Portland, with Munjoy Hill in the foreground, is among the cities nationwide trying to develop a policy on short-term rentals to deal with complaints from hotels and housing advocates.
The city of Portland has issued warnings to nearly 145 property owners for failing to register their short-term rentals with the city. Owners who don’t comply could face fines of as much as $100 per day.
The warnings come as the number of rentals in Portland continues to rise. This year, 803 units have been registered with the city, 8 percent more than the 744 registered last year through August. And that figure does not include the 144 short-term units that haven’t been registered.
The city has also seen a surge in non-owner-occupied units, which housing advocates fear is eroding the city’s scarce affordable housing supply. Those registrations jumped from 125 to 400, an increase at least partially attributed to a change in the way the city defined those units. It’s unclear how many of the unregistered units are also non-owner-occupied.
On Wednesday, the City Council’s Housing Committee will discuss possible enforcement actions, according to Jill Duson, an at-large councilor who chairs the committee.
“My general take on things is we want compliance, not punishment,” Duson said.
Mayor Ethan Strimling has been pushing the council to clamp down more aggressively on short-term rentals.
His proposals have included steep increases in registration fees – up to 400 percent in some cases – and moving toward a one-person, one-listing model. Last year, he warned councilors that the changes they made to the program did not go far enough and that the council would soon need to revisit the issue.
“I think we have to be very strict about enforcing these rules,” Strimling said Friday. “We simply don’t have enough long-term housing in the city to meet the needs of our families. And this is squeezing people out more and more.”
Portland has nearly 30,170 occupied housing units, including nearly 16,900 rental units, according to 2017 estimates from the U.S. Census Bureau. The total number of short-term rentals – registered, unregistered and including 110 island rentals – is about 3 percent of that supply.
Like other communities across the country, Portland has been wrestling with how to regulate these kinds of units. Critics argue that short-term rentals remove affordable long-term housing from the market and drive up rents. Proponents say the impact is overstated and that many hosts are simply trying to make ends meet and are not making large profits.
Last fall, the council changed its short-term rental rules, enacted in 2017, to better account for units that are not a person’s primary residence, also known as non-owner-occupied or non-hosted units.
It’s an important distinction, because non-owner-occupied units are capped at 400 citywide, excluding the islands, while owner-occupied units are not.
Under the old rules, the owner of a multi-unit apartment building who lives in one of the apartments could register up to five of the other apartments as owner-occupied, and those units would not be subject to the cap.
The rule change made it clear that only rooms rented in a person’s primary residence could qualify as an owner-occupied rental – others are non-owner-occupied.
The council also increased the number of non-owner-occupied rentals allowed in the city from 300 to 400. The goal was to allow those already operating to continue, as well as allow applications filed under the old rules to be approved.
That figure was an estimated 346 units when the ordinance was passed last October, even though only 152 non-owner-occupied units had already been registered. But now that figure is at least 400.
“We know there’s a lot more Airbnb going on out there than we realize,” Strimling said. “That’s why we need to be much tougher with these regulations.”
The city has hired an outside contractor – San Francisco-based Host Compliance – to help enforce the ordinance. The company uses computer software to monitor dozens of short-term rental sites, like Airbnb, VRBO and HomeAway, for listings. It compares those listings to the city’s registry. Those results are reported regularly to the city and violation letters are then sent to the property owners.
City Hall Communications Director Jessica Grondin said that no one has been fined for operating a noncompliant short-term rental. The warning letters sent in May gave each property owner 30 days to respond.
“Now that the 30 days has passed, we will be sending the second violation letters out next week, and in that letter they have 30 days to become compliant or their info is referred to Corp Counsel to begin legal action for civil penalties,” Grondin said, referring to the city’s lawyer, or corporation counsel.
Property owners face a potential $100-a-day fine for noncompliance. Grondin said the city would likely have to take offenders to court to collect those fines.
City Manager Jon Jennings proposed a “modest remedy” in a May 20 email to councilors. He suggested offering an incentive for property owners to settle with the city. Owners would be allowed to continue operating their unregistered short-term rentals through Aug. 31, but only if they paid the city $1,000 a month from May through August.
“This proposal would only be for the 2019 season,” Jennings said. “The STR applicants will remain on the wait list.”
Duson said she is interested in hearing a public presentation on the city’s data before weighing in on next steps.
“I was surprised there would be so many people” who didn’t register,” Duson said. “I think, at least, the committee thought we had revised the system so everyone who was currently operating would get their butts in and register and move forward.”
She added: “Folks are going to have to comply. It may turn out that folks have to stop operating.”