Two homes sit four blocks apart on Avenue G in Seaside. Same vintage, same three bedrooms, same view of nothing in particular. The one west of US-101 can, under the right conditions, operate as a licensed vacation rental. The one east of the highway cannot, and no amount of remodeling, price reduction, or seller motivation will change that.
That single fact reshapes how a Seaside listing should be priced, how an offer should be written, and what a buyer counting on nightly-rental income is actually purchasing. It is also the fact most often glossed over in the general "Oregon Coast STR" write-ups. So here is the local version, grounded in the ordinances the City of Seaside currently enforces.
The Red Line runs down US-101
Seaside's approach is geographic before it is anything else. The city drew a boundary, informally called the Red Line, that follows US-101. West of the highway, in neighborhoods historically zoned for vacation use, a short-term rental can potentially be licensed. East of the highway, in areas the city has designated for local housing, new short-term rentals are not permitted at all.
Seaside's approach, updated around 2011, was to prohibit STRs in certain purely residential zones, but allow them in other areas without a hard cap. The city drew lines: the closer-in neighborhoods near the beach and downtown permit STRs as "Vacation Rentals" outright, while more inland residential areas ban new STRs. Within the eligible western band, there is no fixed cap on licenses, but each application still has to clear saturation, parking, and safety review before a business license is issued.
| Side of US-101 | New STR license possible? | What that means at closing |
|---|---|---|
| West of US-101 (eligible zones) | Yes, subject to saturation and operating standards | Buyer can apply; income underwriting is defensible with verification |
| East of US-101 (residential zones) | No new licenses | Any listing pitch built on nightly-rental potential does not hold |
For a buyer, that boundary is the first fact to confirm before writing an offer. For a seller east of the highway, it is the reason to price on residential comparables rather than on projected nightly revenue.
The permit does not come with the house
The second surprise catches sellers as often as buyers. A Seaside short-term rental license is tied to a specific owner operating a specific dwelling. When the property sells, the new owner has to apply on their own merits, and the property has to pass its own inspection under the current ordinance, not the ordinance that was in force when the seller first licensed the home.
The City of Seaside requires all owners of Short Term Rentals to go through a STR business license permit application process to use their homes as a short term rental. Not all homes in Seaside will qualify to be used as a STR. The policies set by Ordinance 2024-04 and the Seaside City Council determine the eligibility requirements for properties within the City of Seaside boundary.
That gap between the seller's operating history and the buyer's clean-slate application is where deals quietly fall apart. A home that hosted paying guests every summer for a decade may still fail today's inspection if a bedroom no longer meets the current definition, if parking is short by one space, or if the address sits inside a pocket that has since been reclassified. The listing history is not a warranty. The current ordinance is.
The parking and occupancy math that quietly disqualifies homes
Even inside the eligible western band, the operating standards do more filtering than most buyers expect. Read them as underwriting criteria, not administrative fine print.
- Off-street parking. All STRs are required to meet the minimum off-street parking requirements set by the Seaside Zoning Ordinance. A minimum of two off-street parking spaces are required plus one additional off-street parking space for each bedroom over two bedrooms. A four-bedroom cottage on a narrow lot with a single-car pad is not, on paper, a four-bedroom STR.
- Occupancy formula. The occupancy for a STR is calculated by multiplying the number of bedrooms by 3. Additional criteria could factor in during the review of an application that could further restrict the occupancy of a STR. Roll-out beds and fold-out couches do not increase the count.
- Local contact. A Local Contact who permanently resides in Clatsop County must be named for each Vacation Rental Dwelling. The Local Contact is required to respond to complaints or issues at the vacation rental within 2 hours. Out-of-area owners need a real person on the ground, not an 800 number.
- Annual inspection. All new STR business licenses require annual compliance inspections. The license is a recurring obligation, not a one-time approval.
- Application timing. The applicant will have 180 days from the date the application is deemed complete to schedule and complete an inspection with Community Development staff. Buyers underwriting a summer season need to work backward from that window.
