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City set to levy two new fees on Airbnb, HomeAway rentals
Short-term rental hosts, mobilized via a new trade group, showed up in force Wednesday at a Portland City Council hearing, pleaing to city commissioners to delay two proposed new fees on their industry.
One fee would levy a $4 nightly charge on each short-term renter, with the money dedicated to support affordable housing. A separate fee equaling 2 percent of rental revenue would go to promote tourism to the city.
Some city commissioners expressed willingness to tinker with the $4 nightly fee by switching it to a percentage of total rents instead, but the council appeared inclined to formally adopt the two fees next week, when the two fee ordinances are expected to come up for a second and final reading.
The council first approved the two fees in concept in May of 2017, and Thomas Lannom, director of the city Revenue Division, brought specific proposals to the council, in two ordinances co-sponsored by Mayor Ted Wheeler and Commissioner Nick Fish.
Members of the new group Host2Host asked the council to delay the fees until a planned deregulatory scheme takes place, in which short-term rental hosts will be registered on-line by Airbnb and HomeAway, among others, instead of having to get city permits and mandatory home inspections. Hosts argue that will weed out the "commercial" operators who rent out multiple sites, who Host2Host contends are the real culprits that restrict the supply of affordable housing in the city.
"There's a big misconception that Airbnb takes affordable housing off the market," said host David Boe, one of numerous members of Host2Host to testify.
Greg Raisman said he and his wife couldn't have afforded to remodel their basement if it weren't for the prospective revenues they'd earn via Airbnb.
"We weren't going to have a housing unit to share," he said.
Other hosts said they wouldn't rent out their short-term rental spaces to longer-term tenants because they keep them free for visiting family and other guests. Others said they don't have separate kitchens so their spare rooms wouldn't work as long-term rentals.
Speaking on behalf of the group, Host2Host chair Debi Hertert asked for a delay in voting on the two fees. But she also asked the council to convert the $4 nightly fee into a percentage of rental revenue, so it wouldn't hurt the smaller, lower-cost rental operators harder. Some testified that they rent out rooms for as low as $28 or in the $40s and $50s range, and that $4 would be a steep increase. The industry already pays a 13.3 percent lodging tax, which gets shared with several sources. The city's share already is dedicated to affordable housing, going into the city's Housing Investment Fund.
"Flat fees are regressive," said Commissioner Dan Saltzman. He asked Lannom why he couldn't come back with a percentage rate instead, and that may be in cards when the measure returns for adoption as soon as next week.
Council members also appeared sympathetic to Host2Host concerns that the 2 percent tourism fee was being assessed on them, while boutique hotels of less than 50 rooms don't pay the fee. The council may take up the idea of adding the 2 percent tourism fee on small hoteliers, though they're likely to hear complaints from that affected group when they do.
But the argument that short-term rentals don't contribute to Portland's affordable housing crisis appeared to fall on deaf ears among the councilors.
Several national studies have shown that the short-term rental industry takes some otherwise affordable housing off the long-term rental market, Fish said. "We've already settled the question of the impact of short-term rentals in long-term housing affordability," he said.
The city is "asking an industry that is taking rentals out of circulation" to help address the problem, Fish added. "Under this modest proposal, visitors will be asked to chip in a little extra to level the playing field."
"This ordinance is another step in addressing the housing crisis," Lannom added.
The council also seemed unconvinced that city tourism promotion doesn't help the short-term rental hosts, as Host2Host argues.
"We know that they benefit from tourism promotion," said Jeff Miller of Travel Portland, the entity that will spend the new revenue to promote tourism.
But Miller pledged to appoint at least one person from the short-term-rental industry to the board, and to solicit ideas from hosts for promoting their industry in tourism campaigns. A new website has been set up to do that, Miller said.
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