Hood River short-term rental ordinance upheld by federal court

By MAXINE BERNSTEIN/The Oregonian/OregonLive

A Hood River ordinance governing short-term rentals is constitutional, a federal appellate court ruled Monday.

A three-judge panel of the 9th U.S. Circuit Court of Appeals rejected the arguments from out-of-state owners of Hood River vacation homes, who argued that the city’s ordinance discriminated against them and favored local homeowners.

The city’s ordinance, amended in July 2024, requires a home intended for short-term rentals to be occupied as the primary residence of the owner or a local tenant under a lease for 12 months or longer. Once that requirement is met, the owner or long-term local renter can then lease the home to short-term tenants.

Out-of-state owners of Hood River homes intended for short-term rental use don’t need to be residents themselves but can satisfy the residential-use requirement through a live-in proxy, according to the city.

Hood River’s ordinance applies equally to the out-of-state homeowners and those who live in Hood River but at a property separate from their rental residence, the appellate court ruled in a five-page opinion.

“While non-resident property owners cannot personally serve as the primary resident,” under the ordinance, “that is because they are not similarly situated to the [Hood River] residents who can,” the opinion said. 

The panel also found that the city’s ordinance does not impose a “substantial” or “significant” burden on interstate commerce.

The loss of “a preferred, more profitable method of operating” in a market is not a substantial burden, the court found.

The panel issued its ruling less than two weeks after hearing arguments on the appeal.

The 10 plaintiffs live out of state and all bought second homes in Hood River. They planned to spend substantial time there but also rent them to family and others, their suit said.

The plaintiffs’ lawyer Christopher Michel had argued that the city’s ordinance makes it far more complex and burdensome for out-of-state property owners to rent Hood River homes that are otherwise identical to those owned and rented out by local residents.

Matthew Malmsheimer, who represented Hood River, defended the city’s law and had urged the 9th Circuit to let U.S. District Judge Adrienne Nelson’s ruling stand.

Malmsheimer and Dustin Nilson, Hood River’s planning director, have argued in court papers that the regulations address the lack of affordable housing in Hood River and the problem of homes sitting vacant. 

Nelson ruled last year that Hood River’s ordinances do not prohibit out-of-state property owners from participating in the vacation home rental market. She also noted that the purpose of the city’s rules is to “ensure sufficient housing and maintain the quality of life of the community.”

Circuit Judges Susan Graber and Jennifer Sung and Senior Circuit Judge Richard R. Clifton made up the three-judge panel.

This story was originally published on July 20, 2026 by The Oregonian/OregonLive.