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One fee would be used to promote tourism to city; the other would support affordable housing projects.

 PHOTO COURTESY: RACHEL HARRIS   - This Southwest Portland home, owned by Rachel Harris and Bob McCoy, is used for their short-term rental operation. They are active members of the new short-term rental hosts' trade group Host2Host. Two new city fees will be levied on short-term rental operations such as Airbnb and HomeAway, to raise more money for affordable housing and homelessness programs and to promote tourism to Portland.

In a unanimous vote, the City Council gave final approval Wednesday morning to a new fee equaling 2 percent of total revenues for short-term rentals. The proceeds would be directed to Travel Portland, a nonprofit that produces media and other promotional campaigns to lure tourists to the city.

That group pledged to adapt its materials to cater more to travelers interested in staying in short-term rentals, as well as hotels.

In addition, the council directed that the 2 percent fee be expanded to include hotels with less than 50 rooms. So-called boutique hotels had been exempted from the fee before, and the council was receptive to testimony from short-term rental hosts that their operations shouldn't be charged more than smaller hotels.

The other new fee, which will levy a new $4 nightly charge on each short-term rental, proved more controversial.

Commissioners Amanda Fritz and Chloe Eudaly objected, saying a flat fee would unfairly hit short-term rental hosts who charge more modest nightly rents. They indicated they'd support substituting a fee based on a percentage of revenues, to make it more fair.

"It doesn't seem equitable that a $15 a night room would be charged the same as a $1,200 a night room," Fritz said.

But a council majority approved the flat fee, apparently convinced that, while not as fair, it would be more likely to withstand a court challenge.

There are some concerns that a percentage rate could be legally deemed a tax and not a fee, making it easier to overturn.

"This is legally defensible," Mayor Ted Wheeler said of the $4 a night fee.

Funds from the nightly fee will go into the city's Housing Investment Fund, which is used to support low-income housing projects.

Reach Steve Law at 971-204-7866, This email address is being protected from spambots. You need JavaScript enabled to view it., or twitter.com/SteveLawTrib.

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