Latta v. Chelan Cnty.

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TOM LATTA, Appellant, v. CHELAN COUNTY, a Washington municipal corporation, Respondent.

RIVERSIDE CABIN n/k/a RIVERSIDE CABIN AND LOFT LLC, a Washington limited liability company, Appellant, v. CHELAN COUNTY, a Washington municipal corporation, Respondent.

CEA, LLC - RIVERSIDE VACATION HOME, LLC, a Washington limited liability company, Appellant, v. CHELAN COUNTY, a Washington municipal corporation, Respondent.

SIMS KELLY, LLC, a Washington limited liability company, Appellant, v. CHELAN COUNTY, a Washington municipal corporation, Respondent.

No. 39261-9-III

Court of Appeals of Washington, Division 3

October 31, 2023

UNPUBLISHED OPINION

Pennell, J.

This is a consolidated appeal of land use decisions brought by four owners of short-term rentals (STRs)^[1] located in the city of Leavenworth's Urban Growth Area (UGA).^[2] In 2021, each of the appellants applied for permits to continue their STR operations as existing nonconforming uses. Chelan County denied all four applications, and the county's hearing examiner affirmed. The STR owners ^[3] claim they are entitled to nonconforming use permits because either their STRs qualify as preexisting lawful uses or a 2021 county resolution provides broad amnesty for existing unpermitted STRs. Both arguments are mistaken. We therefore affirm the hearing examiner. FACTS AND PROCEDURAL BACKGROUND The primary question on appeal is whether the appellants lawfully operated their properties as STRs before the enactment of local zoning prohibitions. Each of the appellants began their STR operations sometime after 1999. By way of background, we note that the properties of all four appellants are located in the Leavenworth UGA and all the properties are zoned as low-density residential.

The city of Leavenworth first adopted an ordinance prohibiting STRs (referred to as "transient accommodation") in low-density residential zones on December 12, 1989. Ordinance 852 amended the portion of the Leavenworth Municipal Code (LMC) dealing with permitted uses in low-density residential zones, and provided that structures in such zones "not [be] used as a Bed and Breakfast or Transient Accommodation." Clerk's Papers (CP) at 1459 (emphasis added). A "transient accommodation" was defined as "a dwelling unit^[[4] or motel room regularly rented to transient guests with a less than monthly rental period for each individual or group of guests." Id. at 1458.

Ordinance 852 granted a one-year amortization period, allowing preexisting transient accommodations or bed and breakfasts to temporarily continue operating. After that one-year period ostensibly ending in December 1990, the ordinance provided that "any such non-conforming use shall be considered a zoning violation and shall be discontinued." Id. at 1459.

Ordinance 852's prohibition on transient accommodations in Leavenworth's low-density residential zones was originally codified at former LMC 18.20.020 (repealed by Ordinance 1589), and has persisted within the code in the decades since.^[5] Since at least 2000, Chelan County has adopted Leavenworth's land use designations for the county's unincorporated urban growth area around the city. See Chelan County Code (CCC) 10.12.030.^[6]

Despite the prohibition on STRs in low-density residential zones beginning in the early 1990s, enforcement appears to have been fairly lax. That began to change in recent years. In April 2017, the city of Leavenworth stepped up enforcement actions against STRs. See CP at 5468.

Chelan County subsequently established a task force to study the proliferation of STRs. In 2021, after considering the task force's recommendations, Chelan County adopted an STR code. See CCC 11.88.290. The STR code's purpose, in relevant part, is:

to promote the public health and safety by protecting year-round residents' enjoyment of their homes and neighborhoods by minimizing the nuisance impact of short-term rentals on adjacent residences and by minimizing the detrimental impact of excessive short-term rentals on the affordable housing supply.

CCC 11.88.290(1)(C). In line with this purpose, the STR code places strict limits on the number, location, and occupancy of STRs permitted in unincorporated Chelan County, along with restricting the zones in which they can be operated, and providing for a permitting process for new and existing STRs. See CCC 11.88.290(2)(A)-(D), (3)-(4).

The STR code also expressly "adopts the cities of Cashmere, Chelan, Entiat, Leavenworth, and Wenatchee land use regulations, development standards and land use designations, as they apply to [STRs]" insofar as those cities' codes already regulated STRs in each city's respective UGA. CCC 11.88.290(2)(C)(iv) (emphasis added). The county's STR code provides that "[a]ll" claims of existing nonconforming STRs within a UGA are "subject to joint review by the county and the affected city." CCC 11.88.290(2)(C)(iv)(b) (emphasis added).

