Portland Unable to Regulate Airbnb and Similar Companies

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Tuesday, February 24, 2015

Joanna Evoniuk, GoLocalPDX Contributor

Nearly 90 percent of the home-sharing properties in Portland are operating illegally by not holding permits, according to a GoLocalPDX review of the industry.

Home-sharing companies like Airbnb and their hosts are not complying with all of Portland’s rules for short-term rental units, while the City of Portland’s attempts to regulate the industry have fallen flat. 

The city is trying a new approach to ramp up enforcement. As of Feb. 23  the Portland Revenue Division can fine companies and hosts who are not in compliance with city ordinances for short-term rentals.   

“Our goal is to invest the online platforms that facilitate these rentals to have a greater stake in the issue,” said Mike Liefeld, enforcement program manager for the Portland Bureau of Development Services. “It gives authority to hold them responsible in hopes to make enough changes. 

Despite warnings from the City, there are only 168 permits registered with the city for short-term rental properties out of an estimated 1,600 rentals. Not all companies have responded to the city’s requirements for listing host’s operating permit numbers on their websites.

Liefeld said city officials hope the possibilities of fines will encourage companies to ensure their hosts follow guidelines. However, community members want to see more results in regulating the rental-sharing market.

“It’s a far cry from what it should have been by this time,” Dean Gisvold, a leader of the Irvington Community Association, said about the number permits. “Even with the passing of these ordinances, I’ve not seen any evidence of what the city may be doing to crack down on what’s not permitted.” 

New Rules

Portland City Council passed an ordinance on Jan. 21 that gives the Revenue Division power to fine companies and their hosts for failing to comply with city ordinances.

Hosts are required to apply for a permit through the Department of Development Services and undergo a health and safety inspection. Companies must collect a transient lodging tax, as well as require their hosts to apply for a permit and post their permit number on their profile.  Companies can be fined $500 for every listing that does not list a permit, according to Thomas Lannom, director of the city’s Revenue Division.

Lannom sent a letter last month to the several short-term rental companies operating in Portland, such as Airbnb, HomeAway and FlipKey, informing them of the new codes and what actions they needed to take to avoid fines. 

Some rental companies have responded positively to the letter, saying they want to do the right thing, according to Lannom. However, he has not heard back from some companies.

That said, Lannom said he has not issued any fines yet, nor does he plan to anytime soon.

“That’s not our philosophy,” Lannom said. “We are working with companies and trying to encourage them to come into compliance in the first place.”

Citizen Concerns

Some Portlanders are concerned about the number of hosts operating without a permit. Gisvold, whose neighborhood association has dealt with several Airbnb properties, said he thinks it is unfair for short-term rental companies and hosts to not follow guidelines other hospitality business do.

“A tourist has every right to an expectation they are going to be safe and secure,” Gisvold said. “We need more regulation before an incident of a tourist in a room with a fire. Health and safety has always been my main concern.”  

Kit Thompson, an Airbnb host, said she is in the process of getting her permit approved.

“It’s good the city is concerned about safety for the guests. I know about the permit process—it’s a major time drag. But you’ve got to do it, like paying taxes,” Thompson said.

Steve Unger, co-owner of The Lion and The Rose Bed and Breakfast, said the city has made a reasonable license policy for hosts that is relatively inexpensive, and most hosts for private rentals were behind the ordinances that allowed them to operate in Portland.

However, some hosts could be concerned with subjecting their home to city inspections, according to Airbnb host Lisa Myers Warmington.  She signed up for a permit, but is concerned the city did not outline how intense the inspections will be.

“That’s why they’re not signing up—they’re terrified,” Warmington said. “[the city] only gave a verbal promise of ‘light inspections.”  

Complying with Ordinances

Airbnb spokesperson Christopher Nulty said the company sent a letter out to its hosts, informing them of the new requirements in Portland. Airbnb also collects the lodging tax from its hosts, according to Lannom.

“We ask all of our hosts to follow local rules and have outlined the requirements for Portland's home-sharing regulations with our hosts on multiple occasions,” Nulty said. “We plan to continue working with the city to ensure that Portlanders can share their home while contributing to the community.”

Unger said although there is an option for hosts to list their permit number on their profile, they have the option not to fill out that field, and it will not show up if they do not.

How Portland reacts to the actions of home-sharing companies could set precedents for other places around  the U.S., according to Unger. 

“It be a good thing for the city to actually fine Airbnb,” Unger said. “It’s good for a city to take action, especially with other [cities] looking on.  Portland is a leading edge on this.” 

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