By Midge Pierce
Portland’s short-term rentals are burgeoning. Now, the City wants its fair share of the action.
The number of STRs has quadrupled in a two-year period to an estimated 5000 units since they were allowed in multifamily dwellings as well as single residences.
Two land use attorneys believe one out of five is out of compliance with regulations. Not surprisingly, the bulk of these are Airbnbs.
Despite the relatively low cost of inspection and permits, attorneys Edward Sullivan and Carrie Richter say the City’s registration and regulation system is failing. Only 22% of STRS are registered as required by 2016 regulations, according to a column they wrote for the Daily Journal of Commerce.
Hosts receive an estimated average monthly income of roughly $1200. This is largely money from out-of-town visitors that can be plowed back into the local economy. Registering with the City to operate before advertising STRs costs less than many hosts make with a single stay. It requires a basic inspection and permit that costs $178.
Sullivan told The Southeast Examiner that short-term rental websites have the perfect formula:
“For potential guests, they provide a lower price, multiple potential hosts and an informed choice. For hosts, they provide income. For local governments, they can provide an income stream. For themselves, they take a percentage. On the face of it, everyone’s a winner. However, not everything is what it seems.”
Whether short-term rentals poise long-term headaches is unanswerable, according to Richter.
“You cannot know the consequences, intended or not, of permitting a new use unless you can measure it,” she says.
”Until the City comes up with a registration scheme that incentivizes hosts and owners to participate, any evaluation of consequences is little more than speculation.”
One speculation is that STRs take away housing needed for long-term rentals. Hosts can often generate more income with short-term than long-term rentals. Keeping units out of the long-term rental pool can contribute to the housing shortage, spiraling prices and development pressures.
Another perspective is that short rentals wouldn’t exist in the first place if they weren’t lucrative. Still another question is how to fairly add STRs to the tax rolls given potential traffic and noise impacts on neighbors.
Determining fair taxes to homeowners results in land use and equity considerations, according to Sullivan and Richter.
As Portland scrambles to develop a licensing and taxation process that will result in better compliance, STRs remain a mixed bag.
On the one hand, Portland stands to gain more than $3 million in registration revenues if compliance is improved. That is money that could go, in part, to its Housing Investment Fund for affordable housing.
On the other, chasing down hosts that skirt the rules is time-consuming and expensive for a worked-to-the-max planning bureau. The rules require that hosts live on sites most of the time, a requirement difficult to monitor.
Under the current system, BDS enforcement is based solely on complaints. A frequent complaint is about STRs that become noisy, party venues. Neighbors also complain about the loss of available parking. In our DIY, sharing economy, the STR movement, and STR complaints, are likely to grow.
As the City grapples with the tough issues of compliance and fairness, STRs are mostly booked to the max.
One host says, “The good ones have more bookings than they can handle.” He adds that those with the most bookings go to the top of the list on sites like Airbnb.