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Updated: November 6, 2019

Towns, hospitality industry look to level short-term rental playing field

Photo / Maureen Milliken Hallowell is working on an ordinance that will better regulate short-term rentals in the city.

Bar Habor residents voted overwhelming Tuesday to amend its short-term vacation rental ordinance to allow those who own a home to rent out a portion of it.

In Hallowell, an ordinance proposed last month by a committee set up to study the short-term rental issue is making its way through city government.

Bar Harbor and Hallowell are two of many communities across Maine that are looking to ease the collision of the exploding short-term rental industry, decreasing workforce housing options and the desire of residents in many towns to earn money from rentals.

Online short-term rentals and the competition they present to the traditional lodging industry is one of the major topics of conversation Steve Hewins hears as he travels the state talking to members of HospitalityMaine. Hewins is president and CEO of the organization, which represents more than 1,000 members in the industry throughout Maine.

One thing those in both the hospitality industry and municipal government know is that the short-term rental issue isn't going away.

Hewins told those gathered for the association's annual summit this week has has nothing against short-term rental companies like Airbnb and Homeaway. "I've stayed at Airbnb, as I'm sure many here have," he said. But "the playing field is not quite level."

Nationally, the number of Airbnb and other online owner-based vacation rental listings has grown 850% percent since 2011, from 1 million to 8.5 million, Stacy Pobatschnig told a workshop session at the HospitalityMaine conference. Pobatschnig is director at Host Compliance, a business that works with communities to track short-term rentals.

In Maine, data shows nearly 20,000 listings in the state during October. The 1,250 in Portland alone are about half of what's offered in the summer, Pobatschnig said.

Both Hewins and Pobatschnig said those "level playing field" issues include the lack of licensing and that many of the rental operators don't pay state lodging tax, don't adhere to state and local lodging ordinances or safety codes, and lack onsite management.

South Portland voters a year ago passed a referendum upholding city council regulations that require the owner to live onsite, cap the maximum number of guests at six, and allow owners to rent their house out for up to two weeks if they're away. The ordinance also requires owners to register with the city. South Portland has since been working on enforcing the ordinance.

Other towns and cities including Portland, Rockland, Ogunquit and Freeport have enacted or are considering enacting ordinances that would take care of some of the issues Hewins and Pobatschnig cited.

Hallowell: A more level playing field

In Hallowell, the city says it hopes its draft ordinance will "promote a more level playing field, protect neighborhood character, discourage disruptive behavior promote safety for renters and ensure that things like parking are available."

Under Hallowell's proposed ordinance, there would be no zoning or licensing for owner-occupied short-term rentals.

"These are typically single-family homes with a room to rent," the ordinance says. "If meals are provided then it becomes a B & B and would be regulated as such."

Ones that are not owner-occupied would follow many of the same rules bed-and-breakfasts do, including city zoning.

The owners would have to get annual license required (the current innkeeper’s license is $100) and provide 24-hour contact information. The license could be revoked for a certain number of civil or criminal infractions in any 30-day period and could possibly be renewed by the city council after a certain amount of days, with conditions.

"This would be to protect against non-owner occupied STRs from becoming 'party houses,' if that's a concern," the ordinance draft says.

Bar Harbor: Income issue

In Bar Harbor, the town is tweaking an ordinance that has dealt with short-term rentals for more than a decade. 

Residents Tuesday voted to approve an amendment to the land use ordinance that will allow residents to rent out a room in their house, something many already do, but not legally. The vote was 628-175.

The town already prohibits rentals of less than five days, and in February strengthened regulations for registering a rental, including requiring yearly registration and upping the fee from $50 to $250.

On Wednesday night, a public hearing is being held on revamping the town's land use ordinance "dormitory provision," which allows businesses to provide housing for workers.

All of those changes are steps the town is taking to deal with the lack of availability of workforce housing in an area that draws more than 3 million visitors a year to Acadia National Park, and thousands of others who come to Mount Desert Island.

According to AirDNA, which tracks Airbnb and other vacation rentals, there are 1,428 Airbnb and Homeaway listings on Mount Desert Island, 90% of which are not owner-occupied. However, that number may be high, some officials said, since until Tuesday's vote, owner-occupied short-term rentals in Bar Harbor violated the ordinance.

At a public hearing in March, town residents spoke about the lack of quality long-term housing, as well as the need to rent to people who want to stay for fewer than five days.

But many also said that renting out space in their house is the only way they can afford it.

One woman at the hearing said she first tried advertising the house as a year-round rental.

“We had a hard time finding a high-quality year-round tenant,” she said. “It was either sell the house or do something quick, because we couldn’t afford our mortgage. We put it on Airbnb and it’s been the best thing that we could have possibly done.”

Positives and negatives

Hewins, at the HospitalityMaine summit, cited two similar Munjoy Hill properties in Portland as an example of the economic boost short-term rentals provide.

One has an apartment that generates $16,320 in rent a year based on the average rent for that size apartment in that area. A few blocks away, an apartment the same size listed on Airbnb generates a projected $46,144 a year, which he estimated based on its $217 a night rate and 58% occupancy for the year.

"The positive side is it's providing a lot of people with an income," he said. "The negative side is that it's removing housing" from the market.

In her talk, Pobatschnig said that short-term rentals can be an economic driver, bringing in people who spend money, and visit area restaurants and businesses. But she said, too, that the negatives of what's become the biggest growing sector of the $700 billion global lodging industrycan be difficult to manage.

She said there are things that are out of the control of towns and cities, including tracking short-term rentals, which means monitoring dozens of websites; listings come and go quickly; address and contact information is sometimes hidden; the vacation rental platforms refuse to share detailed user data and more.

She said municipalities also may have difficulty enforcing ordinances they put in place to govern the rentals.

The best ways to get short-term rental owners to voluntarily comply, Pobatschnig said, include:

  • get the word out through the local press; 
  • publish rules and registration steps on the town website and make the reason for them clear, "so people realize that complying is in their best interest";
  • conduct a registration workshop to help less-tech savvy hosts comply;
  • include information about registration requirements on property tax bills;
  • eliminate multiple points of contact — everything should be on one application processed by one department; and
  • provide a mobile, digital way for permit applicants to register and do business with the town.

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