The saturation piece matters too. Industry summaries of Seaside's practice describe roughly a thirty-percent neighbor threshold for active rentals nearby, alongside the parking-per-bedroom rule. STRs are limited to a western region and subject to density and parking requirements. Typically no more than 30% of immediate neighbors can be active short term rentals and one parking space per bedroom on the property is required. A block that already carries several licensed rentals may be closed to a new one, even if the address is technically west of the Red Line.
What Ordinance 2025-01 opened, and what 2026 may close
There is a small, closing window worth flagging for a specific set of owners. On February 25, 2025, the City Council voted to approve Ordinance 2025-01. This amendment allows properties that would have qualified as a VRD prior to July 11, 2024, under the previous ordinances, ninety days from the effective date of the amendment to apply for a short-term rental business license under this ordinance. The applicant shall have owned the property prior to the aforementioned date. Sellers who owned before mid-2024 and let a prior qualification lapse should confirm directly with the city whether any residual pathway applies to their address before listing.
Enforcement in the prohibited zones is not theoretical. Illegal rentals in the no-STR zones are actively fined — Seaside has fined owners $500 or more per day for renting in prohibited areas. That is a meaningful risk for a buyer who assumes the rules are aspirational.
Looking ahead, several industry trackers expect Seaside's permit process to change again this year. Buyers structuring their financing around STR income should treat any pro forma built on today's rules as provisional until closing, and should ask the seller for a representation about current licensed status, current inspection date, and whether any complaint or violation is open against the address. The specifics of any 2026 amendment should be verified directly with the City of Seaside's short-term rental office.
One separate wrinkle for anyone comparing Seaside to nearby unincorporated pockets: Clatsop County's own STR rules apply only outside the incorporated cities and within the Gearhart UGB, so a county-level rule change does not touch a Seaside address, and a Seaside change does not touch an Arch Cape address. The jurisdiction on the deed is the jurisdiction that governs.
A pre-offer verification checklist
Before writing an offer on a Seaside home where STR income is part of the value story, work through these in order:
- Confirm with the City of Seaside Planning Department that the specific address sits in an STR-eligible zone west of US-101.
- Ask for the property's current STR business license number and its most recent annual inspection report.
- Measure off-street parking against the two-plus-one-per-additional-bedroom standard.
- Recalculate occupancy at three per bedroom and rerun any pro forma at that number, not at the seller's advertised sleeping count.
- Identify a Clatsop County-resident local contact who can accept the two-hour response obligation.
- Get written acknowledgment that the license does not transfer and that reissuance depends on a fresh application under current ordinances.
- Build a contingency into the offer that ties closing, or a price adjustment, to successful license issuance in the buyer's name.
For sellers, the same list works in reverse. A listing that can answer items one through six in writing before it goes live is a listing that will not lose its buyer at the inspection stage.
FAQ
Does a licensed STR next door mean my address will qualify too? No. Saturation is measured at the time of your application, and the presence of nearby active rentals can count against you rather than for you. Neighboring density is one of the review factors, not a precedent.
Can I close first and apply for the license afterward? You can, but you are taking on the risk that the application is denied for parking, saturation, or a zone reclassification you did not check. Tying the offer to license issuance, or at least to a written eligibility confirmation from the city, protects the buyer from paying an STR price for a residential home.
What about a condo that has always been a vacation rental? Condo eligibility depends on both city zoning and the individual HOA rules, and some Seaside condo buildings restrict or exclude nightly rentals through their own governing documents. Both layers need to be checked, not just the city's.
Does the 30-day threshold have a workaround? The city defines short-term rentals as rentals of fewer than thirty days. Longer-term rentals are a different regulatory category with different tax and habitability implications, and they are not a substitute for an STR license if nightly income is the goal.
Seaside real estate rewards the buyer and seller who ask the specific question before, not after, the earnest money is down. If you are weighing an offer on a home where vacation-rental income is part of the math, or preparing to list a property whose value depends on how the next owner can use it, Cindy Hawkins Colley at Heron Realty can walk the address through the current ordinance with you and help you write the contract around what the city will actually allow. Let's Connect.