Following Chelan County's adoption of its STR code, each of the four appellants applied for permits to continue their STR operations. There is no indication in the record that any of the STR owners' properties had ever previously been granted a use permit. After joint review by Chelan County and the city of Leavenworth, the county denied all four permit applications. The STR owners then appealed to the county's hearing examiner.

In arguments before the hearing examiner, the STR owners claimed that their properties should be treated as preexisting lawful uses and, alternatively, that the 2021 STR code forgave any prior illegality. The hearing examiner rejected these arguments. The examiner explained that none of the appellants' STR operations were ever lawful because STRs were not permitted in their respective zones of the Leavenworth UGA at the time they began operating. Because the STR owners' operations were never at any point lawfully established, the examiner found they were ineligible to be allowed as nonconforming uses under the county's code.

Each STR owner petitioned in Douglas County Superior Court for review of the hearing examiner's decision. The owners then moved unopposed to consolidate their land use appeals. With the parties' consent, the superior court transferred the consolidated appeal to this court for direct review. See Stipulation and Order for Transfer of Case to Court of Appeals (Division III), Latta v. Chelan County, No. 22-2-00081-09, at 2-3 (Douglas County Super. Ct. Oct. 25, 2022).

ANALYSIS

An aggrieved party may seek judicial review of a local government's land use decision under the Land Use Petition Act (LUPA), chapter 36.70C RCW. See RCW 36.70C.010; City of University Place v. McGuire, 144 Wn.2d 640, 647, 30 P.3d 453 (2001). Under RCW 36.70C.150(1) as here, a superior court may transfer the judicial review of a land use decision to this court so long as the parties consent and agree the existing record is sufficient for review. When considering a LUPA appeal, we stand in the shoes of the superior court and review the record that was before the hearing examiner. See McMilian v. King County, 161 Wn.App. 581, 589, 255 P.3d 739 (2011).

The appellants argue the hearing officer's decision was contrary to fact and law, based on the appellants' alternate arguments that their properties either (1) qualified as legal nonconforming uses, or (2) were granted amnesty by the county's 2021 STR code. This type of challenge falls under RCW 36.70C.130(1)(b), (c), and (d). We review questions of law de novo and defer to factual findings so long as they are supported by substantial evidence. See McGuire, 144 Wn.2d at 647; City of Redmond v. Cent. Puget Sound Growth Mgmt. Hr'gs Bd., 136 Wn.2d 38, 46, 959 P.2d 1091 (1998). Nonconforming use doctrine

The nonconforming use doctrine is a "narrow exception" to the rule that municipalities have "nearly plenary power" to zone for the public's health, safety, and welfare. King County Dep't of Dev. & Env't Servs. v. King County, 177 Wn.2d 636, 646, 305 P.3d 240 (2013). The nonconforming use doctrine allows some uses of property to continue, notwithstanding that the use violates later-enacted zoning regulations, if the use was "lawfully established" prior to the change in zoning law. McMilian, 161 Wn.App. at 584; see Rhod-A-Zalea & 35th, Inc. v. Snohomish County, 136 Wn.2d 1, 6-7, 959 P.2d 1024 (1998); see also 36 Michael F. Connelly, Washington Practice: Washington Land Use § 11:7, at 440 (2022 ed.) (noting nonconforming uses are "allowed to continue in spite of zoning regulations to the contrary" only if they "lawfully existed" prior to the change in zoning regulations).

The right to continue a nonconforming use encompasses only the right not to have the use immediately terminated in the face of a zoning ordinance that prohibits the use. See Rhod-A-Zalea, 136 Wn.2d at 6-7, 9-10, 12; McMilian, 161 Wn.App.at 592. Cities and counties may eventually terminate nonconforming uses, so long as they provide landowners a reasonable amortization period. See Rhod-A-Zalea, 136 Wn.2d at 7-8; McGuire, 144 Wn.2d at 648-49; Ackerley Comms., Inc. v. City of Seattle, 92 Wn.2d 905, 920, 602 P.2d 1177 (1979). Nonconforming uses are disfavored, and the desirable policy of zoning legislation is to phase them out. See Rhod-A-Zalea, 136 Wn.2d at 7-8; McMilian, 161 Wn.App. at 592; Open Door Baptist Church v. Clark County, 140 Wn.2d 143, 150, 995 P.2d 33 (2000).

"[T]he initial burden of proving the existence of a nonconforming use is on the land user making the assertion." Van Sant v. City of Everett, 69 Wn.App. 641, 647-48, 849 P.2d 1276 (1993). This burden requires the landowner to demonstrate: (1) the use existed prior to the contrary zoning ordinance, (2) the landowner has never abandoned or discontinued the use, and (3) the use was lawful at the...