Rooms Rentals & Shares

Portland, Oregon Worries About the Over-Sharing Vacation Rental Economy

Jul 23, 2014 6:30 am

Skift Take

It’s one thing to make widespread vacation rentals legal. It’a another to make it fit into the fabric of a city without repercussions.

— Jason Clampet

Free Report: The Changing Business of Extended-Stay Hotels


Trying to keep Portland residents from renting out their spare bedrooms to tourists via the Internet is as futile as forbidding them from selling old gear on Craigslist.

They’re doing it, they like the extra cash, and there’s no going back.

But Mayor Charlie Hales and the Portland City Council should be cautious about endorsing short-term rental practices that let apartments function as hotels — or that let residential neighborhoods devolve into quasi-commercial zones. A city that goes into full swoon over the magic of the “sharing economy” might face some of the unintended consequences of oversharing.

On July 23, the City Council is expected to approve short-term rentals in private homes, a practice facilitated by peer-to-peer online sites such as Airbnb, a San Francisco-based company that operates worldwide and is adding customer-service jobs in Portland. These rentals tend to be illegal under city code, but many hundreds of Portlanders do it anyway, using their homes, apartments or condominiums to rake in some extra cash.

Want a South Tabor mini-cottage? That’s $70 per night, according to Airbnb’s Web site last week. How about an Authentic Alberta Arts Abode? That will set you back $99 per night. Portlanders advertise private rooms, basement suites and whole apartments, often touting Portlandia-style amenities such as bicycles, coffee, transit access and general urban fabulousness.

If the council votes as expected, Portland would be among the nation’s first cities to deliberately adopt Airbnb-friendly regulations. In fact, Airbnb is already collecting lodging taxes from its Portland-based transactions in anticipation of the city’s blessing; the company is also in the middle of a massive lobbying and rebranding effort to win favor elsewhere. Hales, an Airbnb supporter, argues that it’s better for cities to deal with the reality of the sharing economy than ignore it and let it continue unregulated.

“The Internet is changing everything in ways that we weren’t necessarily ready for or aren’t even necessarily happy about,” Hales told The Oregonian editorial board last week. “We ought to figure out how to run apace with this rapid change when we can.”

Overall, Portland’s proposed zoning changes strike a fair balance between individual property rights and neighborhood concerns. The city would allow residents of homes or duplexes to rent out one or two bedrooms to overnight guests. The city’s regulatory hand would be fairly light, requiring just a $180 permit and an initial inspection, along with some minor red tape for permit renewal. This approach seems appropriate: Generally speaking, when someone in Portland wants to work out of a home office, rent a spare room, or otherwise engage in a low-profile business, that individual choice has little impact on the community and should be allowed to flourish.

However, the city has also incorporated a few modest safeguards to protect livability. For one thing, residents couldn’t live elsewhere while renting out their entire houses year-round to tourists and other short-timers: They would need to live onsite for at least nine months out of the year.

And notably, the City Council hasn’t decided whether to legalize short-term rentals in apartments or condominiums, despite heavy lobbying from Airbnb supporters with lots of loaded language about equal access to the sharing economy. Commissioners have put off that decision until fall, concluding they need more time to weigh the potential impact on affordable housing and the rental market.

Their caution is warranted. Though apartments and condominiums are ideal candidates for peer-to-peer rentals, the potential for negative community impact is greater. For example, Portland landlords could drop their longer-term tenants with one-year leases and turn their fourplex or 20-plex into a quasi-hotel. This would squeeze the rental market further, undermine the city’s workforce-housing goals and hand over to tourists the living space that was zoned and intended for Portlanders.

As the cost of living rises and urban density grows, it’s only natural that many Portland residents and property owners would try to monetize that increasingly precious commodity of square footage. This burst of entrepreneurism evident on Airbnb is both inevitable and admirable.

But it would be absurdly short-sighted for Portland, celebrated for its smart urban planning and neighborhood livability, to gouge its own zoning laws by accidentally turning the whole city into a rooms-for-rent zone. Hales and the Portland City Council can avoid this mistake, but only by doing more public vetting and framing the question in a more responsible, less faddish way.

Not, “Should we endorse the sharing economy?”

But, “Where, exactly, should Portland allow a lot of little hotel rooms?”

- -The Oregonian editorial board

Portland Mayor Charlie Hales on Airbnb

Mayor Charlie Hales talked with The Oregonian editorial board last week about the city’s role in allowing peer-to-peer rentals such as those facilitated by Airbnb, an online business that is becoming the Craigslist of the short-term rental market. Here are excerpts from his remarks, which are also available via video:

“We’re not talking about a city ordinance to regulate short-term rentals. We’re talking about our zoning code. The zoning code says what you can and cannot do on your property. It doesn’t mean you’re going to do it; it doesn’t mean your landlord is going to let you do it. The question that arises for us is, should we allow it?”

“We have this conversation to have with the multifamily industry and with the homeowners associations about whether they want us to include them or not, and we’ll complete that conversation over the next couple months before we act on the new zoning code and provisions.”

“This is a thicket. Remember why we have zoning in the first place. … If I live in a single-family neighborhood, I have a reasonable right to expect that I live in a single-family neighborhood, and that there’s not, you know, the next block or the next lot is not going to become a commercial use. And yet, this has already caused an erosion of that simple idea. It has caused it, again, without the city being involved at all.”

“This is happening, there are 1,500 of those (short-term rentals listed on Airbnb) already in the city. We better figure it out in our zoning code. And ready or not, here comes the future.”

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