Four days after Gov. Paul LePage’s administration said it wants to deregulate the lodging industry — a pronouncement that surprised innkeepers and other business owners — it hasn’t clarified its intentions.

LePage spokeswoman Holly Lusk informally introduced the idea of deregulation during a legislative public hearing Monday for L.D. 436, a bill that would require innkeeper licensing and inspections for Maine residents who rent out spare rooms or entire homes for short periods.

Lodging industry representatives argued that short-term rentals are so similar in purpose to hotels, inns and bed-and-breakfasts that they should be subject to the same regulations. Vacation rental owners and Mainers who list rooms or homes on short-term rental websites such as Airbnb said applying state Department of Health and Human Services standards to short-term residential lodging would effectively destroy a vital component of the state’s tourism industry.

Lusk said LePage is looking into another option: Promoting fair competition between permanent lodging places and short-term vacation rentals by regulating neither.

That would mean dispensing with periodic health and safety inspections, as well as the actual licensing, she said.

Greg Dugal, president and CEO of the Maine Innkeepers Association, was surprised by the announcement, but said he was not prepared to dismiss the idea out of hand without knowing the details.

“It’s a new idea – I’d not heard it before,” he said. “There were no specifics given to me.”

DHHS spokesman David Sorensen said details of the deregulation plan have not yet been worked out.

“There’s not much to say about this idea, as it’s in its very early stages right now,” he said Wednesday via email. When asked again Friday afternoon, he said no further details were available.

Dugal said deregulation was not something for which his organization has been lobbying.

“As far as I know, nobody has asked for that,” Dugal said. “Currently the industry is lobbying for more licensure.”

He said an impromptu poll of innkeepers present at Monday’s Legislative hearing found a roughly even split between those for and against deregulation.

The innkeeper’s association is the primary lobbying force behind L.D. 436, citing consumer safety as one of the primary reasons why short-term residential lodging should be more heavily regulated. LePage’s proposal would push things in the opposite direction.

A side benefit of deregulation is that it would free up more state inspectors to focus on restaurants, Lusk said at Monday’s hearing. The Maine Center for Disease Control has fallen far behind on restaurant inspections, and some lawmakers are seeking funding for up to 20 more personnel.

“We are lacking a number of inspectors for restaurants,” Lusk said.

Audrey Miller, a vacation property manager and founder of the trade group Vacation Rental Professionals of Maine, said that if done correctly, deregulation could be a great way to level the competitive landscape for lodging places and short-term home rentals.

“I think that finally we have some common sense coming into play here, and I’m all for it,” she said.

Any plan to deregulate the lodging industry in Maine would face hurdles at both state and local levels, Dugal said, adding that he does not expect a deregulation bill to be introduced during the current legislative session.

“They can propose whatever they want, but they still have to get the Legislature to pass it,” he said.

Even if deregulation were to be approved at the state level, municipalities would retain the right to impose their own rules on lodging places, as they do with restaurants, Portland spokeswoman Jessica Grondin said.

“Should (the Portland City) Council become concerned that state regs were too lax, they could consider adopting their own regulations as they have adopted more stringent regulations (regarding) food safety,” Grondin said via email.

Dugal said it is difficult to envision Maine’s lodging industry becoming completely deregulated, adding that certain regulations such as adherence to the National Fire Protection Association’s Life Safety Code would not likely go away.

“I don’t know how that could happen, honestly,” he said.


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