PORTLAND — The City Council on Monday enacted short-term rental housing regulations that include new fees for hosts and occupancy caps on buildings.
By an 8-1 vote, with Councilor Justin Costa opposed, a package of rules and zoning limits was adopted that require registration with the city Housing Safety Office by all owners of rooms, apartments or houses rented for 30 days or fewer.
The action is a response to the proliferation of hospitality and vacation rental services like Airbnb and VRBO, which operate online marketplaces that match travelers with property owners who have rooms or homes to rent.
Critics say the services remove properties from the residential market, which drives up the cost of housing. Proponents say they allow property owners to maximize the return on their investments, while making the city more attractive to tourists and travelers who may otherwise not be interested in or able to afford commerical lodging.
“We need to understand this is a trial run; we figured out a way to regulate short-term rentals we hope will work,” Councilor David Brenerman said.
Costa said there was not enough information about the market to justify the rules requiring rental hosts to be registered by Jan. 1, 2018.
“We are going into an area where we are admitting we don’t have the firmest of data,” he said.
The new rules ban short-term rentals of single-family homes and condominiums on the city’s mainland that are not owner occupied. They also require owners to allow inspections and cap the annual number of short-term rentals in buildings not occupied by owners at 300.
The rules do not cap the number of short-term rentals in owner-occupied buildings, but limit the number of short-term rental units in those buildings to five per building.
The rules do not apply to short-term rentals on the Casco Bay islands, except for the requirements to register and pay annual fees that range from $100 to $2,000 per unit.
Those fees are double for short-term rental units in buildings not occupied by owners, and all fees are assessed separately for each unit.
The regulations allow no more than two guests per bedroom, with two more guests allowed. Individuals or entities may not register more than five units annually.
Councilor Brian Batson sought to increase the fees for units not occupied by owners to a scale ranging from $300 to $6,000 per unit, arguing that could be a deterrent to people buying up buildings and converting them to short-term rentals. His motion was defeated by a 5-4 vote, with Mayor Ethan Strimling and Councilors Spencer Thibodeau and Pious Ali supporting Batson.
Revenue from fees is expected to go to the Housing Safety Office to fund compliance costs and inspections, with any money left over then contributed to the city Housing Trust Fund.
City Housing Planner Tyler Norod said the revenue is estimated to be $70,000, and Batson’s amendment might have added $15,000.
Councilor Jill Duson, whose Housing Committee proposed the ordinance amendments, said a mandated review of the ordinance after six months will allow adoption of revisions that reflect market conditions.
The Housing Committee began focusing on short-term rentals in September 2016. The committee heard from supporters and opponents several times, but a public hearing on the regulations Monday lasted only 15 minutes.
Bradley Street resident Ellen Sidar said short-term rentals by homeowners need more regulation.
“Without regulating the number, you will send our neighborhoods into a death spiral,” she said.
Ralph Baldwin, who helped organize short-term rental hosts into Share Portland, generally supported the regulations, but not the immediate caps on the number of units.
“I urge us to register, gather data, gather money, determine how many people there are and what the cap should be,” he said.
Portland City Councilor Brian Batson seeks to increase fees for some short-term rentals during the March 27 council meeting. His motion was narrowly defeated, but supported by Councilor Spencer Thibodeau, right.