Short-term rentals (STRs), like Airbnb and VRBO properties, have become increasingly popular in Dundee thanks to the area’s wine tourism and proximity to Newberg. However, Dundee has implemented specific regulations and limits that every investor or homeowner needs to understand before getting started.
🏡 Are Short-Term Rentals Allowed in Dundee?
Yes—but they are regulated and limited.
Short-term rentals are allowed in:
- Detached single-family homes
- Manufactured homes on individual lots
- Residential and agricultural zones
They are not allowed in accessory dwelling units (ADUs), and you cannot rent the main home as an STR while living in an ADU on the same property. (Code Publishing)
📊 Citywide Limits on STRs
Dundee has a hard cap on the number of short-term rentals:
- STRs cannot exceed 5% of the total detached single-family homes in the city (Short Term Rental Permits)
- Once that cap is reached, no new permits are issued until space opens up
There is also a spacing requirement:
- No STR can be within 500 feet of another STR (Code Publishing)
👉 Translation:
Even if a property qualifies, it may not be eligible if another STR is nearby or the city has hit its cap.
📝 Permitting Requirements
To operate legally, you must apply for a Type II Short-Term Rental Permit through the City of Dundee.
Key requirements include:
- City application + review process (with potential public notice/appeal) (dundeecity.org)
- Business license registration
- Transient lodging tax registration (currently 9%) (Assurance Team Real Estate)
💰 Cost:
- Approx. $400 application fee (Assurance Team Real Estate)
🚨 Operational Rules & Restrictions
Dundee also regulates how STRs operate:
Occupancy Limits
- 2 people per bedroom + 2 additional guests
- Max of 10 occupants total (Short Term Rental Permits)
Parking
- Minimum 2 off-street parking spaces required (Assurance Team Real Estate)
Permit Restrictions
- Permit is not transferable
- If the property sells, the STR permit is void and must be reapplied for (Short Term Rental Permits)
Ongoing Requirements
- Maintain guest records
- Follow noise ordinances
- Provide adequate trash service
- Comply with general city nuisance laws (Short Term Rental Permits)
🧠 What This Means for Buyers & Investors
Dundee is a moderately restrictive STR market:
- Limited inventory due to the 5% cap
- Location matters (500 ft rule)
- Permits don’t transfer (big deal for resale value)
👉 This creates scarcity, which can be a good thing—but also means you need to be strategic when buying.
👋 A Quick Note From Me
As a local realtor, I’ve personally managed a short-term rental, so I understand both the rules and the real-world side of operating one—from setup to guest experience to profitability.
If you’re thinking about:
- Buying a short-term rental
- Converting a property
- Or just exploring if a home qualifies
I’d be happy to help you navigate the process and find the right opportunity in Dundee or Newberg.
📍 Let’s Connect
Short-term rentals can be a great investment—but only if you understand the rules going in.
If you have questions or want help finding a property that works, reach out anytime.
John Knows Newberg.
