Hey Bellingham Investors,
Has anyone ran into the Bellingham Municipal Code 20.08.020.F that states a lawful situation for residence zoned as a single-family as "One or more persons related by blood, marriage, or adoption, or not more than 3 unrelated persons, living together within a single dwelling unit."? It looks like this is going to start being enforced this year.
I am looking at making my first real estate investment purchase this year. I was looking at a 5+ bedroom SFR near WWU and renting it out to students. However, I stumbled upon the municipal code above. Is there an exception to this code or will 5+ bedroom SFRs in Bellingham significantly lose their value when this is enforced?
Yeah I think this might be a bit of an issue down the line, but perhaps not for another year or more. As you know, thanks to the new inspection and registration requirements rental properties need to have both. However, when I spoke to the city last week about this I was told that the registration aspect isn't too problematic, and that they are way, way behind on their inspections.
But i see a potential for problems when you own a single family property that has 4, 5 or even more bedrooms rented to whomever you want. This whole thing is a money grab by the city and isn't unique to Bellingham, not that it makes it any better.
Back to what the city told me. they said that yes, there are these new regulations which will be enforced, but when and to what degree, and what the fines/penalties will be remain quite unclear.
While I think it best to adhere to the letter and spirit of the law, I can see how these new rules and regulations could hamper the works and efforts made by nonprofit and charitable organizations. To give you an example, about a year and a half ago I was looking at purchasing a 9 unit property in the Birchwood area. One of the units was a 4 bedroom single-family home. Within a single family home, there were 5 unrelated males living there. I was told shortly after bringing this to the attention of the broker that it was a clean and sober house for men. After meeting a few of the tenants, it became quite evident that this place was an enormous help to these people suffering from a horrific addiction. The place was extremely well kept, quiet and according to the documents provided to me by listing broker, no one was ever late with their rent payment.
After conducting more due diligence into the zoning there was nothing on file or on record differentiating this sort of property from others. It is my opinion that the new rules, regulations and subsequent inspections will find the property to be out of compliance. But will they turn a blind eye, given the charitable nature of the property? Who knows?
Given the affect this whole thing could have on the real estate market in Bellingham i've asked the city for a more specific explanation and circumstances which could be exceptions. but i am not holding my breath for a response.
The Whatcom County Association of Realtors is fortunate to have an excellent attorney as our Government Affairs director. I am currrently President of the Association and have had long discussions with him on this very topic. The 3 unrelated persons ordinance is an old one on the books that just has not been taken off. It was originally enacted long ago so that who lived in neighborhoods could be controlled. In fact, there was a request many years ago to an attorney for a suite to be filed against a gay couple with an additional resident. The attorney wisely declined to pursue it. Enforcement of this brings up huge constitutional issues. How does the government say who gets to live together?
That being said - this is a very touchy subject in the York and Sehome neighborhoods as home owners there don't like a groups of college students living next door. Students often have parties and the properties and home upkeep is less than a typical home owners. In my view, there is no way to constitutionally enforce this rule but there is no pressing issue for the city council to delete it from the books.
So for investment purposes - I see no legal reason that it cannot be rented out to 3 or more unrelated persons. If you see an opportunity for investment, go for it.
I think I'm going to stay away from this kind of property. Too much risk for my first investment. I just spoke with someone at the City of Bellingham about this. He said this will start being enforced more now that there will be property inspections.
I have attached a link for the City of Bellingham Rental Checklist. This is what the city will use for inspection. Note that the categories for the inspection are all structural! There is nothing in the checklist that addresses who is living in the house and what relationships they have. It would be an invasion of privacy to ask and discriminatory to make housing decisions based on those answers. This structure is the only thing that the city is inspecting. To enforce an outdated and unconstitutional ordinance would force half of the York and Sehome neighborhoods to vacate - not to mention the court costs and legal battles that would ensue.
I would be curious who you talked to at the city as I would welcome a conversation with them.
I'm not sure, I just called the Planning and Community Development department and got transferred to someone.
Wow -- Aron, this sounds completely outside of the jurisdiction of any government!!! If I lived in your area, I would lean towards Mary Kay's advice, rather than shy away from an over-reaching & unconstitutional local government!!!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing