Property owners who want to rent to tourists for short stays will have to have land-use approval, a business license and a fire inspection, plus be registered to pay the city's 9 percent hotel tax.
The Ashland City Council approved the new laws Tuesday night.
In Ashland, vacation rentals are legal in business and multifamily zones under certain conditions, but not in single-family zones.
Councilors kept the ban on vacation rentals in single-family zones intact.
Councilors plan to examine an Ashland law that says vacation rentals in multifamily zones must be within 200 feet of a major street.
About 600 more housing units could be available as vacation rentals if the council ended the requirement, but the change could cut into the supply of houses available to regular, long-term renters who live in Ashland.
The Ashland Lodging Association, which represents nearly 50 hotels, motels, bed-and-breakfast inns and legal vacation rentals, supported the council's decision to require land-use approval, business licenses, fire inspections and hotel taxes for vacation rentals.
"The City Council has come to the right decision for the city of Ashland," said Ashland Lodging Association President Abi Maghamfar.
He said the association would educate its members about the new requirements.
The Rogue Valley Association of Realtors expressed concern about the requirements, intruding on the property rights of homeowners.
People looking to buy property in Ashland sometimes inquire about the income-producing potential of houses.
Property owners who rent to tourists often make twice as much money as those who rent to long-term residents.
The income from tourists can help property owners make their mortgage payments, maintain their properties, and meet living expenses, according to supporters of vacation rentals.
Also Tuesday night, the council adopted an ordinance that requires people to obtain business licenses if they rent out two or more dwellings to regular renters who stay more than 30 days.
Previously, people had to have business licenses only if they rented out six or more properties for 31 days or more.
Staff reporter Vickie Aldous can be reached at 541-479-8199 or firstname.lastname@example.org.