William Hessian saw it coming, but it didn’t make it any easier.

Over a two-year period, the 36-year-old social worker and artist watched his landlord convert the other two units in his apartment building in Portland’s Libbytown neighborhood into short-term rentals – a move that led to awkward interactions with strangers who would ring his doorbell or try to get into his apartment at odd hours.

When it came time to renew his lease in the Frederic Street building, Hessian said the landlord was not interested, even though he had been a good tenant. While moving out, he was confronted by a short-term guest who was upset about the noise. Hessian said he since discovered his former unit is now being listed on Airbnb.

And he thinks this type of conversion is more common than people may know.

“I hear that it’s happening a lot – at least that’s the feeling of so many people I know, especially the artists and the cooks and musicians,” he said. “I feel like they’re having to move every six months or a year, constantly.”

Concerns about the impact of short-term rentals on local housing markets and neighborhoods are common throughout the state and the country. And Portland is beginning to take a second look at its regulation of rentals that last less than 30 days.

Proponents argue that renting out a room, apartment or a single-family home through websites such as Airbnb and HomeAway help property owners and tenants make ends meet. But opponents are concerned that larger profit margins for short-term rentals lead to a loss of long-term rentals and a rise in year-round rental rates – especially in a tourist destination like Portland, which is already plagued by high rents and a shortage of affordable housing.

Portland only began regulating short-term rentals in January, but already policymakers are considering tightening the rules.

Portland’s re-evaluation of daily and weekly rentals comes as neighboring South Portland continues its own monthslong debate about the practice and may be headed to a citywide referendum on the issue.

Bradley Street resident Tom Sidar holds a lawn sign calling for an end to short-term rentals in residential zones. Similar signs recently adorned front yards on Bradley Street, which is between outer Congress and Prospect streets, until neighbors de-escalated tensions.

As of this month, property owners have registered more than 700 short-term rentals in Portland – a figure that exceeded expectations. The highest concentration of short-term rentals is on the islands and on the east and west ends of the peninsula, according to a Press Herald analysis of the city’s data. But every Portland neighborhood has at least some.

Mayor Ethan Strimling has proposed significant increases to registration fees – as much as 400 percent in some cases – citing their “detrimental impact” on the city’s housing supply. And members of the City Council’s Housing Committee may close a loophole that is undercounting the number of short-term rental properties that are not owner-occupied. While property owners who rent a room or apartment in their homes are generally more accepted, non-owner-occupied rentals are capped at 300 citywide and subject to higher fees to discourage the practice.

This second look at the short-term rental program is creating an opening for housing advocates to make their case that tighter restrictions are needed. Two candidates for City Council identifying themselves as Democratic Socialists – Joey Brunelle and Jonathan Torsch – are pledging to tighten regulations if elected.

“I’m definitely talking about it a lot,” said Brunelle. The East End resident is challenging longtime Councilor Nicholas Mavodones for an at-large seat and would like Maine’s largest city to adopt San Francisco’s rules, which permit people to register only one unit in their primary residence and only allow that unit to be rented for up to 90 days a year.

“My goal is to move us toward that regulatory scheme,” Brunelle said.

South Portland, by comparison, is proposing rules that are in some ways more similar to San Francisco’s than Portland’s because they would ban non-owner-occupied rentals in all residential zones. But South Portland continues to face intense opposition to the restrictions, and critics have submitted a petition to force the city to back down or hold a referendum.

The passion surrounding this issue boiled over at a recent Portland Housing Committee meeting on the topic, when resident Joshua Albert repeatedly interrupted a short-term rental host, MacKenzie Simpson, an attorney who described Airbnb as part of his family’s livelihood.

“That’s why the rent is so high,” Albert shouted from the audience during a public hearing. “People are homeless because of Airbnb in this city.”

“You’re very misinformed,” Simpson replied, as Albert continued.

After Albert said he would not stop interrupting the meeting, Chairwoman Jill Duson called a recess, so staff could summon police. Albert left the meeting before police arrived.

RESIDENTS CITE NUISANCE FACTOR

Short-term rentals are advertised on more than 25 platforms, according to Michael Russell, the city’s director of permitting and inspections. That makes it difficult to know exactly how many rentals are actually in the city. But the city has hired an outside company to better assess the market, cross-checking listings with units registered with the city.

Given the number of platforms, the city’s short-term rental registry provides the most comprehensive look to date at not only the number of short-term rentals but their locations. However, it does not contain information about whether a registered rental is for a spare bedroom in a family home or for an entire apartment that might otherwise be a year-round rental.

As of August, about 740 short-term rentals were registered in Portland, accounting for 1.1 percent of the city’s housing stock of 64,781 units. Because some of those may be a single bedroom, it’s unclear how many of the city’s 34,242 rental apartments and homes have been converted to short-term rentals.

The highest concentrations of registrations are on Great Diamond and Little Diamond islands, which have a combined 22 registrations, representing 28.6 percent of the total housing stock. That’s followed by Peaks Island with 88 registrations, or 9.2 percent of the island’s housing stock.

Munjoy Hill has the largest number of registered units of any mainland neighborhood with 128, or 2.7 percent of the neighborhood housing stock, followed by the West End with 124, or 2.1 percent of its housing.

But some residents think those numbers are just the tip of the iceberg.

