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4-3 vote approves companies like AirBnB, VRBO to operate in Lake Oswego, reversing a 2017 ban

PMG FILE PHOTO - The City Council voted 4-3 to legalize short-term rentals at a public hearing Tuesday. In a split decision, the Lake Oswego City Council approved Tuesday night an ordinance that will allow short-term rentals like AirBnB, VRBO, Vacasa and others to operate within the city limits legally.

Following an exploratory process by the Planning Commission at the direction of City Council — a reverse course from its 2017 decision to uphold a ban on short-term rentals (STRs) — the council received a list of recommendations and findings compiled by planning staff that the commission vetted and approved after several work sessions and public hearings.

Much of that work was led by Planning Director Scot Siegel and his staff, who have been the boots on the ground throughout the exploration of this issue, as well as the members of the Planning Commission who provided insight and commentary on policy that led to the draft ordinance which came before the City Council.

Code Enforcement Specialist Bill Youngblood — who has also invested a significant amount of time into this issue — compiled statistics on complaints showing that over the past 11 years the city has only received 24 complaints, or about two per year, in regard to the operation of STRs, but the nature of those complaints is unknown. There are approximately 22 STRs currently operating illegally in Lake Oswego.

A survey of 854 LO residents across 26 neighborhoods taken last year showed there was no clear majority outside the margin for error on whether citizens wanted to allow STRs on a trial basis, with 53 percent of respondents saying yes and the other 47 percent saying no.

But throughout the public hearing process Tuesday evening, the council heard nearly a dozen people give testimony in favor of allowing STRs to operate legally for a number of reasons including it being a great way to meet people from across the nation and globe, to allow residents to earn a little extra income, to take the burden off families who have relatives visit them and to expose new people to the community.

Only three people testified against allowing STRs, arguing that if allowed they would ruin the residential character of Lake Oswego's neighborhoods.

The council considered the public's testimony and discussed some of the aspects of the draft ordinance recommended by the Planning Commission, particularly regulations regarding the square footage of a home that could be used for an STR (25 percent), the maximum number of guests allowed (6), whether or not the primary resident would need to be onsite during certain hours (midnight to 6 a.m.), and whether or not to limit any rental from operating any more than 120 nights per year.

Nearly all those offering positive testimony for STRs argued that these regulations were too restrictive and asked the council to reconsider.

After a motion by Councilor Theresa Kohlhoff to revert to the outright ban and a failed 3-4 vote, Councilor John LaMotte offered a lengthy and wordy motion clearing out all of the regulations the public had identified as being too restrictive.

After a nearly hour conversation going back-and-forth with City Attorney David Powell on what exactly LaMotte's motion entailed, the council voted 4-3 — with Councilors Kohlhoff, Skip O'Neill and Mayor Kent Studebaker in dissent — to approve the modified ordinance.

See also:

Short term rentals headed to City Council (read story)

Lake Oswego City Councilors appear open to easing ban on Airbnb (read story)

"The reason I won't support this is it's not a god-given right to rent out your house. There are other cities similar to ours (Oregon City, Tualatin, Tigard, Los Gatos, Carmel) where you have to go to a hotel," Kohlhoff said. "What isn't fine, from my perspective, is that we're monetizing our neighborhoods, and it's we, as neighbors, having to live with that."

LaMotte asserted that much of the "fear-mongering" taking place by the "vocal minority" was detrimental to the dialogue around the operation of legal STRs in Lake Oswego — stating that widespread reports of parties and unruly guests ruining the community's residential character were unfounded. Testimony from the public and the data from Youngblood supported LaMotte's statement, but the trepidation over the assertion that STRs bring in "bad people" still remained in the minds of some.

For Councilor John Wendland, he said he believes that the market — the companies whose software allow home-sharing and those who take part in renting their homes as STRs — would correct that, and regulations around the home occupation model would prevent residential character from being disturbed.

"As liaison to the Planning Commission, I know they spent a lot of time on this because they wanted to please everyone, but that's a tough thing. In Lake Oswego we spend a lot of time on policy so we come out with a good solution," Wendland said. "I think the home occupation model help keeps the residential character of the house and neighborhood."

The council will finalize its approval of the ordinance at a regular meeting Tuesday, July 16 at 3 p.m.

The ordinance the council approved allows STRs to operate under the social/home occupation model using the following provisions:

— Only a primary resident (meaning someone whose driver's license and voter registration is attached to the address) may operate an STR at their home.

— Any individual operating an STR must register with the City, apply for a home-business license and pay the applicable fee

— The primary resident does not need to be present during the rental period.

— No limit on the number of nights per year an STR may operate

— No limit on the floor area of a home that may be rented, meaning entire homes may be used as STRs, but no more than one rental per lot (an additional dwelling unit or home may be rented, but not both separately)

— No maximum number of guests

— A two-year sunset was added to the ordinance, at which point the council will review how the operation of STRs has gone so far

— The City's transient lodging tax would be applied equally to the operation of STRs as it is to local hotels

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