Portland City Council is considering adding two new fees to Portland’s growing Airbnb market. One fee, a 2 percent charge per night on short-term rentals (STRs) like Airbnb, would fund Portland tourism campaigns. But it’s the other—a $4 per night charge on STRs—that could have greater impacts on both STR hosts and local renters. In a housing market where many rental homes and apartments have been converted into STRs, the $4 per night charge will fund more affordable housing in the city and, possibly, encourage STR hosts to consider renting to Portlanders, rather than tourists.
STRs in Portland are currently taxed by the city, county, and state a total of 13.3 percent of their listing price. The new 2 percent fee, already charged to larger hotels, would increase the hosts’ tax to 15.3 percent. Revenues from that fee are estimated to be around $720,000 to $840,000 per year.
The estimated revenue from the other, $4-per-night fee—$1.1 million per year—would go directly into the city’s Housing Investment Fund, which supports Portland’s affordable housing projects.
Over a dozen Airbnb hosts spoke in opposition to the ordinance at a June 13 city council meeting, calling it “regressive” as well as a threat to their own ability to afford Portland’s housing prices.
“Airbnb is helping thousands of Portlanders like myself to monetize our biggest asset and stay in our homes,” said Airbnb host David Bo at the meeting. “Airbnb prevents the housing crisis from becoming much worse.”
Deborah Hanthanor, who turned a room in her house into an Airbnb rental, says the fees could force her out of the city.
“The income I earn helps me pay for my property taxes, water and electricity bills, and to take care of general maintenance,” said Hanthanor. “I’m a divorced single woman, [I] live alone, and without this additional income I would need to sell my home. But where would I go?”
The proposed fee, however, is meant to address a housing crisis that is exacerbated by a glut of STRs in Portland.
“The concern I have is taking long-term rentals off the market and converting them to short-term rentals,” said Commissioner Nick Fish.
He cited a 2017 study showing that a 10 percent increase in Airbnb listings leads to a 0.39 percent increase in rents and a 0.64 percent increase in housing prices in the same ZIP Code.
Data from Insideairbnb.com, an independent website that provides data on Airbnb’s footprint in major cities, shows the company has more than 4,700 listings in Portland. Entire houses and apartments (as opposed to a single room in a home) make up about 66 percent of those listings—though accessory dwelling units (ADUs) may be included in that count. ADUs are small structures built by homeowners in backyards and basements; if they were originally built to be short-term rentals, they don’t remove anything from the overall housing market. According to Insideairbnb, more than half of Portland’s Airbnbs are considered “high availability,” meaning they’re likely only used for short-term visitors, which erases those homes from Portland’s limited permanent housing market.
“Clearly some of those are units that could have been rented as normal housing,” says Lisa Bates, director of Urban Studies at Portland State University. The 1,500 private rooms available on Airbnb, on the other hand, are most likely in homes that are occupied by long-term tenants or homeowners.
It’s those smaller STR hosts that may end up paying more than their fair share if the $4 nightly fee goes into effect. Single-room Airbnbs cost an average of $74 per night compared to $140 per night for a full apartment or home. A $4 fee on all STRs without considering the going rate could be seen as regressive. Requiring hosts to be taxed a percentage instead of charged a flat fee would be fairer, Bates says, and would lessen the impact on hosts charging lower rates.
Several members of city council agree. At the June 13 meeting, commissioners Chloe Eudaly, Amanda Fritz, and Dan Saltzman all voiced concern about the regressive nature of the policy and suggested using a percentage instead.
“A flat fee is regressive,” said Saltzman. “Why not just do a percentage for both?” The city council will hold a final vote on STR ordinances on June 20.
Bates is skeptical that fees alone could solve the housing crisis or convince hosts to turn STRs into long-term rentals. In addition to the fees, she suggests the city create an office of landlord/tenant affairs to help train small-time landlords and make renting out rooms more accessible to everyone.
“Figure out what the barriers are to people doing a long-term rental, then address them,” Bates suggests.