SOUTH PORTLAND — The City Council Tuesday placed tight restrictions on short-term housing rentals in residential parts of the city.
The 5-1 vote capped a process that divided neighbors and left some councilors feeling bullied.
The ordinance, which takes effect March 12, will ban non-owner-occupied rentals in all residential neighborhoods. Hosted stays, where the homeowner is present, in all areas of the city would still be possible, and non-homeowner-occupied rentals would be allowed only in commercial and mixed-use neighborhoods.
Short-term rentals are defined as any stay 30 days or less, and have been popularized and promoted by online vacation home rental sites like Airbnb, VRBO and HomeAway.
The council has debated and discussed the issued since last summer. According to Councilor Adrian Dowling, councilors listened to 30 hours of public testimony.
Dowling was the only dissenter Tuesday, and before casting his vote said he was disappointed by the process and said he would have preferred an ad-hoc committee be formed to investigate the issue.
Dowling also said councilors felt bullied by people on both sides of the issue, which Mayor Linda Cohen also acknowledged.
Cohen said the city’s laws are outdated, and must be amended to keep up with changing times. She added this was a learning experience for her, because she was unaware previously of such rentals.
She also noted South Portland is not the first city to regulate short-term rentals.
Short-term rentals will be required to register with the city by April 15, and could be subject to inspection by the Fire Department with a notice of 48 hours. Owners offering hosted stays would also have to present documentation to prove the rental property is their primary residence; failure to register could be punishable by fines.
A third-party, internet-based platform linked to a graphic information system will be used to track registrations and lengths of stays.
A cap on the number of renters has also been implemented, and for a hosted stay, a two-person limit per room was approved for residential areas, regardless of the number of rooms available. In commercial or mixed-use areas, the limit would is capped at two people per room for as many bedrooms are in the house.
At the previous workshop on the matter, two amendments were added to the ordinance draft – one allowing the owner-occupants of three- or four-unit apartment buildings to rent one unit as a short-term rental, and allowing homeowners who have contracts with renters confirmed before Feb. 6 to honor those reservations through Sept. 15, with certification by the city clerk.
The contracts must be sworn under oath, according to Corporation Council Sally Daggett.
Short-term rental property owner John Murphy said Tuesday a tourist economy exists in South Portland, adding a majority of those who rent out their homes are not lining their pockets, but supplementing their income.
He again asked the council to delay its decision and form an ad-hoc committee to review the issue, adding Cape Elizabeth took 18 months to craft its ordinance and Portland took three years.
“Why are you afraid to let citizens get involved? We have been refused a voice, and this deserves a committee,” Murphy said.
Proponents of the the restrictions, however, have argued that short-term rentals turn residential neighborhoods into business zones, and force up property values and rents.
Cohen said earlier this month the city will likely be sued over the restrictions on popular vacation-rental services like Airbnb and VRBO, citing a gofundme.com page set up to raise funds for a legal battle.
The page was established Jan. 31 by Margaret Birlem, a Cape Elizabeth resident who owns property in South Portland. As of Feb. 21, it had pledges for $7,500 of a $25,000 goal.
Airbnb is also paying close attention to the city’s actions and has urged its users to lobby the city.
According to Assistant City Manager Joshua Reny, as of last November, there were 282 short-term rentals listed in South Portland, with 75 percent of those for entire homes. A quarter of the listings were for single rooms in a home. The average price for an entire home in South Portland was $124 per night, according to Airbnb, he said.
In the first 10 months of last year, South Portland had 160 hosts who housed about 10,000 guests. According to Airbnb’s data, the typical host made $8,000 from renting their home for an average of 36 nights a year, or three days a month, according to data provided by Airbnb.
An attorney for the corporation, Andrew Kalloch, declined to provide information about how much money Airbnb makes from South Portland rentals, but said the company paid $3 million in taxes to the state last year.
Edited Feb. 28 to correct the date the ordinance takes effect and the deadline for hosts to register their short-term rentals.
John Murphy, owner of a short-term rental property, asks the South Portland City Council Tuesday to delay its vote to regulate the rentals in residential sections of the city.