PORTLAND, Maine — Beginning next year, people renting their properties through services such as Airbnb will be required to register with the city and pay a fee as part of short-term rental rules the city council approved Monday.
The council voted 8-to-1 to approve regulation of the previously open sector of the sharing economy, introducing a limit on the number of short-term rentals not occupied by their owner and graduated registration fees meant to discourage people from taking too many properties out of Portland’s tight housing market.
The new rules will allow for no more than 300 non-owner occupied buildings to be rented for short periods, though this cap excludes properties on the islands. Further, no one will be able to register more than five rentals through services such as Airbnb.
Such rentals will be entirely banned in single-family homes, if the owner does not live there, and the number of renters capped at two per bedroom plus two more sleeping in other areas. For instance, a two-bedroom apartment could accommodate six people with two sleeping in the living room.
Owners will have to pay to register their rentals with the Housing Safety Office, which will put the fees toward the cost of regulation, with any excess going to the city’s fund for affordable housing.
The fee to register a rental in a building where the owner lives will be $100 for the first unit, $250 for the second, $500 for the third, $1,000 for the fourth and $2,000 for the fifth.
Registration of non-owner occupied buildings will cost $200 for the first unit, $500 for the second, $1,000 for the third, $2,000 for the fourth and $4,000 for the fifth.
The new rules were approved after months of debate on the council over how to approach the burgeoning sector that generates income for many Portlanders but also has created concern that businesses are buying up properties to rent for short periods, effectively taking them out of circulation as permanent housing stock.
Users of Airbnb and other similar services will need to begin registering their properties as of Jan. 1 2018, but the council acknowledged the regulations may require fine tuning down the road.
“This is, in effect, an experiment,” said Councilor David Brenerman, who sits on the council’s housing committee, which spent more than a year developing the rules.
Councilor Jill Duson, who heads the committee, said the city may begin accepting registrations before the new year and that the council intends to review the rules after they’ve been in effect for six months.
The sole dissenting vote came from Councilor Justin Costa, who said he broadly supported the regulations but took issue with the cap on non-owner-occupied buildings, noting “there’s no iron-clad data” on the size of the short-term rental market.
Councilor Brian Batson, a member of the housing committee, proposed an amendment to increase the fee structure for non-owner occupied units by 50 percent. It was defeated four to five, with Mayor Ethan Strimling and Councilors Spencer Thibodeau and Pious Ali joining Batson in support.
The new rules will also limit the number of short term rentals in multi-unit buildings where the owner does not live. One such rentals will be allowed in a two-unit building, two in a three- to five-unit building, four in six- to a nine-unit building and five in a building with 10 units or more.
Airbnb recently agreed to begin collecting lodging taxes on behalf of Maine hosts starting in April. The deal with the state was announced as Gov. Paul LePage is looking to raise the tax from 9 to 10 percent as part of his proposed budget.