Houses in Oregon farm and forest zones can’t be used for short-term rentals without an analysis of potential agricultural impacts, according to the state’s Court of Appeals.

The appellate court has rejected rules enacted by Clackamas County, which allowed farm and forest dwellings to be used for Airbnb and similar short-term rental services.

Short-term rentals have come under fire for potentially interfering with agricultural activities and inflating the price of rural properties, but they’ve also allowed many farmers to diversify their incomes.

“We are sharing our property with strangers. That’s not always comfortable, but that’s how we can fix our tractors,” said Scottie Jones, an Oregon sheep farmer and founder of the U.S. Farm Stay Association.

In 2020, Clackamas County updated its zoning regulations to require registration and other parameters for short-term rentals, but otherwise allowed temporary lodging in dwellings in farm and forest “resource” zones.

The county reasoned that dwellings remain dwellings whether they’re occupied on a long- or short-term basis, so rentals don’t change a residential house’s fundamental nature.

The Court of Appeals has disagreed with the county’s “contention that short-term rental is indistinguishable from the ordinary residential use of a dwelling,” upholding a decision by the state’s Land Use Board of Appeals.

Houses that are used by “groups of strangers who occupy a building in a transitory way” exceed the ordinary use of a dwelling, and thus cannot be allowed outright in farm and forest zones, the appellate court said.

“We are not persuaded by the county’s contention that the nature of the use of a dwelling remains as a residential one, and as originally approved or established in the resource zone, when it is used as a short-term rental,” the ruling said.

Properties in “resource” zones are intended for farm and forest uses. Exceptions have to meet the “farm impacts test” and obtain conditional use permits, the ruling said. Under this test, non-farm uses cannot force significant changes to agricultural practices or significantly increase their cost.

These land use rules undermine the county’s argument that short-term rentals of dwellings aren’t subject to conditional use requirements, the ruling said.

It’s likely that farm and forest dwellings can still be used for short-term rentals as long as they’re permitted as home occupations, said Mary Kyle McCurdy, deputy director of 1,000 Friends of Oregon, a farmland preservation group that opposed the county’s regulations.

“That is still a potential opening,” she said, though the Court of Appeals did not expressly reach that conclusion.

Though 1,000 Friends of Oregon doesn’t agree with all the activities permitted as “home occupations,” the organization hasn’t objected to temporary lodging being permitted this way if it’s not detrimental to agriculture, McCurdy said.

Home occupation permits are already used by farmers to provide lodging, but the land use rules aren’t consistent across the state, said Jones, founder of the U.S. Farm Stay Association.

“The counties really do treat this differently,” she said.

Jones said she has no problem with “farm stays” being required to meet the farm impacts test, to have the farmer live on-site or even to provide an educational component.

Such rules can assure farm stays remain authentic and aren’t exploited by “investors coming in with frat parties,” she said.

Short-term rentals have proven controversial when absentee landowners rent out properties for gatherings and events that neighbors find disruptive.

While concerns have been raised about “hotels” on farmland, it should be recognized that farm stays help agricultural operations become more financially resilient, Jones said.

By offering farm stays, Jones is able to buttress her farm against downturns in the sheep market, she said.

Obtaining a conditional use permit in some counties is expensive, time-consuming and complicated, which has encouraged some farmers to operate “under the radar,” she said.

A survey by the U.S. Farm Stay Association found that 55% of farmers don’t obtain permits, which indicates there’s something wrong with the system, Jones said.

Regulators or lawmakers could improve the situation by creating streamlined statewide criteria for farm stays and agritourism, she said.

“It’s kind of a hot potato and nobody wants to settle it once and for all,” Jones said. “There hasn’t been anyone raising their hand saying, Let’s take this on.”