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Portland's finished waiting for short-term rental companies like Airbnb to follow the rules.

Faced with a deficit of affordable housing and a negotiation standstill, Portland City Council is considering an ordinance that will require all Portlanders who rent out their homes through a short-term rental site obtain the mandatory permit to legally do so. Or else.

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"We've had years of discussion and litigation with short-term rental companies about increasing compliance [with the city's rules]," said Mayor Ted Wheeler during a Wednesday hearing on the pending ordinance. "But few have shown any interest in aiding the enforcement of city regulations."

In 2014, City Council passed an ordinance that required Portlanders who rent out their homes through Airbnb, HomeAway, VRBO, or other short-term rental platforms obtain a permit through the city's Bureau of Development Services (BDS). To receive a permit, a host needs to prove their rental space meets basic safety standards (confirmed by an official BDS inspection), pay a permit fee (which can cost between $178 to $5,000), and notify their neighbors.

Yet, according to the most recent city data, only 30 percent of Portland's short term rental hosts are operating with that permit. That's only up 10 percent from data collected by the city in October 2017.

This blatant non-compliance is 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—a step that could help city regulators track down non-complaint hosts. Airbnb has argued that the city's permitting process is too burdensome.

"That means, at any given moment, the city can’t vouch for 70 percent of the units marketed online," said Commissioner Nick Fish at the Wednesday hearing. "We can’t say for sure to anyone accessing these rentals that they’re safe."

Fish compared the city's inability to uphold these standards is akin to the Fire Bureau telling the public it'll no longer be inspecting public venues to make sure they meet fire safety standards.

"I think it has been frustrating for the public to watch us fall short of ensuring public safety," he added.

The city's new ordinance, scheduled for a June 12 vote, aims to change that.

The rule would prohibit all short-term rental companies from advertising rentals without permits. Companies would have the option to dodge this requirement, however, if they gave the city access to data on Portland rentals—like rental location, size, or length of a guests' stay.

Access to this data would let city regulators know if short-term rental hosts are breaking another city rule: One that requires hosts occupy their rental residence for at least nine months out of the year. This rule was created to protect affordable rental homes from being turned into year-round short-term rental pads, further shrinking Portland's diminishing affordable housing supply.

"We know beyond a doubt that short-term rental companies are contributing to a global housing crisis, including a housing crisis right here in Portland," said Commissioner Chloe Eudaly on Wednesday. "And the denial of these platforms—in particular Airbnb—would be laughable if it weren’t so offensive."

Threats of litigation from short-term rental companies like Airbnb have given the city pause in introducing this kind of sweeping regulation in the past.

But in March, the 9th Circuit Court of Appeals upheld a similar policy mandating short-term rental permits in Santa Monica, California. That ruling gave Portland the legal cushion needed to confidently present this ordinance to City Council.

"This ordinance really mirrors the Santa Monica approach that has been tested in that court," said Thomas Lannom, director of Portland's Revenue Bureau, during Wednesday's hearing.

The ordinance, introduced by Wheeler, appears to have commissioners' full support.

It also has the backing of Host2Host, a Portland-based advocacy group for short-term rental hosts, whose members spoke in favor of the permitting process during the Wednesday hearing. But it remains to be seen how short-term rental companies unhappy with the city's regulations—specifically Airbnb—will respond to the June 12 vote.

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In an email to the Mercury, Airbnb spokesperson Laura Rillos wrote: “We have long been committed to working with the City of Portland to streamline the onerous registration process and remain in discussions with the City about the best approach to ensure our hosts can share their homes in a responsible way.”

Commissioner patience with these "discussions," however, seem to be waning.

"Looking back over my ten years serving on council, nothing has been more frustrating on the regulatory side than getting our short-term rentals to follow rules we’ve designed to protect consumers and workers," Fish said Wednesday. "The gig economy has thumbed its nose at local regulators for a long time... and I think people need to understand that this has been a war waged by these gig companies alone."

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