SOUTH PORTLAND — There’s been a lot of talk lately about potential lawsuits between the city and short-term rental operators who will be put out of business by new restrictions that were approved by voters in November.

Exactly who might file the first claim remains to be seen.

As city officials prepare to enforce the contentious regulations starting Jan. 1, some operators still appeared to be offering whole-house stays in the coming year that would violate a ban on unhosted, or non-owner-occupied, short-term rentals in residential districts.

On the Airbnb website Monday, about 50 “entire place” rentals were available for booking in the coming year, concentrated in residential waterfront neighborhoods such as Ferry Village, Willard Beach and Pleasantdale, just over the Casco Bay Bridge from Portland’s popular Old Port district.

One theory is that operators who have been renting out whole houses or apartments that will become illegal under the ban are continuing to take reservations in 2019 so they can show lost income and other damages if they challenge the new rules in court.

“That’s the rumor,” said Joshua Reny, assistant city manager. “We have no confirmation of that.”

Reny declined to say whether city officials are prepared to file a lawsuit against any operators who might be found noncompliant by the code enforcement officer. Any decision to go to court over the short-term rental regulations would rest with the City Council.

“We are fully prepared to enforce the ordinances,” Reny said.

HELP FROM HOST COMPLIANCE

The council last week approved a $19,500 contract with Host Compliance of Seattle, an online service provider that will help the city identify and monitor short-term rentals and bring scofflaws into compliance. An additional $3,477 will cover an automated compliance notification and mailing service.

Host Compliance made the second-highest offer in competitive bidding, after a $28,500 bid (plus $3,500 for a complaint call center) from STR Helper of Garden City, Utah. The council set aside $20,000 for a monitoring service in the fiscal 2019 budget that started July 1, and identified $15,000 in anticipated revenue from licensing fees.

Host Compliance has been working with city officials since 2016 to quantify the number and impact of short-term rentals on the city’s residential neighborhoods. In its contract proposal, the firm reported there were 182 total listings in South Portland in October 2016, which increased 51 percent to 275 listings in October 2017. That number increased 19 percent to 327 listings in October 2018, even as controversy swirled around the issue.

“(Host Compliance has) a pretty slick system,” Reny said. “It’s going to be interesting to see what our rates of compliance are.”

John Murphy, a leader of short-term rental operators who opposed the regulations, said he was unaware of any organized effort to file a lawsuit against the city or to otherwise fight the ordinances once they go into effect.

“I’m just waiting for the city to make some kind of an announcement about where to go to register and pay fees,” said Murphy, who operates a short-term rental in an apartment in his house on Willard Beach.

There’s a link on the city’s homepage to a 10-page short-term rental registration application packet, which contains information and forms needed to operate legally after Dec. 31. Licenses cost $200 for hosted rentals and $400 for unhosted rentals, plus a $100 fire safety inspection fee and a $20 processing fee. Fines for violations range from $500 to $1,500 per day, which would be recovered by the city filing a lawsuit.

VOTER-APPROVED ORDINANCES

In November, city residents voted 6,375 to 5,378 in favor of the zoning and licensing ordinances that the council approved in July to regulate home rentals promoted on websites such as Airbnb and HomeAway. Supporters said the rules would stop homes from being converted into mini hotels, while opponents said they infringed on property rights.

A relaxed version of ordinances that were initially passed in February, the regulations ban unhosted short-term rentals of less than 30 days in residential zones. Hosted short-term rentals – where the owner lives on the premises – will be allowed in residential areas under certain conditions.

Under the new rules, all short-term rentals must be inspected, insured and licensed by the city.

The referendum capped a yearlong struggle over short-term rentals, an issue that is causing similar disputes in communities across the nation, including neighboring Portland, where the City Council last month amended short-term rental rules approved last year to address the trend of renting private homes and apartments through services like Airbnb.

Also last month, Boston delayed implementing aspects of new short-term rental regulations set to take effect Jan. 1 while it contends with a federal lawsuit by Airbnb, The Boston Globe reported. The city agreed to delay fines and data-sharing rules – but still require about 6,300 Airbnb listings in Boston to register – while a judge considers the company’s request for an injunction.

Boston’s rules are among the most stringent in the country, barring investors and renters from renting out their homes by the night and requiring listing websites to share data with the city or face fines of $300 per night for each illegal listing.

MODIFIED RULES FOR RENTALS

Airbnb spokeswoman Liz DeBold Fusco declined to say Monday what role, if any, her company might take in helping operators comply or fight South Portland’s ordinances.

“(We) are certainly disappointed in the outcome of (the) referendum,” Fusco said in a written statement. “We are proud of our local host community for advocating (for) their rights and bringing this matter to a vote and we hope that the council will hear them and still commit to work with them to find a more reasonable path forward for short-term rentals in South Portland.”

Under the modified regulations, hosted short-term rentals are allowed two adult guests per bedroom, with a maximum of six guests per house. The original ordinance capped the total number of guests at two adults.

Owners of two- or three-unit buildings in residential zones may operate one unit as a short-term rental, as long as they live in one of the other units; owners of four-unit buildings may operate two apartments as short-term rentals if they live on the premises.

The council also dropped an initial ban on homeowners renting out their houses while on vacation. Owners of detached single-family homes could rent their houses for up to 14 days per year when they are away.

Kelley Bouchard can be contacted at 791-6328 or at:

[email protected]

Twitter: KelleyBouchard

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