 of the code so staff can check agent remittances.

Why it matters: staff and council members said the changes respond to public complaints about parking, nuisance behavior and tax remittance, and are intended to improve compliance while limiting neighborhood impacts. James said the city’s Rentalscape subscription and an updated TLT form will help staff match bookings to reported remittances.

Councilors and staff discussed several policy choices the council must now decide before any final ordinance: whether to apply the 2% cap immediately to existing permits or to exempt (or temporarily exclude) currently permitted vacation rentals until those permits transfer; whether previously issued conditional‑use permits should continue to “run with the land” or be converted to approvals that run with the owner after a set amortization period (examples discussed ranged from five to seven years); and whether Measure 56 notice (property‑use change notice required under Oregon law) would be needed if the new rules limit the ability of property owners to use their land.

City legal/administrative staff explained the Measure 56 concern: changes that limit an owner's ability to use property can require mailed notice before adoption so affected owners may testify. James said staff will research whether a Measure 56 notice is required if council chooses to change how long older permits remain attachable to land.

On enforcement and compliance: staff proposed a 90‑day application window for existing operators to apply under the new rules and up to one year to complete any physical modifications (for example, adding required parking). The draft also calls for a 45‑day cease‑operation window where the city identifies an operating, unregistered rental: owners would have 45 days to apply and stop renting while staff processes the application; fines in the draft are $2,000 for a first offense and $5,000 for a second offense for operating without registration (separate financial penalties for delinquent TLT and business‑license obligations remain in existing code).

Councilors asked detailed implementation questions about grandfathering, transfers, and how the cap would be administered if it is reached. Councilor Derek Palma asked whether a permit holder who sells would be moved to the back of a waiting list; staff said operational procedures would be developed after policy direction from council and suggested options including temporarily exempting existing permit holders from the cap until transfers occur. Peggy (councilor) said she preferred limiting the duration that permits run with the land rather than permitting them forever. Other councilors raised equity and neighborhood‑character concerns, noting that HOA restrictions and neighborhood income patterns could affect who is able to use the city’s limited allotment.

On parking and compliance: planning staff said the sliding scale (one space per two bedrooms, rounding up, with a two‑space minimum) was recommended after repeated public comments about parking; staff noted most existing rentals are three to four bedrooms and likely would not be affected, but a small number of higher‑bedroom properties could need additional spaces. Staff explained application review would verify driveway or garage dimensions (9 feet by 18 feet) and that nonconforming parking that blocks public right‑of‑way would not meet standards.

Next steps: staff said they plan a public hearing before council on July 7 and asked for council direction on the unresolved policy questions (cap mechanics, grandfathering timeline and Measure 56). James told council, “the proposed language as drafted applies [the cap] to newly issued permits; previously issued conditional use permits…would continue to run with the land as drafted” unless council directs otherwise.

Quotes in context: James summarized the scope: “The proposed development code amendments are in Title 3, revenue and finance … and Title 15, development code for the zoning use table, parking requirements, and special use standards.” Katie and legal staff joined some clarifying exchanges about tax remittance authority and state law.

The work session did not include final action; council asked staff to return with refined draft language and legal analysis addressing Measure 56, cap administration and enforcement.