Leavenworth pauses new B&B permits after housing incentive concerns

LEAVENWORTH — A six-month moratorium on the application and processing of Conditional Use Permits for Bed & Breakfast facilities (B&Bs) within Leavenworth city limits has been imposed after officials discovered an affordable housing incentive was being used to create more B&Bs.

The city’s incentive program offers preapproved accessory dwelling unit (ADU) building plans and reduced permitting costs to encourage construction of smaller, more affordable housing units. Earlier this year, the Housing Advisory Committee (HAC) warned that five preapproved ADU permits have been issued since the program’s initiation, three of which have received final occupancy. All three have since been converted into B&Bs through the conditional use process (CUP).

To date, the City of Leavenworth has spent about $73,000 to develop and maintain these plans. Residents benefiting from the program are estimated to save between $15,000 and $18,000 in plan development costs, in addition to reduced fees.

“Failure to address these concerns has the potential to continue subsidizing the commercial use of single family residential structures that were intended to be used as long term housing to address community housing needs,” said Senior Planner Celeste Barry during the council meeting on April 14.

The discovery also spurred further examination of how the city calculates housing stock, which is used to set the 4 percent cap on B&Bs.

“As it’s codified, it’s not really that accurate,” Community Development Director Maggie Boles told the council during the March 24 meeting.

According to Boles, the city uses Assessor State Code 11 to calculate stock. While the data is easy to extract, it can include vacant land and multifamily residential units, inaccurately inflating the number of housing units. Boles said the city has 1,108 housing units under this method, meaning a 4 percent cap would allow up to 44 B&Bs.

Boles suggested using “Selected Housing Characteristics” 2024 U.S. Census data and permits counts from the previous year. Under this method, the housing stock falls just under 900 units, allowing up to 35 B&Bs. The city currently has 31 B&Bs that are either permitted or in the process.

While multiple solutions were proposed across several meeting discussions, city officials agreed that more time was needed to address both issues and identify long-term solutions.

Leavenworth City Council unanimously voted to place a six-moratorium during its April 14 meeting. No public comments were made during the hearing.

Taylor Caldwell: 509-433-7276 or taylor@ward.media