Illustration by Ryan Alexander-Tanner

AIRBNB HASN'T WASTED much time settling into its newfound legitimacy.

A few weeks after its Portland users won the right to share their homes with temporary guests—something a lot of people had been doing all along—the company invited interested would-be hosts to a mixer inside its temporary Old Town offices on September 25.

The three-hour event was swanky, and all about preaching the gospel of the sharing economy, offering newbies a chance to chat one-on-one with "a few of our city's most successful Airbnb hosts." Anyone who might have been deterred by prior illegality was free to show their faces and ask all the questions they wanted about getting onboard.

But something important was missing in the gushing literature promoting the event: an explicit mention that not everyone in Portland who wants to host through Airbnb is allowed to.

The permits approved by Portland City Council—available as of September—extend only to people living in single-family homes. Apartment- and condo-dwellers, which Airbnb has called "a critical part of our community," do not have the right to offer up all or part of their homes. And yet, as it turns out, Airbnb might not need to fudge that for long.

Mayor Charlie Hales' office plans to release proposed rules for a controversial expansion to multifamily buildings by the end of the month, the Mercury has learned. The proposed limits—flowing from talks between landlord and renter lobbyists, housing advocates, city staffers, and even Airbnb itself—might even become law by the end of the year.

But while Airbnb has cheerily said it welcomes the city's embrace, participants in the talks also say the company will have plenty to grumble over. Meanwhile, some participants are worried the proposed rules won't do enough to address problems with discrimination and affordability—an especially acute issue at a time of rising housing costs.

"I'm hoping we get to consensus," says Jackie Dingfelder, the policy director for Hales who presided over three separate meetings on the new rules this summer. "It may not be what everybody lands on to the 'T,' but I think we're going to be able to address the majority of the concerns we've heard."

Most consequentially? Hales' office wants to maintain the city's current ban on short-term rentals in homes that aren't someone's primary residence. And further, it will suggest a cap on the number of primary residences that can legally be offered up as short-term rentals.

The current thinking would allow licenses for at least one unit in every building citywide, but for no more than 10 percent of the total units in a larger complex, Dingfelder tells the Mercury—a smaller number than a 25 percent figure sources say was floated in discussions.

Sources say the cap was demanded by Commissioner Nick Fish, who joined with Commissioner Amanda Fritz to help slow Airbnb's expansion to apartments this summer.

It's similar to a proposal first crafted in Austin, Texas, which allows 25 percent of buildings to be rented on a short-term basis in commercial zones, and just three percent everywhere else. (Austin also caps the number of available single-family rentals in each of its federal census tracts.) Airbnb supporters lobbied against the caps in Austin, and sources say the company pushed back during meetings here.

"They don't like the idea of a cap," says one source close to the talks, who also gave the company credit for "sitting at the table." "They believe people should be able to use their residences as they see fit."

Airbnb, in a statment, was sanguine: "Portland is embracing home sharing and we have been proud to participate in discussions about this matter."

The cap, however, was too important to policymakers to give up—for two reasons.

By making sure entire buildings aren't turned over to short-term rentals, the city believes it can work around stringent state rules that would otherwise force interested landlords to comply with the same building codes that apply to hotels. That would require a change in how a building is classified and likely call for expensive upgrades including emergency exits and sprinkler systems. Officials worried landlords and tenants would look at the cost and decide it wasn't worth going legit—keeping their units on Airbnb's gray market.

Just as important, by limiting the number of units in each building, Hales' proposed cap has won tentative buy-in from tenant rights advocates who've raised concerns over equity and affordability. Advocates told city hall that a per-building cap, as opposed to some kind of citywide cap, will keep landlords in desirable neighborhoods from cashing in and converting affordable long-term rental units already in short supply.

That isn't to say the cap is a panacea.

Tenants rights advocates remain wary, not convinced the cap—without more rules—won't lead to fair housing violations. Interestingly, they've found some common ground on that issue with rental industry advocates.

"If you're going to have a cap," says Deborah Imse, executive director of landlord lobbying group Multifamily NW, "who makes the decision on which of the building's residents get to do it? It sets up something where an owner can be discriminatory about who they allow."

"We're not going to tell landlords which units those are," Dingfelder responds.

There's a flipside to that concern. Tenants who have permission—and who've come to rely on their extra rental income—might be loath to rock the boat by asserting their rights over regular tenant issues. Moreover, Imse says, landlords would be free to raise rents for tenants seeking permission to post legally on Airbnb.

And that's not all.

In regular rental situations, landlords are barred from discriminating against tenants over things like race, gender, sexuality, and family status. But tenant rights advocates say those considerations don't really apply to hotels and motels. They also point out that people hunting for roommates are allowed to be choosier. State and federal laws, they say, are largely silent on how Airbnb rentals ought to be treated.

"There are a lot of things that need to be fleshed out and thought through," says Pegge McGuire, executive director of the Fair Housing Council of Oregon. "That's not only a national discussion, but an international discussion."

Hales' office has stressed it's open to revising its proposals, during a 30-day public comment period before the city council votes this year, or even after they've been in place for some time. Dingfelder says the office also has proposed several other restrictions or exhortations meant to ease concerns. Among them:

• Landlords, property owners, or homeowners associations must sign onto applications for short-term rental licenses. If you've signed something saying you're not allowed to do the rentals, nothing in city code will supersede that. The city hopes to track which units in which buildings are up for rent.

• Smoke and carbon monoxide detectors must be present—but Hales' office is pointedly not interested in duplicating inspections already carried out by the fire marshal. The city has contemplated charging as little as $100 for a two-year permit, less than the $180 it charges for single-family homes. But Dingfelder says that's still in flux.

• Hosts must send notices, with contact information, to neighbors above, below, adjacent to, and across the hall from their unit. They also must notify their local neighborhood associations.

The mayor's office has encouraged Airbnb to work with tenant and landlord advocates to craft educational materials letting hosts know what the rules are.

But Justin Buri, deputy director of the Community Alliance of Tenants (CAT), says Airbnb resisted suggestions it create a resource page that pops up whenever someone in Portland tries to list their home on Airbnb.

"For how much money they have," says Buri, referencing the company's estimated $10 billion value, "I don't think that's a heavy lift."

Already, Buri says, people have called CAT's hotline with complaints about potential violations. The Portland Bureau of Development Services, which enforces city code, also has begun receiving calls, officials say. The more education hosts and renters receive, advocates like Buri say, the smoother this expansion will go. That's especially important because enforcement of any violations will rely on complaints.

And yes, says Dingfelder, city hall is fully aware that dozens of apartments are already up for rent on Airbnb without a license—outside a landlord's control. If the new rules are too draconian, she says, that might continue.

"The market is ahead of us, frankly," says Dingfelder. "What's the right amount of regulation? And how do we balance health and safety and affordability?"