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October 16, 2020

Portland referendum Question E tackles short-term rentals

A narrow city street with three-story wooden apartment buildings on the left and a large modern condominium development on the right, at the end of the street the ocean can be seen Photo / Maureen Milliken Portland voters are deciding whether to further limit short term rentals in the city, through a referendom on the Nov. 3 ballot.
What is the language in Portland referendum Questions E, A and B?
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Five referendum questions on the Portland Nov. 3 ballot, the result of a People First Portland citizens initiative, aim to increase affordable housing, make development more attuned to climate change and elevate working and living situations for the city's residents. All five are strongly opposed by a variety of business, government and nonprofit organizations. Mainebiz is taking a look this week at the questions. Today's article focuses on Question E, which looks to put more restrictions on short term rentals, as well as A (city minimum wage hike) and B (facial recognition limits). Wednesday's article was about Question C, the "Green New Deal," and Thursday's focused on Quesion D, rent control.

Airbnb released results of a survey this week that said Maine ranks No. 5 as a destination for people planning 2021 post-pandemic travel. And it's no secret the short-term rental industry has flourished in the state — Maine Airbnb hosts raked in $100 million in 2019 from some 534,000 guests, according to a January report from the company.

But in the state's largest city, the short-term rental industry is seen by some as one of the factors contributing to a serious housing crisis. Question E on the city's Nov. 3 ballot looks to put more restrictions on short-term rental hosting in the city, whether it's through Airbnb or other means.

Proponents say too many potential apartments in the city are being used for short-term rentals instead of being freed up for full-time residents.

Opponents, though, say the industry gives tourists, a major factor in the city's economy, more options and also provides income for city property owners that allows them to live in Portland.

The referendum, in general, proposes:

  • Allowing only owner-occupied short-term rental units, except on the islands;
  • Increasing the annual registration fee to $1,000 for mainland; $400 for islands from the current $100, with additional fees; for additional units; money would go to the city's Housing Trust Fund, which goes toward creating affordable housing in the city;
  • Limiting the amount of units per owner to five;
  • Limiting guests per unit to two per bedroom and four overall;
  • Increasing penalties to $1,000 a day per violation, and strengthening enforcement;
  • Allows the city to revoke licenses for repeated violations.

The city ordinance, which went into effect Jan. 1, 2018, requires all short-term rentals to be registered, with penalties for operating an unregistered rental unit and a $1,000 fine for providing false information on the registration form. The city limits units that are not owner-occupied to 400, and has 805 registered units altogether on the mainland. There are no limits on island rentals, where 113 units are registered.

Mayor Kate Snyder and seven of the city's nine councilors issued a news release earlier this week opposing all five of the People First Portland questions, saying they will undo progress the city has worked hard to achieve over the past few years, including in-depth discussion of, and changes to, short term rental policy. Councilors signing the letter were Nick Mavodones, Jill Duson, Belinda Ray, Spencer Thibodeau, Tae Chong, Justin Costa and Kim Cook.

If approved, any changes the council wants for the next five years can only be made by a ballot vote of the city's residents.

Proponents: 400 more rental units

While the city of Portland has worked on regulating short-term rentals in the past couple of years, it's not enough, said Karen Snyder (no relation to the mayor), speaking for People First Portland. Question E tweaks language already in place to make the ordinance work better.

People First Portland says that the ordinance would add an estimated 400 long-term rental units in the city. "When housing is treated as a commodity, short term rental properties, like those listed on Airbnb and VRBO, take away our long term housing," People First Portland says on its website. "Returning those units to Portland residents helps us house more people."

The group, which formed from the Southern Maine Democratic Socialists of America political party, has the support of a variety of labor unions and the Maine State Building & Construction Trades Council, as well as advocacy groups the Maine People’s Housing Coalition, Black P.O.W.E.R, Southern Maine Workers’ Center and the Portland Maine Green Party.

Karen Snyder said there are an estimated 800 unregistered short-term rentals in the city on top of the 805 registered ones. "And lord knows how many are unidentified." 

