No Vacancy

Groups Seek Better Regulation of Short Term Rentals

Steve Unger, owner of the Lion and the Rose Victorian Guest House in Portland, just wants a level playing field. We’re not talking the gridiron this afternoon. The topic is short term rentals (STRs) and their impact on everything from affordable housing to occupancy rates. In his spare time, Unger moonlights as Editor of “The Airbnb Analyst” website, whose mission is to provide information to help cities appropriately regulate Airbnb. He has firsthand experience with the negative influence of short term rentals on his Irvington neighborhood lodging operation. “In general for 2016, our room nights were down about 15 percent,” sighs Unger. He attributes the decline, at least partly, to competition from those he claims don’t play by the same rules that he is required to follow. His profits aren’t the only thing suffering from the proliferation of under-regulated STRs in Oregon. “One of the people who is working for us now is living in a dining room because they can’t find affordable housing nearby.”

The serious challenges that short term rentals pose for lodging operators like Unger are not limited to the Northwest. “The hotel industry embraces and thrives in a highly competitive and innovative business model where everyone plays by the same rules,” states Troy Flanagan, vice president, State & Local Government Affairs at the American Hotel & Lodging Association. “Yet, from coast to coast, we have seen an uptick of short term rental companies, such as Airbnb and HomeAway, fostering the rise of unregulated commercial activity.”

“Although home-sharing has been around for decades, and the hotel industry supports the rights of property owners to occasionally rent their homes to earn extra income, we have seen that the real face of these companies is not occasional short term renters, but commercial operators running multi-unit, full-time lodging businesses.”

“Indeed, the hotel industry has set the standard of how to provide high-quality guest services while fulfilling its tax, health, safety, and security obligations at the local, state and federal levels. Companies who are operating like rogue hotels should be held to the same standards. Consumers, homeowners, and communities are counting on us to get it right.”

Meeting those expectations starts with obtaining a proper permit. “Just as an example, there are about 2,500 Airbnb properties in the Portland area, and little more than 700 of those are permitted,” according to Greg Astley, director of government affairs at the Oregon Restaurant & Lodging Association (ORLA). “So you’ve got almost three quarters of those properties who are completely disregarding the law that says you have to go to the city, get a permit, and operate lawfully within the city limits,” he calculates. “That should be 100 percent compliance, and it’s not. But the city of Portland doesn’t have the resources to go after those owners. That is a problem,” but it’s far from the only rule-bending that is going on.

“The commercial activity of short term rental companies enables violations of safety and security regulations that apply to hotels and bed & breakfasts, thus exposing guests to potential danger,” warns Flanagan. “Guests – particularly those with disabilities or requesting certain accommodations – have no way of verifying whether these properties are compliant with basic health and safety standards, like smoke and carbon monoxide detectors, fire escapes and wheelchair ramps.”

Although Mike Daley claims that he is no expert when it comes to STRs, the ORLA Education Foundation Board Member is no stranger to one of the hottest topics in the industry. “My impression is it’s a bit like the wild west,” shares Daley, general manager at the Sheraton Portland Airport. “You don’t know if the person’s fire alarm system is going to work. All the regulations are put in place to protect the consumer. With the absence of those regulations and any oversight, it puts the consumer at risk. If it’s a business, and you stay in a hotel, you have a comfort level of certain things that you know the governmental bodies are ensuring are in place as part the regulatory process.”

Ironically, many of Oregon’s smallest destinations already are the most sophisticated when it comes to overseeing STRs. “Short term rentals are traditionally regulated by the municipal ordinance, so each city has their own ordinance,” explains Unger. “In particular, entire-place rentals, which are like vacation rentals where there’s no resident host, have been heavily regulated in Oregon in the resort towns on the coast. You go to Cannon Beach, you go to Lincoln City, you go to Seaside, and you ask to see their short term rental ordinance, and they have one. They’ve dealt with these for years.” 

“What’s new is urban vacation rentals. They didn’t exist. So, you go to Portland, you go to Salem, you go to Beaverton, you go to Eugene, and all at once these guys have to look at the impact of entire-place short term rentals or vacation rentals on their neighborhoods, their housing availability and their housing prices.” He adds that STRs can even drain cities’ most valuable resource: “Paris, France believes they have lost population because of Airbnb; not just housing − population. You just go, ‘Oh my gosh!’ continue →

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