Short-Term Rental Rules in Clackamas County

The short answer: Short-term rental rules in Clackamas County are set city by city, and owner occupancy is the dividing line. Lake Oswego and West Linn require the owner to live on the property, which rules out a purely investment nightly rental. Oregon City, Wilsonville, and Milwaukie allow one only through a conditional use permit. Unincorporated county property needs free registration.

Short-Term Rental Rules in Clackamas County Turn on Owner Occupancy

A short-term rental, in most of these codes, means renting a dwelling for stays shorter than 30 days. That definition is fairly consistent across the county. What is not consistent is who the city will let do it.

Oregon cities have real authority here. State law generally protects an accessory dwelling unit from owner-occupancy requirements, but ORS 197A.425(2) carves out a vacation-occupancy exception, which is what lets a city re-impose an occupancy requirement the moment a unit becomes a nightly rental. So the local rule governs, and the local rule varies block to block once you cross a city line.

Sort your target property into one of three buckets before you do anything else. Either the city requires an owner or long-term resident on site, or it allows an off-site owner but only through a discretionary permit with a public hearing, or it simply asks you to register. Those three buckets carry completely different timelines, costs, and odds of approval.

One note on how to read this page. I am a mortgage broker, not a land-use attorney, and city codes change. Treat everything below as a starting map for planning, then confirm your specific address with that city's planning department before you rely on it.

Short-Term Rental Rules by City in Clackamas County

Here is the sort, based on each city's own published materials. The middle column is the one investors care about, because it answers whether a nightly rental works when nobody lives at the property.

The unincorporated county row is the friendliest one on the page. Registration is free, there is no inspection, and the program became permanent as of July 1, 2026. What comes with it is operational: a responsible party reachable 24 hours a day with a two-hour response to complaints, a cap of 15 occupants, one off-street space per sleeping area, weekly garbage during occupied weeks, and building and fire compliance.

If you are looking at Damascus or anywhere else out toward the eastern edge of the county, confirm which jurisdiction actually governs the address before you plan around the county rules. Boundaries out there are not intuitive.

Short-Term Rental Rules Inside Portland City Limits Are Their Own System

Several of the neighborhoods I lend in sit inside the City of Portland even though people think of them as part of the same metro rental market. Portland runs an accessory short-term rental program under PCC 33.207, and it is stricter than anything in Clackamas County.

The core requirement is occupancy. A long-term resident has to occupy the dwelling as a primary residence at least 270 days per calendar year, with absences of up to 95 days allowed. From there the permit splits in two. A Type A permit covers renting up to two bedrooms to as many as five overnight guests. Renting three to five bedrooms is a Type B conditional use, which means planning review rather than a counter permit.

Permits run two years, and both the original application and the renewal require written notice to the neighborhood association and to adjacent property owners. You also register with the Portland Revenue Division and remit transient lodging taxes.

The sentence that matters most to an investor is this one: renting an entire dwelling that nobody occupies as a primary residence is prohibited in Portland. An accessory dwelling unit can be the short-term rental if the resident lives in the main house, or the reverse, but the fully unoccupied nightly rental is not a permitted configuration. My separate guide to Portland landlord rules versus Clackamas County walks the rest of the Portland-only obligations, which are substantial and also stop at the city line.

Why Short-Term Rental Rules in Clackamas County Collide With a DSCR Loan

Here is the part almost nobody connects, and it is the reason I wrote this page rather than a generic nightly-rental explainer.

A DSCR loan, short for debt service coverage ratio, qualifies a property on its rental income instead of your personal income. It is a business-purpose loan, and it is non-owner-occupied by definition. You cannot live in the property. That is not a preference or a guideline, it is what the product is. My guide to DSCR loans in Clackamas County covers the mechanics, and how the ratio itself is calculated is worth reading alongside it.

Now put that next to the table above. In Lake Oswego and West Linn, the city requires the owner to live on the property. A DSCR loan requires that you do not. Those two requirements cannot both be satisfied on the same property, so the combination of a DSCR purchase and a nightly rental is foreclosed in those two cities, no matter how good the numbers look on a spreadsheet.

I want to be direct about the wrong way out of that, because I have heard it floated. Telling a lender you will occupy a property you intend to rent is occupancy misrepresentation, and it is loan fraud. It is not a gray area and it is not a paperwork technicality. If the city requires occupancy and you do not intend to live there, the honest conclusion is that the plan does not work at that address.

In the cities that allow an off-site owner through a conditional use permit, the collision is a timing problem rather than a wall. A conditional use permit is discretionary, it involves a hearing, and it can be denied. Underwriting a purchase around nightly revenue that depends on a permit you do not have yet is a real risk, and lenders generally qualify a DSCR file on long-term market rent from the lease or the appraiser's rent schedule rather than on projected nightly income anyway. Terms and eligibility depend on the program and the property, and anything specific is subject to credit approval and a full loan estimate.

My practical advice is to underwrite the deal so it works as a long-term rental, then treat the nightly permit as upside. That way the financing stands on its own and the city's answer does not decide whether you can carry the property.

The ADU Fee Waiver and the Short-Term Rental Exit Cancel Each Other Out

One more collision, and this one catches people who are building rather than buying.

System development charges, the one-time fees a city charges to connect new construction to water, sewer, streets, and parks, are a meaningful line item on an accessory dwelling unit. Both Portland and Lake Oswego waive them entirely for a qualifying ADU. That is a genuinely large savings.

Each of those waivers is conditioned on a recorded covenant, running ten years, that bars using the unit as a short-term rental. Portland's version claws back at 150% of then-current rates if the covenant is violated. Oregon City, by contrast, grants no ADU waiver at all, so the fees are paid up front and no covenant attaches.

So you are choosing, not stacking. Take the waiver and the nightly rental exit is closed for a decade. Keep the nightly option open and you pay the charges. Neither is the wrong call, but deciding it after the covenant is recorded is expensive. I have not verified the SDC picture for the county's other cities, so do not assume a waiver exists anywhere I have not named.

What Short-Term Rental Rules in Clackamas County Do Not Tell You Yet

A few gaps are worth naming plainly, because a confident-sounding answer on any of them would be worse than none.

• Whether taxes stack. The county levies a transient lodging tax, and Lake Oswego, West Linn, Oregon City, and Canby each levy their own 6%. Whether a rental inside one of those cities pays one tax or both is not something I can state, so route it to that city's finance office and get it in writing.
• Happy Valley's numbers. The short-term rental chapter exists and the license is annual, but I have not been able to read the chapter text directly, so I am not printing a fee or an occupancy figure here.
• Canby's land-use side. The room tax is confirmed. The permit question is not, and Canby's home occupation provisions may capture nightly rentals. Not finding a rule is not the same as there being no rule.
• Molalla, in both directions. I have no verified reading of Molalla's code, which means I will not tell you the city allows nightly rentals and I will not tell you it prohibits them.

Every one of those gaps closes with a phone call to the right city department, which is a good use of an afternoon when a purchase is on the line. And because these are land-use and tax questions rather than lending questions, run the answers past your own attorney and CPA before you commit capital to them.

Frequently Asked Questions About Short-Term Rental Rules in Clackamas County

Can I buy a short-term rental in Clackamas County with a DSCR loan?

Which Clackamas County cities require the owner to live on the property?

Do I need to register a short-term rental in unincorporated Clackamas County?

Can I rent out a whole house nightly inside Portland city limits?

Does an ADU fee waiver affect whether I can rent the unit nightly?

How should I underwrite a Clackamas County property if the nightly permit is uncertain?