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Olympia, WA

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STR Regulations for Olympia, Washington

Overview: Are short‑term rentals allowed in Olympia, WA?

  • Short‑term rentals (STRs) are explicitly allowed in Olympia, Washington, within residential and commercial zones under Olympia Municipal Code (OMC). Olympia defines an STR as any lodging accommodation (excluding hotels, motels, and bed and breakfasts) offered for fewer than 30 nights.
  • Two operating types exist: homestays (host‑present, room rentals) and vacation rentals (entire dwelling, no host on‑site).
  • Vacation rentals require a city STR permit and a 24/7 local contact; homestays do not require a permit but do require a business license.
  • STRs are permitted in Accessory Dwelling Units (ADUs), single‑family, duplex, triplex, fourplex, townhouse, and multifamily dwellings, provided all applicable regulations are met.
  • STRs are prohibited in Auto Services (AS) and Industrial (I) zones.
  • Occupancy and parking restrictions apply. Legacy provisions protect certain pre‑existing STRs from additional parking requirements and from the two‑unit cap if they remain in continuous operation.

Source: OMC Chapter 18.04 (Residential Districts) and Olympia STR regulations summary. [Link to residential districts code] [Link to STR summary]

What do Airbnb hosts actually earn in Olympia?

Olympia hosts earn a median $33,193/year with $174 ADR and 66% occupancy.

Top performers pull in $46,969+ per year.

See the full Olympia market breakdown

How to start a short‑term rental business in Olympia, WA

Homestay (host‑present, rooms within primary residence)

  1. Ensure you occupy the property as your permanent residence whenever guests are present.
  2. Obtain a City of Olympia business license and Washington State business license.
  3. Secure primary liability insurance; Olympia guidance calls for proof of coverage (commonly referenced by practitioners as $1M).
  4. Comply with homestay standards (e.g., off‑street parking if renting more than two bedrooms; posted guest materials; occupancy limits).
  5. Collect and remit all applicable state and local lodging taxes and Business & Occupation (B&O) taxes.

Vacation Rental (entire dwelling; no host on‑site)

  1. Obtain City and State business licenses.
  2. Identify and document your designated local contact person who lives within Thurston County or within 15 miles of the property and is available 24/7 for complaints.
  3. Secure primary liability insurance; maintain proof for inspections/renewal.
  4. Review the STR checklist and regulations summary; ensure any construction/renovation has all necessary building permits.
  5. Submit your STR permit application through the city’s online permit portal. The permit must be renewed every two years.
  6. Confirm zoning compliance; obtain any required construction permits before applying.
  7. Collect and remit all applicable taxes (lodging taxes and B&O).
  8. Post required guest information (Good Neighbor Guidelines, emergency contacts, floor/evacuation plan, license/permit numbers).

Source: Olympia STR page and regulations summary. [Link to STR page] [Link to STR checklist] [Link to permit portal]

Required documents, permits, licenses, and guidelines

  • City of Olympia business license (required for both homestays and vacation rentals).
  • Washington State business license (required for both types).
  • Proof of primary liability insurance (required for both types).
  • For vacation rentals only:
    • City STR permit (biennial renewal).
    • 24/7 local contact information (must reside within Thurston County or within 15 miles of the property).
  • Required postings for guests (both types):
    • Good Neighbor Guidelines.
    • Emergency contacts.
    • Floor plan and evacuation routes.
    • Copy of license and permit number(s).
  • Tax registrations:
    • Washington State Department of Revenue lodging tax registration and filing.
    • City of Olympia B&O tax compliance (city finance contact as needed).
  • Construction and fire/safety:
    • Any construction improvements must have appropriate building permits.
    • Compliance with building code, fire code, sanitation, noise, and nuisance standards.
  • Legacy unit protections (pre‑existing STRs operating as of September 27, 2021):
    • Exempt from additional parking requirements if continuously operated.
    • May continue operating more than two STRs provided all other applicable requirements are met and operation remains continuous.

Source: Olympia STR regulations summary and permit requirements. [Link to STR page] [Link to STR summary]

Specific regulations for short‑term rentals in Olympia, Thurston County, and Washington State

City of Olympia (local ordinance)

  • Types:
    • Homestay: Host‑present room rental within occupied dwelling; permitted as home‑based business; no city permit required.
    • Vacation rental: Entire dwelling; no host on‑site; city permit required (biennial renewal).
  • Zoning:
    • Permitted wherever residential and commercial uses are permitted; prohibited in Auto Services (AS) and Industrial (I) zones.
  • Occupancy:
    • Maximum of 10 adults or 2 adults per bedroom (whichever is less). Children under 12 may share a bedroom with up to two adults.
  • Parking:
    • Homestays: One additional off‑street parking space required when renting more than two bedrooms in one dwelling unit.
    • Vacation rentals: One additional off‑street parking space required if renting two units on a parcel where one unit is a single‑family residence; legacy units exempt from additional parking if continuously operated.
  • Unit limits:
    • Maximum two vacation rental units per property owner; no limit on homestays.
    • On a parcel containing a single‑family home, maximum of two vacation rentals per parcel.
    • On larger parcels or in multifamily settings, one vacation rental unit or 3% of non‑income‑restricted dwelling units (whichever is greater) may be permitted.
  • 24/7 local contact (vacation rentals):
    • Must live within Thurston County or within 15 miles of the STR and be available to respond to complaints at all hours.
  • Good Neighbor and guest materials:
    • Required to be posted; must include emergency contacts, floor plan, evacuation plan, and license/permit number.
  • Compliance and enforcement:
    • STRs must comply with health, safety, and nuisance standards (building code, fire code, sanitation, noise, odor). Violations can result in civil penalties, suspension, or revocation of license/permit.
  • Permit renewal:
    • Biennial (every two years); renew through the same permit portal.

