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January 19, 2021

Portland's new rent control ordinance applies to short-term rentals

a closeup of a sign that says apex luxury rentals next to a clapboard building and a view down the street to portland's eastern promenade Photo / Maureen Milliken Short-term and long-term rentals come under the same rules under Portland's new rent control ordinance, city officials said.

Portland's new rent control ordinance, including an inflation-based cap on rent increases, applies to short-term rentals as well as traditional long-term rentals, the city has determined.

The city released "additional clarification to its official interpretation" of the ordinance that says short-term rentals are subject to the same annual rent increase caps that long-term rentals are, must submit information annually and follow other rules of the new ordinance.

Exempt from the rules, for both short-term and long-term rentals, are landlord-occupied buildings with fewer than five units.

Owners with short-term rentals posted on Airbnb, VRBO, HomeAway and other sites generally raise and lower rents relative to the area's market, the season, local events that draw big crowds and other factors.

Currently, Portland rentals range from about $95 to $150 a night, though rates vary. In July and August the rental fees can be several times more.

Under the rules of the new ordinance, a short-term rental's base rent is the one that was listed June 1, 2020. It can only increase annually by the inflation rate, generally about 2%. A short-term rental owner who didn't list the property in June because of the pandemic can go by the highest rent that will be charged in 2021.

Maine's Airbnb hosts earned $100 million from 534,000 guests in 2019, the last year for which figures from the country's largest short-term rental firm are available. That's up from a reported 430,000 bookings in 2018 that generated $67 million. There were 191,700 Airbnb guests in Cumberland County that year, and landlords in the county generated $30.2 million from rentals.

Short-term rental ordinance still in effect

The city's short-term rental ordinance that went into effect Jan. 1, 2018, is still in effect. It requires all short-term rentals to be registered. There's a $1,000 fine for providing false information on the registration form. 

Portland caps the number of units that are not owner-occupied at 400. Overall, there were 805 registered units on the mainland in 2019, the last year for which numbers were available. There are no limits on island rentals, where 113 units were registered in 2019.

The only mandate in the ordinance that doesn't apply to short-term rentals is the requirement for 90 days' notice for termination of lease. Application fees for short-term rentals also remain what they are under the city's 2018 short-term rental ordinance. Short-term rental annual fees range from $100 for one-unit in landlord-occupied buildings up to $2,000 for five units; they are doubled for buildings that aren't occupied by the owner.

Rules in the ordinance also hold that landlords can't discriminate against tenants, a tenant's rights document must be posted in the property, all tenants must sign the rights document and information requested by the Housing Safety Office must be supplied annually to renew the application to allow the rental.

Notification of the clarification is on the city council's Wednesday night agenda, but only for information purposes, it doesn't require action by the council. The city has updated its online FAQs about how the ordinance relates to short-term rentals.

Other requirements of rent control

Some properties are exempt from Portland's new rent-increase cap, and that applies to short-term rentals, too. Those are:

  • units in a landlord-occupied building that has fewer than five units;
  • units where rent is publicly controlled or subsidized (such as Section 8, GA, etc.);
  • accessory dwelling units;
  • units owned, operated or managed by municipal housing authorities (such as Portland Housing Authority);
  • accommodations in a hospital, convent, church, religious facility or extended care facility;
  • dormitories owned and operated by an institution of higher education or by Portland Public Schools.

City voters approved the rent control ordinance, 57% to 43% Nov. 3. Advocates said previous attempts to keep city rents in line didn't work, while opponents said the new law would keep landlords from upgrading apartments in the city's aging housing stock. Voters in November also rejected a referendum that would have put more restrictions on short-term rentals, with 53% voters against it. The referendum called for limiting short-term rentals to owner-occupied units, and restricting the number of units allowed to five.

The city expects the new process required for all landlords to be ready by next month. Landlords will be able to submit information to the city either online or by regular mail, and are subject to evaluation by the Rent Board created under the ordinance.

Landlords will be notified of the resources by mail by next month. Though applications were originally due Jan. 1, the city staff has waived late fees until April 1 because of the delay in getting the process started.

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