The key to the puzzle is a particular provision in Portland law that regulates the setting up of an Airbnb. To wit: the “Short-Term Rental Ordinance”—adopted by the City Council in 2014—expressly excludes off-premise operation of short-term rentals. And although Mayor Hales said at the time that the Council may want to come back “at a future time” and discuss whole-house vacation rentals, the ordinance provision requiring that short-term rentals be operated by the resident (i.e., owner or tenant) living on the property is still intact. But before proceeding further, basic questions need answering: what is “Airbnb” and why does it matter?
Short-term rentals are becoming more and more common in Portland’s residential neighborhoods—an irritant for those concerned about possible unruly behavior of transients, but a boon for many, especially empty-nesters who find themselves with too much space or for young people just getting started with homeownership and in need of cash for mortgage payments. So where does the internationally-renowned clearinghouse company Airbnb fit into this picture? Front and center! In fact, the bulk of short-term rentals in Portland are set up through Airbnb. That said, there are other similar companies and some local operators that prefer to go it on their own, advertising through free online sites like Craigslist or preferring to rely on referrals rather than advertising. Thus the need for regulation is obvious, and one of those regulations is the requirement imposed by Council that short-term rentals be on-site operations, not only for the protection of neighborhood livability, but also as a disincentive for entire homes being removed from the larger rental market—an important consideration, given the city’s acknowledged crisis in rental housing.
Returning to the case in question, picture a large two-story four-bedroom house located in the Beaumont-Wilshire neighborhood advertised as a short-term “vacation rental” through Airbnb. Additionally there’s an ADU—Accessary Dwelling Unit—on the site that is rented to a long-term tenant. An application for a city-issued permit for a short-term rental is submitted by the owner to the Bureau of Development Services (BDS) stating that the home can “sleep eight people” and will be operated by a bona fide full-time resident. In response to a BDS request for neighborhood association comment on the permit request, the BWNA Land Use Committee, with active involvement from next-door neighbors, investigates and discovers that the owner resides not at the rental property but several miles away! Accordingly, BWNA recommends that BDS deny granting of the permit but BDS goes ahead and approves the permit anyway, with no explanation given for rejection of BWNA’s recommendation. The BWNA Board responds at its September meeting by unanimously voting to file an appeal, which eventually finds its way to a City of Portland Hearings Officer for adjudication (i.e., owner and BDS vs. BWNA and neighbors).
At the outset, the Hearing Officer informs both sides that the decision on this appeal will be “precedent-setting” for city policy, thus raising the stakes to a higher level.
Speaking on his own behalf, the owner contends that the long-term tenant in the ADU satisfies the residency requirement required by law. But two BWNA Board members rebut this interpretation by presenting evidence that the long-term renter is not involved at all in the day-to-day operation of the rental. Consequently, the Hearings Officer not only rules in favor of BWNA’s appeal, but admonishes BDS for accepting the application in the first place. Case of the Airbnb That Wasn’t closed! Precedent set.