A new rental trend will be facing new laws this year. Airbnb, which was founded in August of 2008 has become rapidly more popular around the country and world the last few years. According to the Portland Press Herald, approximately 282,000 people stayed in a Maine Airbnb in 2017. If you aren’t familiar with services such as Airbnb or Homestay, they are apps that allow you to book a short-term rental in a room or even an entire home for your vacation. This allows people to rent out their homes while they are away, and it has even attracted individuals and companies to invest in a property that is only used for these short-term rentals.
Though these services have been widely reviewed in a positive manner and many are turning to these apps for their rental services, there has also been some controversy. This has led to new legislation in South Portland and Portland. Some complain that having renters in residential areas is disruptive to their neighborhoods. More widespread concerns are that these short-term rentals take away from Maine’s variety of hospitality options, they limit housing options for those looking to rent or buy for their primary residence, and that non-owner occupied homes are taking advantage of a rapidly growing and profitable enterprise. Cities across the country have begun to make laws to regulate these rental properties and beginning this year Portland and South Portland are following suit.
In 2016 Maine Airbnb’s brought in $26 million dollars, almost a third of those in Portland, generating $7.1 million for these hosts. Under state law, short-term rental hosts are supposed to collect a 9% lodging tax which would be remitted to the state. The only exception goes to those who only rent one room for fewer than 15 days a year. Governor Paul Lepage’s proposed budget would require these online tracking sites including Airbnb, VRBO and homeaway.com to collect taxes on every unit rented, and then this revenue would be sent to the state. Airbnb has already agreed that they would collect the lodging tax themselves and remit these to the state. In order for these to be tracked, owners must register their short-term rentals with their city’s Housing Safety Office, the revenue collected would go toward the cost of the short-term rental program, and once this is covered, additional revenue will go to the City’s Housing Trust Fund. This fund is used to promote affordable housing in Maine.
Though the Portland Councilor David Brenerman has said these new laws are, “…in effect, an experiment…” those who wish to list their homes will have to be aware of these changes. These new rules will cap short-term rentals in “non-owner-occupied homes” to 300 units. “Non-owner-occupied” referring to those who own a property but it is not anybody’s primary residence, it is only used as a rental. Additionally, no individual will be able to register more than five short-term rentals. As renters, no more than two people may stay in each bedroom, and only two people may use other areas of the home to sleep. Additionally, fees will apply for each property registered for short-term rental. For owner-occupied building would be $100 for a first unit, $250 for the second, $500 for the third, $1,000 for the fourth and $2,000 for the fifth property. Fees for non-owner occupied buildings are even higher, starting at $200 and rising to $4,000 by the fifth unit. These fees and rules are seemingly to discourage the purchase of property specifically for short-term rental.
Though there are many opinions on both sides of the idea of short-term rentals, it’s hard to deny that legislation will be beneficial for Mainers and renters alike. And whether you are for or against this new legislation it’s important to understand these laws and stay tuned for more changes as it seems legislation may continue to evolve and change.