Portland’s City Council voted unanimously Monday night to amend the city code to ramp up short-term rental regulations.

The measure changes the city code to cap short-term rentals at 1.5% of the city’s rental stock. For years, the city has capped short-term units at 400 for the city. The 1.5% cap means that number will go down from 400 to about 290.

Existing operators will not lose their licenses, but until the number of operators meets the 1.5% cap, the city would stop approving short-term rental license requests.

Councilor Kate Sykes, who sponsored the measure, was quick to note that the number of allowed short-term rentals will rise as more housing is built in Portland.

“Hopefully, we’re going to build a lot more housing, and if we do, we’re going to have a lot more long-term rentals,” she said during council discussions.

The amendment also requires documentation proving owner occupancy of buildings operating short-term rentals. It also implements restrictions on Peaks Island for the first time, capping the number of non-owner-occupied short-term rentals at 40, which is close to the current number on the island.

The public comment period drew many short-term rental owners throughout the city who were concerned at the prospect of further regulation.

Betty Caden emphasized that the short-term rental she operates is not making her rich.

“The house I live in, my family has been in for 102 years. In 1985, we built an in-law apartment for my mom, and shortly after that, my husband and I converted it into a short-term rental,” Caden said. “This is a supplement to my retirement income. I never thought that I would be on a fixed income, but I am.”

Adam Stein, another short-term rental owner, spoke about the ways his business supports the local economy. He said he contracts with local cleaners, plumbers and electricians, and sends his guests to local restaurants.

“There is a ripple to this economy that really is floated by Airbnbs that I think is invisible to those that don’t have to maintain them and operate them and maintain them,” Stein said.

Mandy Miller, who rents out both long- and short-term units, said her short-term rentals allow her to help out Portland residents with better deals on rent.

“I have a long-term tenant on the first floor who is a vital part of the music scene and the culture of Portland. The only way that I can give him the insanely crazy deal that I give him on rent is because of the tourists in my non-owner-occupied building,” she said.

George Rheault, who does not own short-term rentals, spoke in favor of the proposed changes.

“I think that these are very sensible changes. I think that we should have accountability,” he said. “If it reduces the number of people doing this, it’s because it isn’t supposed to be a walk in the park and easy money.”

Councilor Roberto Rodriguez tried to amend the measure to cap short-term rentals at a rate of 2% of the total rental stock.

“Here we have local residents like you and I, common folks who are trying to take advantage of a very lucrative tourism industry that we have. … I don’t like that a few months ago we facilitated this business for hotels but are taking away the business from locals,” Rodriguez said.

His amendment was supported by Mayor Mark Dion but ultimately failed, and Sykes’ measure was passed as originally proposed.

AFFORDABLE DEVELOPMENT APPROVED

The council also approved funding for a new affordable housing development.

A proposal by the Portland Housing Authority for 70 East Oxford St. was brought before the council last month but did not pass after Sykes voted against the development.

This time, however, Sykes voted in favor, and funding for the development was ultimately approved.

The developers asked the city for a total $650,000 from the housing fund and $1.5 million in tax-increment financing over a 30-year period to help finance the project.

The project would demolish four existing buildings with 40 units on the lot between Cumberland Avenue, Oxford Street, Boyd Street and Mayo Street. One building on that lot was full of black mold this winter, which created hazardous living conditions for its occupants.

In their place, Portland Housing has proposed a six-story building with a total of 110 units. Of those new rentals, 55 would be mixed-income units, five would be market-rate units and 50 would be affordable rental units. There would be a mix of studio, one-bedroom, two-bedroom and three-bedroom apartments.

At the last council meeting, Sykes voted against the development because she said she didn’t like the financing approach Portland Housing had taken and wished they would use housing bonds instead – a process Sykes said is much more efficient for a housing authority.

Several people spoke during public comment urging the council to approve funding for the project ahead of an important MaineHousing deadline on Aug. 20 when new developments need to apply for state funding and cannot do so without municipal support.

Jay Waterman, who works for the Portland Housing Authority, urged the council to support the project. He said the units at 70 Oxford St. are in desperate need of renovation.

“(Those units) are in horrible shape, we have had to remove the residents from those units, so in fact the units we are putting in would be a vast improvement for the public housing residents,” he said.

This time, however, after appeals from the housing authority and other councilors, Sykes acquiesced and voted in favor of the project.

“I ran on a public housing platform; that is why I was elected. … I’m going to vote in favor of this tonight because I don’t want the Portland Housing Authority to have to be in a position to start this project from scratch, but it pains me,” Sykes said before the vote.