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City legalizes Airbnb, other short-term home rental services

People renting out their homes to short-term tenants and tourists will now be operating legally in the city of Portland.

Portland city commissioners unanimously approved a new ordinance Wednesday that will allow Airbnb-style operations to emerge from the underground economy. Residents may rent out one or two bedrooms for periods of less than 30 days, if they get a $180 city permit and submit to cursory safety inspections by the Bureau of Development Services.

The hosts, either homeowners or those renting a single-family home, must agree to reside on-site for at least nine months of the year. The hosts can hire whoever their want to manage the in-home rental business.

Airbnb, which has more than 1,500 hosts in Portland, has agreed to start levying some of the lodging taxes tourists should have been paying, and deliver the funds to the city.

The city is effectively allowing more “commerce to happen in single-family homes,” Mayor Charlie Hales said after the 4-0 council vote Wednesday morning. “I think it’s the right call.”

The city has long allowed residents to pursue “home occupations” such as piano lessons out of their homes, Hales noted.

It’s often the case, the mayor added, where travelers say they went to a city that’s a nice place to visit but they wouldn’t want to live there. “We want Portland to be both.”

And city commissioners love that the “sharing economy” is bringing more visitors to live in Portland neighborhoods, which Hales said is one of the city’s selling points that tourists often don’t get to experience.

Commissioner Dan Saltzman praised Airbnb, which has lobbied heavily for the ordinance, as a “great corporate citizen.” Saltzman hailed this week’s announcement by the San Francisco-based company, which opened a satellite office in the Old Town/Chinatown neighborhood, to a deal whereby its local hosts would provide lodging to emergency workers during emergencies.

Earlier the City Council agreed to dedicate $500,000 from the new lodging tax proceeds for affordable housing in the 2014-15 city budget. Saltzman, who oversees the Portland Housing Bureau, said he’ll bring an ordinance to the City Council next week that would dedicate future lodging revenues to affordable housing.

Commissioner Steve Novick said he’s still nervous about legalizing short-term rentals. But right now the city is allowing the underground operations to compete with regulated and taxed companies such as bed and breakfasts and hotels, and Novick said that isn’t fair. Like others on the council, Novick also is concerned that Airbnb and similar operations will cut into the city’s supply of affordable housing.

“I cautiously vote aye,” Novick said.

Commissioners Amanda Fritz secured a requirement that city planners report back in September 2015 on how the ordinance is working, and how it might be affecting the stock of affordable housing. She also voted for the ordinance.

Commissioner Nick Fish was not present for Wednesday’s session.

Airbnb and rival companies are already connecting tourists and other visitors to short-term Portland lodgings in single-family homes, apartments, condos and vacation homes.

For now, the city isn’t allowing Airbnb or its competitors to use apartments or condos for short-term stays, or whole-house vacation rentals, or allow hosts to rent out more than two bedrooms of their home.

But everyone expects such illegal operations will continue, as the city only intervenes in response to citizen complaints.

By fall, the City Council plans to take up provisions that might allow short-term rentals in apartments and condos, perhaps only with the signed approval of landlords and condo owners associations. By next spring, the council may consider allowing short-term rentals in vacation homes.

And Hales promised the City Council also will tackle what he views as a more politically sticky issue: legalizing grass-roots alternative taxi services such as Uber and Lyft. Those allow citizens to use their cars as taxis, “flagged down” by people using their smart phones.

Portland taxi companies are wary of the new competition, and they have a long track record of lobbying the city and mobilizing their cabbies to defend their interests.

Steve Law can reached at 503-546-5139 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

Twitter: @SteveLawTrib