Kickstarter. Uber. Airbnb.
These services have been at the vanguard of the modern "sharing economy." Yet, what started largely as informal means to generate a little extra money for ordinary people—whether by turning your car into a part-time taxi, or renting out your house while away on vacation yourself—has quickly matured into full-time businesses; in Bend, hundreds of homes are available for short-term rental on Airbnb alone, and investors have swooped into town to purchase homes strictly to use as vacation rentals.
For the past five months, the City of Bend, like other popular destination spots across the country, has struggled to fashion policies that make clear the line between someone simply "sharing" and a full-fledged business exchange—and, moreover, to respond to residents' complaints that high concentrations of vacation rentals dilute the quality of life in residential neighborhoods.
On Wednesday, City Council answered that question—at least for the time being—by voting to limit the clustering of future short-term rentals, and to create a more serious fee and inspection structure. As well, even if not intentionally, they carved out some exceptions for homeowners who only rent now and again, but are not conducting a full-fledged business.
The vote was one of the first significant votes for the new City Council. And, despite diverse perspectives among Council on the particulars, the body ultimately voted in unanimously in the interest of enacting the ordinance's emergency clause, which made the land use policies effective April 16.
"The short-term rental discussion was a large public policy matter that blended a number of issues—livability, tourism, property rights, room tax collection, and others," Assistant City Manager Jon Skidmore explains. "I applaud the Council for moving it from concept to discussion to adoption in a fast timeline [less than 5 months]. Some members of the community will be pleased with the new regulations. Others won't. Council was responsive to and decisive about an issue that impacted neighborhoods in our City's core."
Under the new policies, owner-occupied properties rented out for fewer than 30 days per year are required to have a Type 1 land use permit and an annual license, but are not required to pay transient room tax.
Skidmore says that while an interest in preserving the sharing economy didn't really factor into discussions about how to address owner-occupied short-term rentals, there was some recognition that such setups are substantially different from the kind of year-round vacation rentals most residents are complaining about.
"From what I witnessed, there was recognition that owner occupied STRs likely provide better management of some livability issues than non-owner occupied STRs," Skidmore says. "This is due primarily to the owner being on site with the renters while they are renting. For instance, the potential for late night hot tub parties that disturb the neighbors aren't as likely to occur in an owner occupied STR—especially if the owner wants to go to bed."
He also hopes that one of the more unique elements of the City's approach—establishing "Good Neighbor Guidelines"—will also help address some of the livability concerns raised by neighbors, even if the total number of vacation rentals in the highly concentrated neighborhoods doesn't decrease. Under the new rules, no additional short-term rentals are permitted within a 250-foot radius from an existing rental. However, this does not apply to existing permitted rentals.
"These guidelines focus on informing tenants of the behavior expected of these visitors within residential districts," Skidmore explains. Included are such common courtesies as being respectful to neighbors, keeping noise down after 10 pm, and cleaning up after pets. "In order to obtain an annual license, STR owners and managers must agree to acknowledge the Good Neighbor Policies and assure that these policies are shared with tenants to inform them of their responsibilities as renters."
Still, the new policies bring vacation rentals more in line with other businesses in terms of community input and fee structures. Under the new rules, those interested in renting out their residentially-zoned properties on a short-term basis for 30 or more days each year must obtain a "Type 2" permit. (Vacation rentals in some other zones—like commercial or mixed employment—or which will be rented out for fewer than 30 days, require only a "Type 1" permit.)
Type 2 applications require, among other things, notification to property owners within 250 feet, posting a sign on the property, and allowing neighbors to weigh in with written comment and even appeal to a hearings officer. Because it is a more involved process that uses more City staff time, the price tag is steeper, too. These permits will cost $1,749, the same price as a home occupation permit.
All short-term rentals will also need an annual operating license. While the exact fee for that has not yet been set, it's expected to fall in the $200 to $300 range. At the end of the day, most aspiring vacation rental owners—existing rentals have been grandfathered in for now—will be on the hook for about $2,000 in City fees to get into the game.
Moreover, those permits will be contingent on new density requirements adopted by the City—restrictions that are somewhat stricter than those recommended by the Task Force and the Planning Commission. The Task Force would have allowed 5 to 10 percent of the properties in a 250-foot radius to be vacation rentals, while the Planning Commission landed on 7 percent. The City Council opted to allow just the one.
Note: This article was edited 4/24/15 to more accurately reflect the policies for owner-occupied short-term rentals.