“If that’s what’s registered, you can only imagine how many more there are as more people have discovered how lucrative renting out a spare room on Munjoy Hill can be,” said Jay Norris, president of the Munjoy Hill Neighborhood Organization.

The highest concentration on the mainland appears to be the area in the East End bounded by Washington Avenue, Congress Street, North Street and Walnut Street, according the Press Herald analysis. That area has 39 registrations, or 5.1 percent of the housing units.

Nobody needs to tell India Menninghaus that. She’s watched the number of short-term rentals skyrocket in the last two years, and says they have eroded the neighborhood feel and gobbled up scarce on-street parking spots. The trend also has affected the quiet enjoyment of her own apartment, she said, because she lives next to a building that has two four-bedroom apartments being rented out for bachelorette parties and family reunions. They are full most of the time and large crowds gathering outside are common, she said.

“It’s crazy when you look on the (Airbnb) site,” said the 30-year-old graphic designer, who works from home. “Every other building has a listing in it. It’s really changing the character of a neighborhood and I don’t think we want that in Portland.”

“There should be a limit,” she added.

Waterville Street resident Karen Snyder recently told the council’s Housing Committee that she lives between two buildings that are mostly short-term rentals. In addition to concerns about their impact on the overall housing shortage, Snyder said short-term guests often park their bikes on her property and enter her gardens.

“My private residence is being encroached on,” Snyder said. “We don’t want to complain. We just want to live in a residence without hotels around us.”

PORTLAND’S REGULATIONS

Portland’s rules allow a property owner to register up to five short-term rental units. Fees escalate based on the number of units being registered and are higher for non-owner-occupied registrations.

Units located in buildings where the owner does not live are capped at 300 citywide. Island properties are not included in that cap, because of their long history of seasonal rentals and the uniqueness of their housing stock.

A property owner living in a multi-unit building can register up to five units and have them all qualify as owner-occupied units. That’s an important distinction, since owner-occupied units are not capped citywide and cost less to register.

Those rules are less restrictive than those adopted in South Portland, where non-owner occupied short-term rentals would only be allowed in single-family homes located in commercial zones. And owner-occupied, or hosted, short-term rentals would only be allowed in residential zones and in buildings with four or fewer units.

Portland councilors are considering changing the way owner-occupied units are defined, a change that would make the city’s rules significantly tighter.

City Councilor Belinda Ray said at a recent Housing Committee meeting that she may like to see the rules changed so only the property owner’s primary residence counts as owner-occupied and other units in the same building would be classified non-owner-occupied.

Registrations of non-owner-occupied units are well below the 300 unit cap, with 152 registrations. However, if the rules were changed, that would likely result in a 39 percent increase in that type of registration, resulting in a total of 211 registrations. It would also generate more revenue for the city, though the exact amount is not known.

Mary Davis, the city’s housing and community development director, said staff is preparing an interim report to present to the Housing Committee in September. And the committee will likely vote on recommendations to the full council sometime in October.

‘AN EASY TARGET’

While housing advocates blame short-term rentals for high rents and scarce housing, hosts and supporters of the practice say that’s not the case. The vast majority of property owners in the city’s database – nearly 69 percent – are registering only one unit.

“We’re doing what we can to hold our heads above water,” said Ralph Baldwin, a member of Share Portland, a group that advocates for short-term rentals.

Ian Jacob has lived at the corner of Danforth and State streets in the West End for the last five years. And even though there are currently 30 short-term rentals in the area bordered by State, Gray and Clark streets, the 46-year-old designer said he hasn’t noticed any negative neighborhood impacts. Jacob thinks that short-term rentals are better than hotels, because more of the money stays in the local economy and can help people stay in their homes.

“I do hear from friends and acquaintances that rents are higher and there’s suspected loss of (long-term housing) inventory because of short-term rentals, but in my opinion that’s somewhat overstated,” said Jacob, who shares concerns about entire apartment buildings being emptied for short-term rentals. “I think sometimes short-term rentals are an easy target to blame for all of the ills in a neighborhood.”

For some property owners, short-term rentals are a way to keep their homes and their rents affordable.

Erna Koch, 63, lives in a three-family building she owns on Munjoy Hill. She runs one of the 10 short-term rental units registered on seven properties along a two-tenths-of-a-mile stretch of Vesper Street.

Koch said she rents out her primary residence in the summer and stays with a friend. The extra income helps her to keep her other two apartments more affordable to her long-term tenants.

“One of the ways I use that income is to sort of subsidize those rentals,” she said. “I haven’t had a rent increase in the last four years.”

But area residents worry that Koch is the exception and that more long-term housing will be lost to short-term rentals. Munjoy Hill resident Menninghaus said she has seen two four-bedroom units next door advertised for between $350 and $400 a night, and they’re always full.

“I think that it’s hard to imagine any of the short-term rentals turning back into long-term leases because of the economics of it,” she said. “They’re making more in a weekend than we pay collectively for our apartment in a month.”

Meanwhile, Hessian, who said he lost his apartment to the short-term rental trend, said he ended up sleeping on a friend’s floor for three months after he moved out. After saving his money, he was able to purchase a single-family home in the same neighborhood.

As a property owner, he could now host short-term rentals of his own. But Hessian laughs when asked about the possibility, and says he has not considered it.

 

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