Vacation rental demand on the rise in Newberg and Dundee
For Newberg and Dundee, the $6.51 billion dollar Oregon wine industry not only brings jobs, it brings tourists.
Those tourists want to enjoy the ambiance of wine country and wine, but more of them are skipping hotels in favor of short-term vacation rentals (STRs) and some in Newberg are trying to meet that demand.
"Vacation rentals can fill the gap of what people are really looking for," said Megan Carda, owner of Lifestyle Properties, which manages vacation rentals in Newberg and Dundee. "They are not necessarily looking for that entry level hotel, but they can't necessarily afford the Allison, or they are coming with family and can't do three or four bedrooms at a hotel."
According to city of Newberg's planning department, there are 26 STRs operating within the city. Dundee has about a dozen, according to Rob Daykin, city administrator.
Neither Newberg or Dundee has code limitations on vacation rentals but there is growing concern over vacation rentals and the reduction of housing supply and affordability. Other cities in the country, however, could be instructive cases as Newberg and Dundee consider the issue.
For traditional vacation destinations, like Hawai'i, the impact has been significant. In Maui, for instance, one in seven housing units is a vacation rental. In Lahaina, it is one in three.
According to the Hawai'i Appleseed Center for Law and Economic Justice, rental units put pressure on local residents by driving up rents. The National Association of Realtors stated in a study that 30 percent of vacation property owners and 32 percent of investment property owners plan to rent their homes as short-term rentals in 2018. These numbers are up from 25 and 24 percent, respectively, in 2017.
With a small amount of STRs, though, Newberg and Dundee seem little affected as much as other cities, although that could change.
Typically, when one thinks of an STR in this area, it's Air B-n-B and they imagine a bedroom with a separate entrance inside of someone's home located close to a vineyard or downtown.
But of the 26 STRs in Newberg, seven are large full-home rentals, including three approved so far this year, according to Newberg Community Development director Doug Rux. The latest is a 3,714 square foot, four-bedroom, 3.5-bath house with a two-car garage and a carport that was approved June 28.
For homes that have four or more bedrooms, an owner is required to file a conditional-use form, which means that there will be a public notice and public hearing before the planning commission, which makes the final decision on approval.
For, smaller homes, owners file for administrative review.
"Administrative is as long as they meet the requirements, sort of a check off," Daykin said. "If you do this your good to go."
In this case, the neighbors do not have a say.
For Carda, who dove into the vacation rental business five years ago, the new niche in the market provided an opportunity to build a career around doing something she loves.
The Dundee native and former employee at the Allison said there were times when the hotel would be booked and no one could find a place to stay in Newberg because everything was sold out.
"I thought, 'What should I do?' I saw the need for more lodging and I approached my parents and said, 'Hey, can I change your basement into a vacation rental?' My dad thought that I was crazy. I said, 'I think that there is an opportunity here, I really do.' So we renovated his basement into a private guest suite. We've been busy ever since with it."
Her company manages properties that lay on the exclusive side of vacation rentals by including private connoisseur services, setting up wine tours and hiring in-house chefs, all while managing the property for the owners.
Carda said there is a wide range of hotels in Newberg, from the Best Western to the Allison, and each offer different experiences. "I also sit on the Transient Lodging Tax committee where we are trying to design the future of marketing for tourism coming into this area," she said. "I think for the most part there is a still a need for an alternative form of housing."
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