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Vacation rental industry experiences modest growth
Predicted increase in tourism could bring a surge to industry, prompting new considerations
It's no secret that the Newberg area is working to become a stronger tourist destination, and that in many ways it's already happening.
More people visiting the area are providing a boost to the local economy — just look at the spike in lodging tax dollars — and in some cases the trend has expanded or created entirely new industries, such as the vacation rental market.
Most well-known through websites like AirBnB and VRBO (Vacation Rental By Owner), vacation rentals are residential units that are rented out for less than 30 days. Sometimes it's a small cottage tourists rent out for a couple nights, sometimes it's a luxury house in the Dundee hills. The constant is that the concept is generally private homeowners renting out their property rather than more of a business model like a bed-and-breakfast.
The industry began to come into Newberg and Dundee a few years back, and one local resident saw an opportunity to start her own business.
Lifestyle Properties is a vacation rental management company founded two years ago by Megan Carda, a Dundee native who left the area to work in the hospitality industry and once thought she'd never be able to live in her hometown while working in her chosen field.
But as wine country gained acclaim and The Allison Inn & Spa brought travelers to Newberg, that became a possibility. Carda returned home and eventually founded her solo business managing vacation rentals for private owners. The homeowners get to rent out their property without worrying about all the tasks that go along with making it an attractive place to rent and a good experience for customers.
Carda was one of the few individuals who went to planning commission meetings to provide testimony on vacation rentals as local regulations were considered, and offered her opinion to this newspaper as the regulations went into effect in 2014.
At that time she was managing three properties and had two more in the works. She was the only employee, meaning she was doing everything from booking, checking in, providing customer service, cleaning and checking out.
Two years later, the business manages 12 properties and has between five and 10 more in the works in the coming winter months. Carda has hired three full-time employees besides herself.
Besides the natural growth of a business, Carda points to an increase in popular local events as a boost to vacation rentals.
"That's definitely what's driving the industry out here, is the tourism, all the wineries and the new events that are taking place," she said. With the Willamette Valley's recent designation as Wine Enthusiast Magazine's 2016 "Wine Region of the Year," she expects the growth only to continue.
"That's going to be a huge influx of people coming to this area and needing lodging," Carda said.
And, Lifestyle Properties' general manager Katy Armes adds, "there's not enough beds in the county to accommodate the tourism influx."
Short of new hotel construction, that will likely come about through more residences being converted to vacation rentals, which means, along with bringing in more transient lodging tax revenue, the industry could receive more scrutiny as it takes off in a bigger way.
Lifestyle Properties already manages vacation rentals all over the county, from Newberg to Dayton to McMinnville, giving it a good look at the different cities' regulations and how they work.
In general the regulations are looking at similar points: parking, cleanliness, noise and the like. It's a little more lenient in Dundee than in Newberg, as the code allows vacation rentals to operate in any residential use zone with only a city staff decision, rather than a public hearing before a city commission.
Newberg requires a conditional use permit which needs planning commission approval and a longer process, for vacation rentals proposed in the R-1 or R-2 residential zones.
In the city limits Dundee has nine legally operating short-term rentals, while Newberg has 13 — although both numbers include bed and breakfast units as well, meaning the strictly "vacation rental" population is slightly lower. The numbers are also complicated by many vacation rentals that are just outside the city limits and are therefore considered under county jurisdiction.
Both Newberg and Dundee planning departments say they periodically check vacation rental websites to ensure there aren't any operating under the radar.
Both cities are also notably without regulation regarding where vacation rentals can be located in relation to other similar units.
"There's no restriction yet at this time of, can you be within X number of feet of another vacation rental," City Administrator Rob Daykin said, and no such rule exists in Newberg either.
That notion came up two years ago when Dundee was crafting its regulations, particularly as attention was focused on the situation in Bend: media reports described entire neighborhoods that were made up of vacation rentals, creating a whole host of problems and leaving areas without a sense of community. Recent reports in the Bend Bulletin suggest the issue persists two years later.
Newberg and Dundee are far from experiencing that kind of phenomenon, but similar thoughts are still on locals' minds. When the Newberg planning commission considered one downtown area vacation rental earlier this month, one neighbor submitted public testimony expressing concern that the increase in short-term rentals could be problematic.
"Long story short, a community is strong, vibrant and fulfilling because of its residents," the testimony read, adding that another short term rental "will create another home that isn't occupied by someone vested in the neighborhood, but by a weekend tourist."
In other communities, generally larger cities such as Portland, the concern has been that vacation rentals impact housing availability. It may be a stretch to describe the 13 short-term rentals and bed-and-breakfasts in Newberg as having a serious impact on the housing supply.
But even so, Carda said her company balances these kinds of considerations when taking on a new vacation rental. She and her employees are also local residents, and explain that they understand and share some of the concerns of a community becoming oversaturated. In some cases, Carda said, properties are more suited to being a traditional long-term rental and she'll suggest the owners talk with a long-term management company.
Houses that are near the city core and are in walkable areas — such as the property recently approved a block off Hancock Street in Newberg — are particularly attractive for the vacationer.
"People can walk to all these downtown activities," Carda said. "But again, you don't want to turn Second Street into, only houses on Second Street are vacation rentals, and no (long-term) housing."
That's why Carda says the local regulations might need to be revised as the area's popularity increases, and although she's in the industry she is actually a proponent of more regulation if it helps to maintain a positive balance between vacation renters and local residents.
To avoid oversaturation in another new industry, that of marijuana sales, city regulations generally establish a "buffer zone" around each facility in which other similar facilities can't locate. Something similar in the vacation rental industry, though likely much less than the 1,000-foot buffer common to pot shops, might be a future consideration.
Another possibility could be to determine some districts which could be more open to vacation rentals, focusing the industry into the areas naturally better suited to the practice.
It's unclear when or if wine country will ever face exactly the scope of vacation activity that Bend and similar areas have seen — wine tourists could naturally be a different crowd than the partying populations. But at least some local industry experts see it as a real possibility, and suggest proactive planning rather than trying to catch up once the trend takes off.
"I think it has the potential to be just as busy as Napa and those areas," Carda said. "And I definitely think the potential of having what is at Bend and … the coast, if it's not regulated correctly, I do think there's a potential that could happen here given the existing regulations."