A new city audit has revealed that the vast majority of Portlanders who rent out their homes through Airbnb, HomeAway, or other short-term rental companies are shirking the city’s regulations.
As of October 2017, auditors estimated that nearly 80 percent of all listed rentals were operating without the mandatory city permit. More than 97 percent of all rentals offering three or more bedrooms lacked a permit (kudos to the 13 people that registered). Not only does the audit show that Portland’s 4-year-old regulations on short-term rentals aren’t being followed, it found that it’s nearly impossible for the city to enforce them. That’s largely because companies like Airbnb don’t require their hosts to apply for a permit before listing a rental, nor do they share any data on their listings with the city.
But, for city officials and housing advocates, this news doesn’t necessarily come as a surprise
“Without data, the original version of the rules is completely unenforceable,” says Marshall Runkel, chief of staff for Comissioner Chloe Eudaly.
Eudaly’s office oversees the Bureau of Development Services (BDS), the bureau tasked with regulating these short-term rentals. However, since none of the 15 rental companies that operate in Portland regularly share data with BDS, it’s impossible for the city to know which homes or condos are being used as short-term rentals, let alone who owns them and if they have a permit. The city essentially relies on the benevolence a host to apply for a permit (which can cost $178 for a host renting one or two bedrooms or $5,000 for a house with three or more bedrooms) before renting out their home. But without actual repercussions in place for skipping that step, it’s hard to blame hosts for shirking on their permits.
The more serious problem, according to Runkel, is the city’s inability to regulate what it calls “commercial” short-term rental outfits—or, people who manage several different listings across the city. Those hosts are blatantly breaking one of Portland’s short-term rental rules: that a host must occupy the residence at least nine months of the year. Once the city gets data from those companies, Runkel says, “it’s not going to be very hard to find out who those commercial providers are.”
But first, those companies must hand over their data. According to Portland’s Director of Revenue Thomas Lannom, the city is currently in negotiations with short-term rental companies to get them to start sharing data with the city, a requirement that other larger cities like San Francisco have mandated.
In an email to the Mercury, Lannom writes that while “there are no substantive disagreements about what information to share” between the city and companies, it’s unclear when data-sharing will begin. In Lannom’s words: “Soon.”
City council passed short-term rental regulations in 2014, even though they didn’t have access to the data needed to enforce the new rules or calculate their impact. Should they have waited until rental companies agreed to share that data before passing the ordinance?
“No, definitely not,” says Katrina Holland, director of Oregon Community Alliance of Tenants (CAT). “This is one of those situations where we have no choice but to act, because the housing crisis is so incredibly traumatic.”
Holland says that the city and community organizations like CAT already have enough anecdotal data to prove that there’s a need for immediate regulations on all aspects of housing—including short-term rentals. Many renters have reported getting a no-cause eviction by a landlord who wanted to turn their apartment or room into an Airbnb. It’s that kind of qualitative data that can inspire urgently-needed city policies, even when quantitate data is lacking, Holland says.
She compares this process to when her father was treated for sepsis.
“He came in [to the hospital] with all the physical signs of sepsis. No, they didn’t necessarily have all the tests back to clearly identify what bacteria had invaded his bloodstream,” Holland says. “But they gave him antibiotics because they knew it was going save his life.”
CAT and other tenants’ rights organizations have long pushed the city to collect housing data—not just on short-term rentals, but on permanent rentals, on how rents are changing over time, how many people receive no-cause evictions, and a number of other metrics. Now, the city appears to be catching on, slowly.
In July, city commissioners approved a new program that would require all landlords register their properties with the city and be subject to routine inspections. Ideally, this system would give the city a better idea of how many rental units are on the market and track negligent landlords.
Today’s audit may expedite to the current city negotiations with companies to start collecting data.
“CAT and Mayor Wheeler… we have our differences,” Holland says. “But one thing we definitely agree on is that there’s a significant lack of data collection. And we need that.”
The airbnb app shows listings on a map although it doesn’t give addresses it doesn’t seem like it would be that hard for the city to track down some of these unlicensed rentals. The real problem is that the fine for being caught is not very high so people who I know who worry that their units might not pass the inspection have done the math and realized that it is better to fly under the radar rather than get the permit. The city needs to increase enforcement as well as the penalty if they want to improve compliance with the permit law.
Marshall Runkel and Chloe Eudaly are totally full of shit. Or, they are really so dumb as to not be able to figure out something that dozens of other cities without direct access to Airbnb already have for enforcement. A city doesn’t need access to Airbnb’s hidden data to enforce the laws. It takes some interns, some additional inspectors a computer, WiFi, and a car along with free and easy access to portlandmaps to look up owner name and address. Then you do what cities from Berlin to Santa Monica to New Irleans do: you find the most obvious scofflaws and start fining people. It’s actually even easier than hunt and peck because the city has just been ignoring hundreds of neighborhood complaints about specific Airbnb properties. If it’s incorrect, like an incorrect traffic ticket, they can show proof they are compliant. BTW Berlin fines Airbnb scofflaws tens of thousands of dollars (Euros) per pop and that definitely has stopped it.
But really, what do we expect from a Commissioner who can’t even be bothered to budget for additional much needed building permit staff in general but instead blows over $800k hiring new social media and graphic design staff instead. What an incompetent.