Portland could become one of the first cities in the nation to legalize Airbnb and other short-term home rentals, but its not going to allow it in apartments and condos.
At a Portland City Council work session Tuesday, city commissioners appeared to resolve most of the thorny policy questions associated with a proposed ordinance to bring short-term home rentals out of the underground economy.
Under the ordinance, the city would require hosts to obtain city permits, pay a $180 fee, get city inspections every six years and pay lodging taxes to the city. But renting out condos and apartments for less than 30-day periods, or renting out entire homes for short-term vacations, would not be allowed and technically would remain illegal.
Airbnb, which is witnessing a backlash against its services in New York, San Francisco and other cities, welcomed the news, despite losing its bid to legalize short-term rentals here in apartments and condos.
Were disappointed by that provision, said David Owen, Airbnb public policy director, who attended Tuesdays work session. I still think this is a phenomenal step forward for those who are concerned about home-sharing.
The council will take more public testimony on the ordinance on July 2, and vote on a few unresolved issues, and then is expected to pass it on July 16.
Though renting homes and other properties for less than 30 days is illegal right now in Portland, Airbnb reports about 1,500 hosts are doing just that. There also are several smaller competitors active here, including numerous vacation rental firms.
San Francisco-based Airbnb, which recently opened an operational headquarters in Old Town/Chinatown, has said about half its 1,500 or so local hosts live in multifamily buildings, and wanted the city to legalize those.
But a majority of city commissioners opposed the idea Tuesday.
Commissioner Nick Fish thought it ill-advised to sanction short-term rentals in condos and apartments when nearly every multifamily lease and covenant bars subletting or commercial activity.
There also are security concerns when strangers are allowed into locked complexes. You have to be buzzed in or allowed into most multifamily buildings, Fish said.
Planning and Sustainability Commissioner Chris Smith said he and his partner rented an apartment in Seattle recently through Airbnb, but were turned away when a landlord asked why they were there.
There also are concerns that Airbnb can be so lucrative that it will remove rental housing from Portlands already tight supply. Some hosts, testifying to the City Council on June 4, noted they are fetching such high nightly rents that they acquired other units to rent out through Airbnb.
Smith said the Planning and Sustainability Commission endorsed the proposed ordinance by an 8 to 1 margin with the understanding it wouldnt allow short-term rentals in apartments and condos. We would have a grave concern if we move into these multifamily buildings that we would reduce the supply of housing, Smith said.
The City Council is expected to vote July 2 whether to require a host to live in their property at least six months or nine months a year. Commissioner Steve Novick said he likes the idea of a nine-month requirement and a limit on the number of days someone may rent out rooms. Otherwise, you are running a little hotel, Novick said.
The council isnt moving forward on a recommendation to require hosts to advertise their license number when they seek business, much as home contractors do to provide some consumer protections. Sandra Wood, supervising planner for the Portland Bureau of Planning and Sustainability, said she didnt know how the city could regulate advertising. But Wood suggested those shopping around for an Airbnb or other local site could look up the address of the home under portlandmaps.com, to see if the host has a permit and what the permit number is.
No matter what the council does, its likely that much of the Airbnb and similar operations will remain in the underground economy, untaxed and unregulated. But, as with much in the city, neighbors facing problems with short-term rental operations can file complaints with the city, which will be investigated. The fee for a code violation is $280 a month for a single-family home, which is more than the initial license fee, so there is an incentive to get licensed.
In the meantime, Mayor Charlie Hales said, the city is in a trial and adaptation period.
Hosts under Airbnb and other programs are legally required to pay 12.5 percent lodging tax, 11.5 percent of it to the city and 1 percent to the state. Thats even if the operations are still technically illegal.
Hosts also are legally bound to report their income to the state and federal governments and pay income taxes on their earnings.
While few Portland hosts are doing either right now, Airbnb has agreed to start collecting the lodging tax for its rentals in the city, starting July 1.
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