SOUTH PORTLAND — The City Council on Tuesday took the first steps toward revised restrictions on short-term housing rentals, and selection of a proposal to redevelop the former public works property on O’Neil Street.

The council voted 5-2 for a first reading of a re-crafted short-term rental ordinance. A second reading and potential adoption are slated for June 19.

The previous, short-lived rental restrictions were adopted in February, then repealed in April, after opponents collected enough signatures to force the council to revisit the decision.

There are four key changes in the new ordinance, although it preserves the core of the original restrictions: non-hosted, short-term rentals would still be barred in residential sections of the city.

The amendments, if adopted, will allow two adults per room, with a cap of six people in an owner-occupied rental. Owners of apartment buildings with at least four units would be able to rent out two apartments as long as they live in one of the other units, and all short-term rentals would have to be licensed by the city.

The ordinance also requires the availability of at least four parking spaces to accommodate guests.

The council dropped language that would have prevented people from renting their homes out for a week or two while they are on vacation.

If adopted, people operating short-term rentals would have to be in compliance with the new city regulations by Jan. 1, 2019.

Deake Street resident Peter Stanton told the council he is pleased the ordinance separates the investor class from those renting rooms in their homes for supplemental income.

Airbnb’s New York-based public policy attorney, Andrew Kalloch, issued a letter to the council opposing the ordinance.

Kalloch said it threatens to “undermine the economic lifeline of home sharing for local hosts in South Portland and curtail the economic impact that short-term rentals have provided to small businesses across Maine for generations.”

According to data from Airbnb, in 2017, there were 170 hosts in South Portland who welcomed 11,400 guests, and 4,200 residents have used Airbnb in their own travels.

In looking at the demographics, nearly 70 percent of homeowners renting spaces are women who were an average age of 46. One in five hosts are older than 60, and the average host made $7,900 renting their spaces for about four days a month.

Councilor Eben Rose, who with Councilor Adrian Dowling voted against the new ordinance language, predicted this iteration will likely be challenged and repealed, too.

He said the city should have enforced existing ordinances that prohibit inns and businesses in residential areas, rather than going down a “rabbit hole” of licensing to combat the egregious behavior of some short-term rental operators.

“I have zero confidence this will be enforced,” Rose said.

O’Neil Street

Councilors voted 6-1 to accept a bid for $400,000 from Windward Development LLC of South Portland to develop the city-owned O’Neil Street property, with Rose voting against the measure.

Public works now based on Highland Avenue.

A redevelopment committee spent more than a year gathering input from the neighborhood about what the city would like to see as part of the redevelopment, including a community garden, green space and affordable housing on the 6-acre site.

The committee presented recommendations for the property to the City Council in January, and the a selection team comprised of four committee members, Councilor Kate Lewis, and city staff, chose one of the two project developers who responded to a request for proposals.

Mayor Linda Cohen said she was disappointed more developers did not apply for the project.

The proposed plan, which calls for several multi-unit townhouses and varying types of single-family residences, earned a score of 86 out of 100, Assistant City Manager Joshua Reny said. With a zoning change, there is the potential for 20-45 housing units, he said, and the permitting and approval process will likely last throughout 2018.

Windward Development will have to purchase the land within 14 days. The project cost is estimated at $1.6 million, not including the land. The property is assessed at $1.5 million, with a land value of $788,300.

The vote June 5 was to accept the bid, but not the details of the plan. Discussion during public comment suggested concerns about the height of proposed three-story and four-story townhouses, and the possible addition of a skate park.

Councilor Susan Henderson said she would like to see more information about affordable housing units, but said she has hope that will be addressed when a purchase price for the units is set.

Committee member Linden Thigpen said after the meeting she believed the plan is on track with that the committee wanted, but it is still in the early stages.

Rose said he is concerned about a “lack of consensus” about the proposal in the neighborhood, and said  there should be no rush to develop the land.

There will be an additional opportunity for public and council input, as well as the Planning Board process before a master plan is adopted.

Juliette Laaka can be reached at 781-3661 or at [email protected] Follow her on Twitter @JulietteLaaka. 

Windward Development’s rendering of the proposed O’Neil Street project in South Portland.