Legal hoops ahead for property owners stuck in regulation limbo

Now that Airbnb has made Portland its operational headquarters, the Portland City Council is poised to make Airbnb’s service legal here.

More than 1,500 Portlanders have opened up their homes for short-term rentals arranged via the popular web-based service — but that’s technically been illegal under city regulations. At 2 p.m. Wednesday, the Portland City Council will host a public hearing and possibly vote on new regulations that could bring much — but not all — of Airbnb and similar services out of legal limbo here.

San Francisco’s Airbnb is a leading example of the “sharing economy,” where people rent rooms in their homes to travelers. Portlanders are big Airbnb hosts, and also heavy users when they hit the road and look for cheap, homey stays elsewhere.

Under the proposed new regulations, Portland residents will gain the right to rent one or two bedrooms of their primary home for less than 30 days at a time, if they get a city inspection and pay a $180 fee once every two years. The rules extend to those who rent or own houses, as well as owners or renters of duplexes and self-contained manufactured homes. But those living in apartments, condos and most manufactured home parks are not covered by the new regulations.

In the past, Portlanders renting out rooms under Airbnb should have met the city’s requirements for bed and breakfast operations, which include a $4,130 fee and lots more regulatory hoops. Few did so.

Under the proposed regulations, those renting three to five bedrooms still must meet the stiffer bed and breakfast rules.

After several months of vetting the new rules, city planners won the Portland Planning and Sustainability Commission’s approval in late-April, in an 8-1 vote. Commissioners noted they are big supporters of the sharing economy, and wanted to make it easier to support Airbnb and similar services here.

Several neighborhood leaders have raised objections to the new rules, concerned the rules will turn homes in their midst into businesses that might cause disruptions. Neighbors also are worried that homeowners need not be present when renting out their homes.

But city planners and planning and sustainability commissioners reasoned that Portlanders have the right to offer piano lessons or other occupations in their homes, and renting out a bedroom or two is comparable.

The proposed rules require an Airbnb host to notify neighbors on all sides of their property they plan to become hosts. However, they’d have a right to rent out one to two bedrooms, and complaints from neighbors could not prevent that if they operate under the rules.

City’s phase two

Steven Unger, owner of Lion and the Rose Victorian Bed & Breakfast in the Irvington neighborhood, generally favors bringing Airbnb out of legal limbo. Though he must meet stiffer rules and pay higher permit fees as a bed and breakfast operator, Unger realizes that won’t work for Airbnb.

“Really, nobody’s going to pay $4,200 to rent one or two rooms in their house,” he says.

However, Unger says there still are some holes in the city’s proposed regulations. Among other problems, the city will allow people to rent out bedrooms of their primary residence, defined as the place they live more than half the year. That means a “snow bird” who spends nearly six months each year living in Tucson could rent one or two bedrooms of his or her Portland home while he or she is out of the state.

“That is a big loophole,” Unger says. “It encourages abuse of the ordinance.”

Molly Turner, Airbnb director of civics, testified in favor of the new regulations. However, Airbnb wants the policy extended to apartment and condo residents, and it opposes the inspection requirements.

“We care deeply about safety and share the city’s interests in protecting residents and visitors alike,” Turner testified before the Planning and Sustainability Commission. “However, we feel that inspections of residents’ bedrooms are unnecessary and unfair.”

The city Bureau of Development Services would expect to do simple inspections, making sure the dwellings have inter-connected smoke detectors, and that bedrooms meet building codes existing at the time a house was constructed, says Sandra Wood, supervising planner for the Portland Bureau of Planning and Sustainability.

Unger says inspections are important to avoid some of the “horror stories” that have emerged in other markets, where people used Airbnb

locales to sell drugs or host prostitution.

Unger wants the City Council to require that hosts post their license number in ads, much as construction contractors do.

Wood says that’s a fine idea, but it doesn’t fall within the land-use realm where the Bureau of Planning and Sustainability operates.

Unger suggests the bureau needs to do a “phase two,” and address some unresolved issues. Among those are people who rent out their entire house under Airbnb. Under current law, those people may fall under rules for hotels, but in reality, many aren’t fulfilling those


Wood says the bureau isn’t planning on doing another round of regulations for Airbnb and similar systems, as it needs to spend its time on other, more-pressing issues.

As a result, it’s likely that many people using Airbnb will continue to flout city rules, such as those renting rooms in apartments and condos or those renting more than two bedrooms.

Airbnb in Portland

Airbnb commissioned a study of its Portland operations over the last year, and found:

There were 1,120 local hosts

• There were 48,040 local guests

• 33,000 Portlanders used Airbnb to stay elsewhere while traveling

• 45 percent of local hosts are self-employed, freelancers or part-time workers

• 84 percent of local hosts rent out their primary residence

• 40 percent of local hosts have total incomes below $50,900/year (Portland’s median household income)

• Hosts earn an average $6,860 a year through Airbnb

• Hosts rent out their places an average of 86 nights a year

• 43 percent of renters were first-time Portland visitors

• Visitors spent an average of $815 while here, and stayed an average of 3.9 nights

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