When a tenant moved out of her first-floor apartment on Munjoy Hill, Sarah Braun saw an opportunity to fix up her building and secure a future home for her 83-year-old mother.

The 53-year-old social worker took out a $15,000 line of credit to add safety features like fire doors and hardwired smoke detectors, as well as make some cosmetic upgrades. Braun thought she’d be able to recoup those costs by renting the unit for days or weeks at a time through websites like Airbnb and HomeAway, until her mom was ready to move in.

But she and others are running up against a tide that’s turning against short-term rentals in residential areas, from neighbors who don’t want to be living amid mini-hotels and from critics who say these operations are driving up the price of housing and creating apartment shortages.

When Braun went into City Hall on Monday to formally register her new short-term rental, She was told the city would not be processing any more applications because the City Council was on the verge of tightening limits by changing how some units are classified. The changes could effectively close the door to new short-term rentals of homes or apartments that are not occupied by the owner, and they would cover anyone who applied after the proposal was first floated last Thursday.

“I would have done it last Wednesday,” said Braun, who said she was caught off-guard by the proposal. “This is a three-day difference that’s affecting my retirement and quality of life. That’s a big deal.”

Braun is one of 15 applicants who came forward to register 21 new short-term rentals in the first two days after the council’s Housing Committee met to discuss new limits on such rentals because of concerns about the faster-than-expected growth of the practice.

REQUESTS PUT ON HOLD

Councilors signaled an interest in enacting a six-month moratorium on non-owner-occupied short-term rentals, but city staff instead proposed an ordinance change with a retroactive date of Oct. 12, the day after the meeting.

Linda Campbell said her husband went to City Hall first thing Friday morning to register two units in their West End apartment building. They were also told the process had been put on hold.

Campbell said her husband is getting ready to retire and they bought the four-unit building at 12 Walker St. as part of their downsizing process. They live in one of the units and would like to convert the others to short-term rentals within the next couple of years as long-term tenants move out. One of the units is undergoing a $20,000 renovation, which along with the mortgage was going to be financed through the short-term rental income.

They already have city permits to rent two of their four units on a short-term basis, and had hoped to register at least one more this year after their long-term tenant moved out. Registering all four would provide more flexibility about which unit they occupy, although they plan to remain on site, they said. Losing the ability to make the additional conversions throws the plan into question, she said.

“We’re watching our dream sort of evaporate in front of us,” Campbell said.

Portland Licensing and Registration Coordinator Jessica Hanscombe said Tuesday that her office was told to hold applications that could be affected by the ordinance change until the council votes next month.

Like communities across Maine and the United States, Portland has been struggling to figure out how the sharing economy, including short-term home rentals, fits into the city’s landscape.

On one hand, short-term rentals offer visitors a more intimate and less expensive lodging option, while allowing property owners to generate income. Critics however argue that the short-term rentals lead to a loss of year-round housing and push up rent prices and property values, making the city less affordable. Some people also just don’t like living next door to short-term rentals because the constant turnover changes the character of a neighborhood.

Much of the regulatory efforts around the country focus on non-owner-occupied rentals, which can include the practice of buying up entire buildings to convert them into lucrative short-term rentals. Just across the river, South Portland is holding a citywide vote Nov. 6 on whether to ban “unhosted” short-term rentals in residential areas, among other rules.

‘HITTING THE PAUSE BUTTON’

Portland began regulating short-term rentals in January. Mindful of the potential impact on the long-term housing market, councilors set a 300-unit cap on the number of non-owner-occupied units on the mainland.

When the program was implemented, however, staff allowed property owners living in a building to register other apartments in the same building as owner-occupied, and therefore not count them toward the limit of 300 citywide.

Under that definition there are 125 non-owner-occupied units registered in the city. But, if the count includes individual non-owner-occupied apartments, there are as many as 320 – more than the 300-unit cap, according to a memo from Michael Russell, the city’s director of permitting and inspections.

City Councilor Kimberly Cook has teamed up with Mayor Ethan Strimling to tighten up the ordinance and change the way non-owner-occupied units are defined. She supports having the proposed changes be retroactive to Oct. 12, so the city can stop registering new units and stay close to the 300-unit cap, which is about 1 percent of the city’s housing units.

“To me the council did a really good job at looking at that information and picking a number that had a rational basis. It’s important to me that we stick to that number,” Cook said Tuesday. “That would mean hitting the pause button on new non-owner-occupied rentals.”

Although the Housing Committee has been discussing short-term rentals since the summer, the ordinance change to redefine non-owner-occupied units was endorsed by the committee Thursday and quickly added to the agenda for Monday’s City Council meeting for an initial review. It clearly caught many people off-guard.

Only a few people spoke on an issue that usually draws dozens. Ralph Baldwin, of the advocacy group Share Portland, questioned why the city was hurrying to change the existing ordinance now when it is already scheduled to conduct a full review after it has been in place for one year.

“Suddenly, we and the council are asked to abandon the work of three years and panic to make drastic changes,” Baldwin said. “We should slow down. We made a good ordinance together. It will need tweaking, but it doesn’t need radical rethinking.”

The council is set to vote on the proposal Nov. 19.

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

[email protected]

Twitter: randybillings

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