Commentary

Portland City Council chasing opportunity into oblivion

on

Recently, the Housing Committee of Portland’s City Council met to discuss the possibility of tightening the regulations surrounding rental agreements in the city that last fewer than 30 days. Referred to as “short-term rentals” (STRs), some might recognize this service as similar to one offered by AirBnB, an internet company that connects homeowners with vacationers looking for a place to stay for a duration of one night to one month.

Proponents of stricter rules claim that more housing stock devoted to short-term rentals in the city means fewer options for long-term tenants, raising rents and squeezing out lower-income folks. Self-proclaimed “Democratic Socialist” Joey Brunelle is running for an at-large seat on the council currently held by Nicholas Mavodones. He wants the city to implement a “One Person, One Listing” policy like that of San Francisco where residents cannot register more than one unit in their primary residence and cannot rent it for more than 90 days per year.

Since this January, short-term rental hosts have had to register their offerings with the city. Current rules allow a property owner to register up to five short-term rental units in buildings she owns, granted she pay fees escalating based on the number of units. Fees are higher for non-owner-occupied registrations, the number of which are capped at 300 on the mainland.  The islands are exempt from the overall cap.

At the most recent meeting, District 1 councilor Belinda Ray, who represents the East End neighborhood, indicated that she is considering restricting non-owner occupied rentals even further by defining only the building owner’s immediate residence as “owner occupied,” and other rooms or apartments in the same building as “non-owner occupied.” Mayor Ethan Strimling has floated the idea of increasing STR fees by 400 percent because of their “detrimental impact” on the city’s rental market.

The rules in Portland as they currently stand are less restrictive–but no less wrongheaded–than those under consideration in South Portland, where non-owner occupied short-term rentals would only be allowed in single-family homes located in commercial zones. Owner-occupied short-term rentals would only be allowed in SoPo’s residential zones and in buildings with four or fewer units. Further discussion was postponed following the submission of a petition with 67 pages of signatures to nullify the rules. The council could decide to send the question to the voters.

Fears of rising rents because of stagnant housing supply are fueling the impassioned pleas to tax STRs out of existence. Made by well-intentioned, but ill-informed activists yet again, arguments against allowing property owners to provide value to visitors without a middleman rely on a one-sided, cynical view of society. They view this issue as a way to take out their frustrations on a service they don’t understand and a constituency which has little organized effort protecting it.

In reality, all types of people are utilizing services like AirBnb. They are coming to Portland with or without a prior connection to the city.

For instance, future residents will use STR services to find a place to stay for a few weeks while they lock down their next apartment. Families of USM, SMCC, or UNE graduates might book a place on the peninsula to be closer to campus. Wedding parties might do the same to be able to walk downtown and avoid designating a sober driver.

Decentralized, app-based “gigs” are helping residents make ends meet on their own schedule. People living paycheck-to-paycheck, recent immigrants, or folks just looking to get ahead on their savings can all benefit from using their car or room to provide value to visitors and neighbors.


But, now that the Portland City Council knows how many of these short-term rentals exist, they see a juicy target. The city hired an outside firm to track all of the short-term rentals, cross-referencing the file of registered STRs with the listings on many platforms in order to cast broad generalizations about how these services affect the city’s housing market.

Using aggregate statistics to draw correlation from causation is a common tactic on the Left. But in this case, opponents of short-term rentals are using broad, shallow data to show that STRs account for 1-2 percent of the city’s housing stock. They expect us to believe this figure means anything.

The report gives AirBnB killers some cover by cherry-picking data. For instance, the highest concentration of short-term rentals on the mainland are within an area of the East End neighborhood “bounded by Washington Avenue, Congress Street, North Street and Walnut Street”. There, they found 39 registrations, or just 5.1 percent of housing units.

Attempts to squeeze out AirBnB show the Mayor and Council lack trust in their own citizens to utilize personal property for personal gain: the essence of entrepreneurship. This is akin to saying the roads are too crowded, so Uber drivers must register with the city and pay exorbitant, potentially ruinous fees to maintain their side gig.

Short term rentals can help landlords subsidize rent for long-term tenants. Not that all will do that, but to preempt such an arrangement seems counter-intuitive to the goals of the Housing Committee.

To frame this issue as greedy capitalists squeezing out poor tenants misses an important point. It assumes that a room used for short-term rental is removed from the supply of long-term rental housing. This ignores the multitude of options available to property owners besides renting.

More options for visitors (whose numbers only grow year-after-year) to stay comfortably in Portland mean they will patronize Portland’s restaurants, shops, and service providers instead of those in South Portland, Westbrook, the mid-coast, or Lewiston-Auburn area. Moreover, increased opportunities for people to make extra money means more power to control one’s destiny. There are folks hired by property owners to manage some short-term rentals.

For a city that styles itself as “progressive” and looking out for working people, this policy throws out those goals for the cynical tactics of division based on blame and envy.  

How can the self-proclaimed “Democratic Socialists” in town complain to the council about high rent and a lack of housing stock when they will stonewall new housing developments and demonize the very people attempting to increase the rental supply? Portland, Maine is not San Francisco.

They are talking out of both sides of their mouths, serving only to raise tensions with no solution to the issue. They would rather their perfect be the enemy of the good, because their sole solution is more taxpayer-subsidized public housing.

And if it’s not their solution, it is no solution at all.

 

About Nick Murray

Nick is the Development Associate at The Maine Heritage Policy Center working to plan events, engage with supporters, and spread the word about MHPC's work to new audiences around the state.

Recommended for you

Comments