Source: Olympia STR regulations summary and zoning tables. [Link to STR summary] [Link to OMC residential code]

Thurston County

  • If the STR lies outside Olympia city limits but within Thurston County, county zoning and any separate county STR rules apply. Olympia’s ordinance governs only properties within the city. For county‑specific STR standards, contact Thurston County Planning & Development; a county STR contacts list is available via the city’s STR contacts PDF.

Washington State

  • Hosts must register with the Washington State Department of Revenue for lodging taxes (often called hotel/motel taxes) and file returns remitting those taxes.
  • Even if a platform (Airbnb, VRBO) collects lodging taxes on behalf of hosts, Washington hosts must still register and file lodging tax returns with the Department of Revenue.
  • If the platform does not collect lodging taxes, the host is responsible for collecting, remitting, and filing all applicable lodging taxes.
  • B&O tax applies to gross receipts as administered by the Department of Revenue.

Source: Avalara MyLodgeTax guidance on Washington lodging tax registration and filing. [Link to Avalara lodging tax page]

Contact information (local authority in charge of STRs)

  • The Permit Center (City of Olympia)
    • Phone: 360.753.8314
    • Email: cpdinfo@ci.olympia.wa.us
    • Physical: Olympia City Hall, 601 4th Ave E, Olympia, WA 98507
    • Online permits and renewals: use the city’s Online Permit Portal (see Links).
    • Violations/reporting: use the city’s Online Service Requests portal (see Links).

Source: Olympia STR page and city contact details. [Link to STR page]

Links to source pages

Notes and best practices

  • Confirm with neighbors and document their concerns; this often reduces friction and helps you anticipate operational adjustments (parking, noise, guest communications).
  • Maintain organized records (permits, insurance, tax filings, guest materials) and track renewal dates to avoid lapses.
  • If you hold multiple properties, monitor parcel‑level and owner‑level caps closely; review the STR Contacts PDF for how legacy provisions may apply to pre‑existing units.

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Olympia

Market Saturation Score

036912
Moderate Saturation
6/ 12
months with declining YoY revenue
5–7 declining months: moderate saturation risk - market may be nearing capacity.
View Full Olympia Market Analysis

Photos of Olympia

Overview of Olympia

Olympia, the capital of Washington state, sits in Thurston County at the southern tip of Puget Sound, where the Deschutes River empties into Budd Inlet. With a city population of roughly 55,000, it carries a laid-back, Pacific Northwest feel that blends government activity with a working waterfront, a notable craft-beer and arts scene, and easy access to forests, mountains, and the coast. The city is best known as the seat of state government and as a launching point for trips to both the Olympic Peninsula and the snow-capped flanks of Mount Rainier. It lies about 60 miles south of Seattle along Interstate 5, roughly an hour's drive, making it close enough to the state's largest metro for spillover visitors but a far calmer home base.

The Washington State Capitol Campus anchors the city's identity. The Legislative Building, with its distinctive sandstone dome often compared to the U.S. Capitol, sits on a hill above Capitol Lake and is open for free guided tours year-round. The surrounding campus includes the Governor's Mansion, formal gardens, monuments, and veterans' memorials, and the building is listed on the National Register of Historic Places. Washington State Capitol

Just downhill from the campus, Percival Landing is a mile-long waterfront park and boardwalk along Budd Inlet, popular for walking, public art, and watching harbor seals and great blue herons from the docks. A short stroll away, the Olympia Farmers Market draws weekend crowds with local produce, shellfish, flowers, and crafts, capturing the region's farm-to-table character. Together, the waterfront and downtown core offer a walkable, cafe-lined setting that appeals to short-term guests seeking a quieter alternative to Seattle.

Outdoor recreation is a major draw. Mount Rainier National Park is roughly 75 miles to the east, a drive of about two hours via I-5 and SR-7 to the Nisqually and Paradise entrances, where wildflower meadows, glaciers, and old-growth forest draw summer hikers and winter snowshoers. To the northwest, Olympic National Park is reachable in roughly two to three hours via the Hood Canal Bridge, opening up the Hoh Rain Forest, the alpine vistas of Hurricane Ridge, and the rugged Pacific coastline. Closer to town, Tolmie State Park and Millersylvania State Park, both within about a 20-minute drive, offer short trails, picnic areas, and lake swimming that reinforce Olympia's reputation as a four-season outdoor hub.

Olympia makes a compelling base for short-term rentals because it pairs small-city walkability with unusually diverse day-trip options. Guests can spend a morning touring the capitol and walking the waterfront, then choose between a glacier-clad volcano, a temperate rainforest, or a wild stretch of Pacific coast by afternoon, all before returning to a downtown of breweries, bookstores, and independent restaurants. That combination of accessible urban amenities and front-door access to some of the Pacific Northwest's most iconic landscapes gives the market a year-round appeal that few similarly sized cities can match.

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