SOUTH PORTLAND — The City Council gave final approval Tuesday to sweeping regulations of home rentals offered on websites such as Airbnb and HomeAway that will ban unhosted stays in residential neighborhoods.
Short-term rental operators who don’t live on the premises will have a grace period before the city moves to shut them down in September.
Councilors acknowledged that some short-term rental operators will be unhappy and may lose money, but the majority said they voted to preserve housing and residential neighborhoods in the face of a deep community division.
“I believe the council has struck the right balance,” said Councilor Claude Morgan, whose waterfront district has many short-term rentals.
“Tonight we have the opportunity to hit the reset button and restore residential neighborhoods,” he said.
The vote was 6-1, with Councilor Adrian Dowling opposed. Dowling said he believed the council should have established a committee to develop regulations.
City officials hope to stop people from buying, renovating and renting out entire homes to transient guests in a community that’s trying to increase affordable housing and preserve residential neighborhoods.
South Portland is one of the latest U.S. cities to wrestle with this issue, along with neighboring Portland. South Portland’s outright ban of non-owner-occupied rentals is the most restrictive so far in greater Portland.
Cape Elizabeth adopted a permitting process in 2012 that allows the town to revoke the permit if the property is the subject of three complaints within three years. Portland passed a more involved registration process last April that sets a cap on the number of non-owner-occupied rentals citywide at 300.
Some other U.S. cities, including New York, have also banned or severely restricted such rentals of units that are not owner-occupied, although the crackdowns have proven difficult to enforce. A recently released study by McGill University researchers concluded most short-term rentals in New York are illegal and that the practice has fueled a housing shortage and rent increases.
There are 282 short-term rentals in South Portland, according to a recent count by Host Compliance, a third-party web service. About 200 of them are single-family homes that are not owner-occupied, allowing travelers to rent a whole house or apartment for a few days or a few weeks.
Before voting Tuesday, the council held a sixth dedicated public hearing on the issue. Concerns among the 20 people who spoke remained largely the same and evenly divided.
Several people spoke in favor of the regulations, again thanking the council for taking a stand against the “never-ending onslaught” of short-term rentals and pointing out problems associated with operating businesses in residential neighborhoods.
Several spoke against the regulations, again pointing out the impact of lost commercial revenue, questioning why the council didn’t establish a committee to develop a different set of rules and suggesting the issue should go to referendum.
A gofundme.com campaign to fight the regulations has raised $7,500 toward a $25,000 goal. It was started by Margaret Birlem, who lives in Cape Elizabeth and operates a short-term rental in South Portland.
The new ordinance will allow owner-occupied or “hosted home stays” throughout the city, but it will ban from all residential zones any “non-hosted home stays” that don’t have an owner on the premises.
Legal rentals will have to register by April 15 and operate under the new ordinance starting June 1.
Operators who don’t meet the letter of the law will be allowed to honor reservations made by Feb. 6 for home stays through Sept. 15. They will have to swear an oath and sign an affidavit they have a contract for a stay, not simply a booking, said Sally Daggett, the city’s attorney.
The ordinance is written to protect residential neighborhoods “from the nuisance impacts that are often associated with short-term rentals” and “to prevent long-term rentals from being replaced with short-term rentals.”
All short-term rentals will have to be registered, inspected, insured and subject to fines and possible closure if they don’t follow the rules. Fines will range from $500 to $1,500 per day, depending on the violation.
Operators of hosted home stays will have to prove it’s their primary residence by showing they receive the Homestead Exemption on their property taxes.
Homeowners who live in one- to four-unit properties will be able to rent out one room or apartment and host a maximum of two adult guests and a child under age 2. Homeowners with multiple units will be required to notify potential tenants if one of the apartments is used for short-term rentals.
When registering with the city clerk, operators also will have to show proof of property and liability insurance, sketch plans for parking and building layout, a completed self-inspection checklist and emergency contact information, among other requirements.
Kelley Bouchard can be contacted at 791-6328 or at:
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