Federal Way's Short-Term Rentals: The Rules That Matter

Every city handles short-term rentals a little differently. In Federal Way, Washington, there are 8 distinct rules that residents and property owners should be aware of. Some are stricter than what neighboring cities enforce, and others are more relaxed. Here is what you need to know.

Parking Rules

Federal Way STRs must provide off-street parking under FWRC Title 19. On-street overflow should not create congestion and unpaved parking of guest vehicles is not permitted.

Key details: Off-Street Requirement: Two spaces typical. On-Street Parking: Standard residential rules. Unpaved Surfaces: Prohibited for parking. Code Reference: FWRC Title 19. RV/Boats: Storage limits apply.

Parking violations result in tickets that typically start around 40 dollars for routine infractions. Chronic STR parking issues can contribute to nuisance property designation and endorsement review.

Night Caps

Federal Way does not currently impose an annual night cap on short-term rentals. Unlike Seattle, there is no local limit on how many nights per year a property may be rented for stays under 30 days.

Key details: Annual Night Cap: None currently. State Preemption: No statewide cap. Seattle Comparison: Seattle has operational caps. HOA Rules: May impose private limits. Monitor: City Council ordinances.

No citywide night cap exists today, so there is no direct enforcement. However, other STR rules (business endorsement, insurance, taxes, noise, and parking) remain fully enforceable.

If you are coming from a city with tighter rules, you will find Federal Way gives residents more flexibility on night caps.

Occupancy Limits

Federal Way STRs follow building code occupancy standards, generally two persons per bedroom plus two additional. RCW 64.37 requires operators to post maximum occupancy inside the unit.

Key details: Typical Formula: Two per bedroom plus two. Post Occupancy: Required by RCW 64.37. Bedroom Minimum: 70 sq ft with egress. Code Basis: WA State Building Code. Fine Minimum: 250 dollars.

Occupancy overages can be cited as building and fire code violations, with fines typically starting at 250 dollars. Platform listings may be taken down if guests exceed posted limits.

Noise Rules

STR guests in Federal Way follow the citywide noise ordinance in FWRC Chapter 7.10. Quiet hours are typically 10 PM to 7 AM and operators must maintain a 24-hour local contact under RCW 64.37.

Key details: Quiet Hours: 10 PM to 7 AM. Night Limit: 55 dBA residential. Operator Contact: 24-hour required. City Code: FWRC Chapter 7.10. State Law: RCW 64.37.

Noise complaints attributed to STR guests can result in citations issued to the guest or the operator. Fines typically start at 250 dollars. Persistent violations can trigger nuisance property enforcement and business endorsement review.

Insurance Requirements

RCW 64.37.040 requires Federal Way STR operators to maintain at least 1 million dollars in liability insurance or rent only through a platform that provides equivalent coverage.

Key details: Minimum Coverage: 1 million dollars per occurrence. State Law: RCW 64.37.040. Platform Coverage: Airbnb or VRBO may satisfy. Homeowner Policy: Typically insufficient alone. Proof: Required on request.

Operating without required insurance violates RCW 64.37 and can result in fines, loss of Federal Way business endorsement, platform delisting, and personal liability for guest injuries not covered by a valid policy.

This is one of the stricter rules in Federal Way's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Registration Rules

Federal Way STR operators must register with WA DOR through the Business Licensing Service, obtain a Federal Way business endorsement, and register local contact info under RCW 64.37.

Key details: State License: WA DOR BLS required. City Endorsement: Federal Way required. Renewal: Annual. Local Contact: Required by RCW 64.37. Platform Display: License number often required.

Operating without required registrations can result in business license penalties, back taxes, and platform delisting. Fines typically start at 250 dollars plus any assessed taxes and interest.

Taxes & Fees

Federal Way STR operators collect Washington retail sales tax, King County lodging tax, and state and local lodging taxes. Combined rates typically run around 12 to 13 percent, remitted through WA DOR.

Key details: Combined Tax Rate: Approx 12 to 13 percent. State Sales Tax: 6.5 percent plus local. Lodging Tax: King County and state. Remittance: Washington DOR. Record Keeping: Five years.

Failure to collect or remit lodging taxes results in assessed taxes plus interest and penalties from WA DOR. Federal Way may also impose business registration penalties or revoke the city endorsement.

Permit Requirements

Federal Way STR operators must comply with RCW 64.37, which requires liability insurance, on-site safety info, and tax registration. A Federal Way business registration is also required.

Key details: State Law: RCW 64.37. Minimum Insurance: 1 million dollars. City Registration: Federal Way endorsement required. Tax Registration: WA DOR required. Rental Duration: Under 30 days.

Operating without a required license or insurance violates RCW 64.37 and Federal Way code. Fines can reach 500 dollars per violation and repeated failures can result in platform delisting and revocation of business endorsement.

This is one of the stricter rules in Federal Way's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

The Bottom Line

Federal Way is tougher than many cities when it comes to short-term rentals. Out of the 8 rules covered here, 2 are rated strict. If you are a homeowner, renter, or business owner in Federal Way, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.

All of the above reflects Federal Way's municipal code as of our last review. If you need specifics on fines, exemptions, or filing requirements, the detailed ordinance pages linked above have the full breakdown.