Maine’s largest city is considering a significant increase in the fees charged to property owners who offer short-term rentals through services such as Airbnb.

Portland Mayor Ethan Strimling says, “We simply aren’t charging enough in relation to the impact that the short-term rentals are having on the rental market.”

Portland Mayor Ethan Strimling’s proposal would raise registration fees by as much as 400 percent in some cases over the current schedule. The proposal, first unveiled during the city’s budget discussion, would raise an estimated $250,000 for a city fund to subsidize affordable housing in Portland, he said.

“From my perspective, we simply aren’t charging enough in relation to the impact that the short-term rentals are having on the rental market,” Strimling said. “It’s really having a detrimental impact.”

The mayor’s proposal could reopen the debate about regulating short-term rentals in Portland – an issue that many communities in Maine and elsewhere in the United States are grappling with, in part because of the perceived impact on long-term rental markets.

Critics argue that short-term rentals remove affordable housing from the market and drive up rents. Proponents say the impact is overstated and that many hosts are simply trying to make ends meet and are not making large profits.

Members of Share Portland, a group of short-term rental hosts and advocates, urged caution, however. They would like to see structural changes to the city’s short-term regulations, including who pays the registration fee.

“It’s easy to look at it as a monolithic presence that is taking over neighborhoods or changing the affordability of our neighborhoods, but most of that comes from somewhere else,” said member Ralph Baldwin, pointing to larger economic factors. “We’re doing what we can to hold our heads above water.”

The City Council’s Housing Committee will hold a public hearing and possibly vote on the proposal Tuesday. Chairwoman Jill Duson did not return a call seeking comment, but Councilor Kimberly Cook, who serves on the committee, said a vote Tuesday is unlikely.

“I’m looking forward to undertaking a thorough review of the short-term rental program and policy,” said Cook, who noted that she was open to fee increases if needed. “I’m looking forward to hopefully hearing a lot of details from our staff about the implementation and compliance rates.”

Portland moved to regulate short-term rentals – those for less than 30 days – in 2017. It sought to discourage people from commercializing the city’s housing stock by capping the number of non-owner-occupied short-term rentals at 300 and setting an escalating fee schedule based on the number of short-term rentals being registered.

Strimling’s proposal would hit owner-occupied, multi-unit buildings – and short-term rentals on Portland’s islands – the hardest. Fees for those would increase from $100 to $500 for the first unit; $250 to $1,000 for the second; $500 to $2,000 for the third; $1,000 to $3,000 for the fourth; and $2,000 to $5,000 for the fifth.

Fees for non-owner-occupied, multi-unit buildings would increase from $200 to $500 for the first unit; $500 to $1,000 for the second; $1,000 to $2,000 for the third; $2,000 to $3,000 for the fourth; and $4,000 to $5,000 for the fifth.

And fees for an owner-occupied single-family home, or tenant-occupied unit, would increase from $100 to $500 under the mayor’s proposal.

According to a report compiled for the council’s Housing Committee, 729 units on 605 properties were registered as short-term rentals in the fiscal year ending July 1. That generated $91,782, a figure that does not include a $33,139 contribution to the city’s housing trust fund.

The city has nearly 17,775 long-term rental units registered at 4,376 properties.

The city expected $60,000 in revenue from the program, but took in nearly $125,000, said Michael Russell, director of the city’s permitting and inspections department.

Strimling estimated that the additional revenue, which would go into the city’s housing trust fund, could leverage $2.5 million in private investment and produce “hundreds” of affordable housing units. And only half – 151 units on 110 properties – of the 300 non-owner-occupied units have been registered.

But short-term rental hosts are urging caution.

Share Portland member Ken Thomas said the group has not yet taken a position on the fee increases. However, the group would like to see other changes in the program before fee hikes are considered. And they would like to maintain a low fee for a single unit, so people who are struggling financially are not boxed out of the market.

For example, they would like hosts, rather than property owners, to be responsible for registering units. They are concerned that large property-management companies can easily come into the city and lease individual units from landlords for short-term rentals.

Under the current rules, those companies would be paying the lower fees, rather than the escalating fees meant to discourage that practice, because the landlord would be registering the unit.

The group also would like the city to hire a liaison for the short-term rental program to ensure the city has solid information about the number of units being used as short-term rentals and the true impact on affordable housing.

The city hired a third party, Host Compliance, to monitor the city’s short-term rental market last year.

“Before that is taken care of, any increase in our fees would be totally unfair,” Thomas said.

Randy Billings can be contacted at 791-6346 or at:

[email protected]

Twitter: randybillings

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