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Bar Harbor debates whether to extend moratorium on lodging development

People work with machinery at a curb in front of buildings. Photo / Laurie Schreiber Winter renovations of downtown businesses get underway to prepare Bar Harbor for the upcoming tourist season.
By Laurie Schreiber

The town of Bar Harbor is debating whether to extend a moratorium on the development of new lodging, as it considers policies to offset or eliminate the effect on residential uses.

The planning board will consider provisions that tackle issues around hotel size and number of guest rooms, residential conversions to transient accommodations, neighborhood compatibility and parking capacity.

The issues have been points of contention for years, as the Hancock County town — a gateway to Acadia National Park and a popular tourist destination in and of itself — grapples with the benefits and consequences of short-term rentals.

Benefits have been said to include added income for vacation rental owners. Locals have said that challenges include the displacement of year-round residents and the erosion of neighborhood character.

Residential concerns

According to a planning staff analysis, the number of guest rooms grew from 2,696 in 2011 to 2,991 this year.

The moratorium took effect in November 2024, with two subsequent extensions. The latest extension is scheduled to expire Jan. 27, 2026.

Reasons for the pause included concerns regarding pressure on public facilities and infrastructure, quality of life, adjacent property values, size, the approval process, traffic congestion, parking and emergency services.

Additionally, there were concerns about the loss and conversion of year-round housing to seasonal businesses and seasonal worker housing, along with the encroachment of commercial operations into residential areas, as a challenge to the community’s stability and character.

The aim of the moratorium was to provide time to evaluate the concerns, determine the adequacy of existing land use ordinances and regulations, and, if necessary, develop additional ordinances and regulations.

Not the sole problem

Over the past year, the planning board compiled data to analyze lodging-related concerns and issues and held seven public meetings and workshops. 

In October, the board voted 4-3 not to recommend extending the moratorium, concluding that while lodging activity is a contributing factor, it is not the sole source of the issues identified. Multiple commercial activities and uses were found to contribute to the concerns expressed by the community, according to a planning document.

The board concluded that the town has sufficient information to address the concerns and issues that gave rise to the moratorium through targeted ordinance and policy work; and said the existing land use ordinance provides a reasonable foundation to manage lodging and related uses. 

Neighborhood cohesion

Although the board didn’t recommend extending the moratorium, it identified areas that warrant attention, including residential conversion. The board said multiple commercial activities contribute to residential conversions, and attributed about half of the reported conversions to lodging uses. Some residential properties have also been converted to parking lots.

“These conversions are reducing available housing, especially in areas adjacent to commercial areas,” the board said.

Other areas meriting attention, the board said, include public water and sewer system capacity; environmental impacts of lodging and other commercial uses located on septic systems and well water; downtown noise; parking; and reduced quality of life for some residents as a result of rising property taxes, continued housing conversions and commercial encroachment.

Additionally, the board said, the “growing presence of nonresidential uses within residential areas raises concerns about neighborhood cohesion, livability and long-term community balance.”

Narrowed focus

Regardless of the board’s recommendation, it’s up to the council whether or not to extend the moratorium, either as-is or modified with a narrower focus.

At a workshop last week, council members mainly spoke regarding the issue of residential conversions.

Dropping the moratorium in January, said one, could lose the benefit of pausing lodging development over the past year. Several spoke in favor of an extension, to have time to develop at least some ordinance changes for voters to consider at their June 2026 town meeting.

But others said that approach could lead to endless extensions and suggested the moratorium be narrowed to focus on transient-accommodation developments in residential neighborhoods.

The matter is scheduled for the next council meeting on Tuesday, Dec. 16. A council vote to extend it would require a public hearing, which would take place in January.

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