A resident of Portland’s West End has appealed a city order demanding that he stop renting out part of his home through Airbnb, a popular website for short-term rentals.

The case will be heard by the Zoning Board of Appeals next week and a decision could have repercussions for hundreds of property owners who rent out rooms or apartments on a daily or weekly basis.

While the Portland City Council has been considering whether to regulate the rapid and unregulated growth of Airbnb rentals, the city staff has quietly issued a handful of violation notices to Airbnb operators since last fall.

Airbnb and other services allow property owners to rent rooms or entire homes to tourists and visitors without the regulations that apply to hotels or traditional bed-and-breakfasts.

There are about 425 Airbnb rentals in Portland, according to Airdna, a website that collects data on the service.

The growth of short-term rentals has alarmed traditional hotels and inns because the peer-to-peer rentals don’t have to comply with the same state or local regulations.

Others have complained that the lure of higher profits from short-term rentals – as much as $200 or more a night – is taking apartments off the market at the same time Portland is dealing with an acute shortage of year-round rental housing.

Portland officials say the practice violates zoning rules in most of the city’s residential neighborhoods, and in other neighborhoods is illegal without proper permitting.

Enforcement, however, has been restrained and driven mostly by complaints.

Portland has a limited staff to enforce zoning rules, so it comes down on the most egregious cases, said City Hall spokeswoman Jessica Grondin. “It’s kind of like speeding on the highway. You know it is illegal, you do it anyway, and you get caught,” she said.

But unlike signs posted on the highway, it is far from clear whether Portland residents know that short-term rentals violate city rules.

“I would guess that most people who are renting properties, a room or an apartment for short-term rental haven’t even considered the fact that certain zones would allow it and certain zones would not,” said David Brenerman, vice chairman of the City Council’s Housing Committee, which is expected to develop regulations for short-term rentals.

NO FORMAL COMPLAINT

The most recent violation was filed against 481 LLC, the company that owns 481 Danforth St. Kenneth Thomas lives in the home and rents the third floor, two-bedroom apartment on Airbnb.

In a letter in May, zoning administrator Ann Machado said her office had received complaints that the home was being rented to transient guests, which is not allowed in the city’s residential zones.

The owners were ordered to immediately cease renting the building.

Thomas appealed the order on the grounds that it is his primary residence and that renting it out is a secondary use. It also turned out that the city had not actually received complaints about the rental unit, but instead noticed the house was on the market and described to potential buyers as an overnight rental opportunity.

The building has since been delisted.

The city’s action “amounts to selective enforcement and is therefore arbitrary and capricious,” according to Thomas’ appeal.

Paul Bulger, a lawyer representing Thomas, said the problem is that the city’s zoning code is outdated when it comes to dealing with short-term rentals.

“What you have is a definition that hearkens back to an old age and you are trying to apply it to an age of Uber and Airbnb,” Bulger said.

“It is not a good fit and they know it.”

A good scenario would be to hold off enforcement until the city comes up with new rules, Bulger said.

“Do we wait for the development of a rule or do we episodically and selectively enforce our law?”

According to city officials, however, unlicensed short-term rentals are illegal in the entire city, and they will enforce the rules if there are complaints.

Tyler Norod, the city’s housing planner, acknowledged that there was no formal complaint against 481 Danforth St., but a advertisement promoting short-term rentals was seen by department staff.

“If it was illegal and we are aware of it, I don’t see how we could ignore it,” Norod said.

The city has issued four violations to short-term rental owners since October.

Two properties in the West End, on Danforth Street and Stratton Place, and one on Longfellow Street were cited for violating zoning rules related to short-term rentals.

As a general rule, people are not allowed to rent an apartment for less than 30 days at a time.

Jeff Levine, the director of Portland’s Planning and Urban Development Department, said the city doesn’t have the resources to cite all of the short-term rentals, so it focuses on those that attract complaints for noise or disturbances.

The city only started getting a fair number of complaints in the last six months, Levine said. The increase is likely because of continued growth of peer-to-peer rentals and an increase in the number of people who are buying properties specifically to list them on Airbnb, he said.

City staff members are also monitoring real estate listings and working with real estate agents to make sure properties aren’t advertised for sale as potential Airbnb rentals in places where it would violate zoning, Levine added.

CHANGE-OF-OCCUPANCY PERMIT

“It’s actually a complicated policy issue because there are advantages and disadvantages to having them in the city,” Levine said.

Although the issue has been publicly debated, not all Airbnb operators know they are running an illegal establishment.

Lloyd Hall bought his Longfellow Street home last year expecting to rent a couple of rooms on Airbnb to help pay the mortgage.

Hall had his first guests in December and shortly thereafter the city informed him he was violating city codes. Such rentals could be allowed in his zone, but need to be properly permitted.

The news surprised Hall, who said he had researched the issue to make sure renting on Airbnb was OK.

“I have many friends who have done Airbnb; some still do,” Hall said. “None of them were aware of this either.”

He worked with the city for four months to get a change-of-occupancy permit to make his operation legal and is listing his apartment again. So far, business has been good, Hall said.

Communities in Maine and across the U.S. have struggled with how to regulate parts of the so-called sharing economy such as Airbnb and ride service Uber. In 2012, Cape Elizabeth passed rules regulating the practice and last year the Maine Legislature discussed statewide restrictions.

The City Council’s Housing Committee has discussed regulating short-term rentals and is expected to revisit the issue. But with other priorities like affordable housing and a runaway market for apartments, it’s unclear when it will get around to devising new regulations.

Until then, the city will keep enforcing the rules it has, Levine said.

 

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