The enforcement language in the ballot question is taken straight from South Portland's ordinance, where the clampdown on short-term rentals is much more effective, she said. "We're not proposing anything brand new," Snyder said, adding that South Portland's ordinance has been effective.

Opponents: Helping residents stay in Portland

But Willy Ritch, of the Portland Homeowners and Tenants Association, said, "The vast majority of short term rental hosts are Portland homeowners who are just trying to be able to afford the mortgage, property taxes and maintenance on an old house and this referendum would make it harder for them to be able to afford to live in Portland."

Question E is opposed by groups ranging from the Maine Real Estate and Development Association, the Greater Portland Regional Chamber of Commerce, business owners and developers, many coming under the umbrella of the group Building a Better Portland, which was formed a few months ago to oppose Questions C, D and E.

Ritch, a short-term rental owner, told Mainebiz, "The City Council put regulations for short-term rentals in place and then tightened them up less than two years ago."

He said that Question E "goes way too far," including the yearly per-unit fee. "Even if you just want to rent out a single bedroom a few times a year." He said it would ban most short term rentals and the fines are too high.

The PHTA held a media call last week, highlighting how allowing the rentals helps Portland property owners.

Mona Qaddoumi, one of the short-term rental owners on the call, said she and her husband have a toddler and another child due in December. Short term rentals are a way to save for their kids’ college education.

“We both work full time jobs but we know how expensive higher education is going to be for our children," Qaddoumi said. "If these restrictions end up limiting us to not be able to do it anymore, it would really affect our long term financial plans for our family.”

Question A — city minimum wage

Question A proposes that the city's minimum wage increase to $15 an hour by 2024, with steps of $13 in 2022 and $14 in 2023, with a  wage of $22.50 during government-declared states of emergency. (Maine has been under one since March because of the COVID-19 pandemic.)

The measure would also set the tip credit to half the increased wage and moves the effective date of annual cost-of-living increases to the minimum wage from July 1 to Jan. 1 to make it consistent with state law.

The current wage of $12 an hour "is simply not enough to afford rent, food and health care," People First Portland says on its website. "The minimum-wage worker is not the stereotype that you’ve heard: most of us are adults between 25 and 54; more than half are women; 28% have children; we span industries such as manufacturing, health care, and construction; and on average we provide 52% of our family’s total income.

"Raising the minimum wage not only helps us workers — when we have extra money to spend, local economies also get a boost," the website says.

Opponents say the increased wage is beyond the ability of local businesses to pay.

“Minimum wage is an important issue to continually address," said Mayor Kate Snyder. "However, a Portland-only mandated jump to $15/per hour and the requirement to pay time and a half (up to $22.50) during any declared emergency would likely have devastating impacts on both small businesses and employees in Portland."

The wage would drive businesses out of Portland, said Curtis Picard, president and CEO of the Retail Association of Maine. The RAM and a variety of businesses formed the group We Can't Do 22, which highlights the fact that employers could eventually have to pay more than $22 an hour.

"A lot of businesses are very concerned," Picard said, in an Oct. 7 Eggs & Issues webinar sponsored by the Greater Portland Regional Chamber of Commerce.

Question B — facial recognition technology

Question B addresses facial recognition technology, something the city council voted to ban in August. Facial recognition is said by many to unfairly targets people of color and is opposed by the American Civil Liberties Union as well as other civil rights organizations.

Portland joined the growing number of cities that have banned it, approving a measure in August. The mayor and councilors, in their letter this week, said the referendum, if passed, will undo work the city did to come up with its ordinance, which went into effect last month.

The American Civil Liberties Union supports the referendum, which differs from the city ordinance in that it allows those feel they were targeted by the technology to take action against the city and also bans its use as evidence in court, which councilors removed from the original proposal from Councilor Pious Ali. 

“We are maintaining democratic control over a technology that is unreliable, racially-biased and a threat to democracy itself,” Ali said in an statement released by the city after 9-0 unanimous vote to adopt the technology.

The referendum calls for:

  • Banning the city, or any third-party contractor, from using face surveillance technology;
  • Banning its use as evidence; 
  • Providing attorneys fees for complaints;
  • Paying a fine to those harmed by its use in the city.

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