Policy Wonk: Airbnb spells housing trouble

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The so-called sharing economy has been with us for a long time: hotels, taxis, laundry centers, tool and equipment rentals, car rentals, and more.

For a price, buyers can obtain what they occasionally need. Providers are usually subject to reasonable regulations designed to insure the appropriate location of the provider, fairness, and user safety.

And the occasional use of a residence or a spare room, to provide shelter (for short, and sometimes longer, periods of time) to a friend, relative, or stranger, it has been with us since people started living in caves. These forms of sharing are not the problem. We need them; we’re more or less comfortable with them. They’re not going away.

Problems arise, however, when that which was done occasionally (provided by a few, for the benefit of a few) explodes in use with the aid of new communication tools. A brave new marketplace (hundreds, then thousands of providers,and a similar increase in users) all looking for economic advantage emerges almost overnight.

That’s where we are with Uber (the ride-sharing service) and with Airbnb (short-term housing). In Maine, the center of gravity of these phenomena are cities like Portland and Bangor.

But it’s not limited to urban settings; there are other places where lots of people want to be at certain times of the year; Sugarloaf, Bar Harbor, Camden, Ogunquit (and similar venues) would do well to monitor what’s happening.

The short- and long-term problems posed by the shared housing services are real. The providers of a room or a whole house are not licensed; their numbers are not limited; their premises are not inspected; the location of providers often does not comport with existing zoning laws. All of these regulatory measures need to be addressed.

Beyond these broad issues, who monitors and/or inspects whether the housing provided has modern fire-safety warning devices, safety doors, and sufficient exits? Whether fire extinguishers or sprinkler systems, parking, heating, and sanitary facilities are adequate and working? Who should pay for this monitoring? How? When?

These are not overblown potential risks. Six people died on Noyes Street in Portland two years ago because both the provider and the city failed to monitor the actual living conditions in leased premises.

In the longer run, the exploded desire of a relatively few residential property owners to capture the high profits of short-term rentals creates an over-supply of these units. This shrinks both the number of houses for sale and the number available for long-term rental. This drives up the purchase price of home ownership, and the price of rental housing for those who would live permanently in the city.

Portland is experiencing these realities in the extreme. At the same time hundreds of Airbnb units sit idle for large portions of the year, awaiting the next short-term rental opportunity.

In the aggregate there is an oversupply of housing units, but by conflating the short-term housing market with the long-term housing market, we have created profits for the relatively few providers of short-term housing, cost savings for visitors/renters of these units (they are cheaper than hotel costs), and steeply rising prices and costs for the larger number of people who live (or would live) in the city.

In sum, we have turned the housing market on its head. We have allowed the uncontrolled growth of Airbnb to create a shortage of permanent, affordable, owner-occupied and rental housing, which is the type of housing we need most.

The city is awakening to these realities, but we’re moving too slowly and too timidly.

Recent staff materials presented to the city’s Housing Committee provide a wealth of useful information, but a draft for regulating short-term rentals in Portland is a page and a quarter long, and none of its 18 points is more than a sentence long. There is no detail, few precise requirements, and no indication of how these requirements will be enforced.

More importantly, the draft seems to eliminate commercially owned housing from being used for short-term rentals, but allows such rentals in residential structures “owned by the host as their primary dwelling.” In my view, this will not get the job done.

The city needs to deal with all short-term rentals; short of prohibiting them altogether (as some cities have done), we should at least regulate the total number of such rental units in the city, and, through zoning, their location. We need more carefully delineated safety regulations protecting those who utilize such housing.

Finally, the city must recognize that housing policy is not designed to protect the windfall profits that short-term rentals create for a few property owners; nor is it the city’s duty to provide lower-cost accommodations for visitors to Portland.

Our housing policies should focus on existing and new permanent residents. These people are our present and our future, and they need to be able to buy or rent affordable housing.

Orlando Delogu of Portland is emeritus professor of law at the University of Maine School of Law and a longtime public policy consultant to federal, state, and local government agencies and officials. He can be reached at orlandodelogu@maine.rr.com.

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