Our Opinion: Apply lodging tax to all vacation rentals
Measure 26-194: YES
The world was a simpler place in 1971 when Portland adopted its "transient lodging tax." There were hotels and motels, and their owners or operators collected a tax from anyone who spent a night at their facilities.
Since the tax hit mostly out-of-town visitors, there have been few complaints.
The taxes, which brought $31.5 million to the city last year, have been used for basic city services.
Now, however, those visiting the Rose City can book a room or an entire house through Airbnb, VRBO, HomeAway or similar online services. That's great for travelers, but not the city, as a federal judge ruled last June that Portland's 45-year-old lodging tax couldn't be imposed on these companies because they are neither the owners nor operators of the units being rented.
Airbnb, in a deal with the city, agreed to collect the tax from its customers, but other companies did not.
So, the city is seeking a change to the 1971 charter language so it can collect taxes from companies that facilitate short-term lodging, even if they are not owners or operators.
The proposal drew opposition from HomeAway, which is currently offering dozens of rentals in Portland, from a $57 per night one-bedroom (shared bathroom) in Hayhurst to a $550 per night "private bungalow" in Waverly.
Those dollars add up, as does the lost tax revenue — to the tune of an estimated $300,000 to $500,000 a year for the city of Portland. Another issue is fairness: Short-term rental hosts don't have to pay the same taxes that hotels, motels and registered bed and breakfast inns must pay. The city would find it difficult to collect these taxes directly from the property owners, because many are ignoring city requirements for permits and basic safety inspections.
What's more, the opportunity presented by companies like Airbnb and HomeAway has prompted some property owners to convert long-term rental units into short-term vacation rentals, adding a bit more pressure to the local housing shortage.
That's why the city has begun using a portion of the lodging tax to fund affordable housing initiatives. And it's why HomeAway's effort to dodge the tax is particularly grating.
The Texas-based company offered to talk to us, but failed to return repeated calls. Its Voters Pamphlet statement, which uses a lot of bold type and capital letters, ignores the legal issue and instead claims that this is a power-grab by a city council trying to raise tax revenue without voter approval.
It's an odd complaint to make against a proposal that is going before voters.
Measure 26-194 would not change the transient lodging tax rate. The council already has that authority. It simply changes the charter to give the council, through an open process, the flexibility to ensure that all businesses engaged in short-term rentals are paying the same taxes.
This one is easy. Vote yes on Measure 26-194.