Portland’s city’s staff has proposed strict regulations on short-term rentals in Portland such as those offered through the Airbnb online platform.
Under the proposed rules, property owners could only offer short-term rentals in their primary residence. Other rules include a six-guest limit, annual registration with the city and safety code requirements.
Advocates say the regulations could ease the city’s housing crisis by putting short-term rental properties that cater to tourists and visitors back on the market for year-round tenants. But Airbnb operators and others say the number of short-term rental units in the city is tiny and that curtailing it will hurt hosts and guests without relieving the housing crunch.
Most short-term rentals now violate Portland’s zoning rules, but enforcement has been spotty. The city had issued violations to a handful of property owners for having a short-term rental in a residential zone. In August, city officials said they would not enforce zoning violations until new rules were enacted.
“This is just a draft to get the conversation started,” said city housing planner Tyler Norod. “We are looking forward to a robust debate on this issue.”
Short-term rentals have skyrocketed in popularity in recent years thanks to online platforms such as Airbnb, HomeAway and VRBO that connect hosts and guests. Listings range from a shared room in someone’s apartment to large homes that can accommodate groups of 10 people or more.
The nightly or weekly rentals can bring property owners far more revenue than traditional residential rentals, and they provide visitors an alternative to hotels. However, the short-term rentals also have raised complaints about loud guests in residential areas and concerns that the practice erodes neighborhood character.
Mayor Ethan Strimling said Tuesday that he has received dozens of emails from supporters of short-term rentals and from other residents who want to see the city do something about the problem. Although he has some issues with the city’s proposed regulatory framework, Strimling said he is in favor of anything that brings more year-round apartments online.
“I think we have to push back. At the moment, this is adding to the housing crisis in a way we can’t sustain,” Strimling said.
Many of the emails received by Strimling appear to have originated from Airbnb. In a post on its Facebook page Monday, Airbnb Action, a wing of the company, urged supporters to contact Strimling, city administrators and the City Council through an online submission form.
City Councilor Spencer Thibodeau, who is on the housing committee, said the rentals are an important part of the city’s economy and that limiting them to a primary residence goes too far.
“We have to be careful here. We have to be cautious and I don’t want to go overboard,” Thibodeau said.
Under the proposed rules, all short-term rental properties would have to be owned by the host and used as their primary dwelling. Properties owned by a corporate entity, such as an LLC, would not qualify. That would eliminate the practice of some landlords who have converted entire multifamily homes into short-term rentals.
The rules would allow hosts to only rent to a maximum of six people – three bedrooms with two people each – and would not allow renting of non-bedroom space such as a living room or basement. Short-term rental owners would have to register, display a registration number and allow inspections. The owners would be required to sign affidavits that the registered unit is their primary residence and that the rental’s safety systems are up to code.
The fine for renting without a registration would be $500 for the first offense and $10,000 for the second. Three violations in a year would mean a 12-month registration loss, and operating a short-term rental with a revoked registration would incur an automatic $10,000 fine.
The proposed rules would not apply to Portland’s islands because of the long history of short-term rentals there, Norod said Tuesday.
If approved, Portland would follow the lead of cities such as Boulder, Colorado, and Berkeley and Los Angeles in California that restrict short-term rentals to the primary residence of the host. Many of the cities that Norod examined also are dealing with housing shortages, he said.
The city wants to dissuade people from buying properties to operate commercial short-term rentals, which can rent for five times the price of an average long-term unit, Norod said. If a host rented a two-bedroom apartment for the entire month, he or she would bring in $4,177, compared with the fair-market rate of $1,109 a month, the city said.
Based on information from the tracking website Airdna, the city estimates there are about 440 Airbnb units in Portland, and that roughly 150 of those are being rented commercially. If those units were put on the market as apartments, it could create a significant dent in the city’s low vacancy rate, which was about 3 percent in 2015, the city said.
Other Maine cities and towns, including Rockland, Cape Elizabeth and Bar Harbor, have created regulations for short-term rentals, and additional communities are considering new rules. In some places, the hotel and inn industry has put pressure on towns to crack down on short-term rentals that don’t have to follow the same safety and insurance rules as traditional lodgings. Hotel owners have not been involved in the city’s draft regulations, Norod said.
Ken Thomas, who operates an Airbnb in a building on Danforth Street, said the proposed rules are Draconian. It would hurt property owners who rely on short-term rent to make ends meet, and guests who stay at cheaper rentals and spend more in the city’s restaurants and shops. Thomas also doubts curbing short-term rentals will create more full-time housing.
“The best-case scenario, if they totally banned Airbnb, is a few dozen units on the market,” he said. “You are really going to achieve nothing by doing this but hurt people.”