Council broaches Airbnb, talks rental housing shortage

Expanded rental options for landowners approved in first reading
By Ethan Andrews | Sep 14, 2017

Belfast — The City Council on Sept. 5 zipped through first readings of two zoning changes meant to increase the number of long-term apartment rentals, and set to work on a list of oddball housing-related topics, including Airbnb-style vacation rentals, tiny houses and camper parks.

Underlying the conversation is a shortage of long-term rental apartments in Belfast, known to the council both from personal anecdotes and their own attempts to find long-term housing for General Assistance recipients.

Additionally, councilors debated whether the Airbnb phenomenon is sapping the city's long-term rental stock and whether other benefits might outweigh the losses. Some saw it as effectively putting lower-income residents in competition with wealthier visitors, while others saw it as offering a new source of revenue to landowners who might otherwise have to move out of the city.

On Sept. 5, the council approved first readings of two zoning changes that would allow homeowners, particularly those with smaller lots, to add more rental units than previously were allowed.

The first would allow two bedrooms in accessory buildings on single-family lots inside the bypass and would extend the current in-town rules to single-family lots citywide. The second would increase the number of apartments allowed on lots zoned for multifamily housing, to as many as 20 units from the current standard of three to six units.

Resident Paul Dean asked the council to consider allowing a duplex outbuilding with a single-family home instead of the other way around.

"As long as you have the septic, why would it matter to you which building you lived in?" he said.

City Planner Wayne Marshall said the city is trying to direct new development to areas with sewer and water.

Along with the zoning amendments, Marshall included a list of other housing topics to consider, including safety inspections of rental properties, tiny houses and tiny houses on wheels, which could be regulated like camper parks, Marshall said.

By far the most popular concerned short-term rentals, such as those offered through online brokers like Airbnb.com. Going into the discussion, it appeared that the council would approach so-called "vacation rentals" as a threat to the city's long-term rental stock. But some saw the new market differently.

Councilor Mike Hurley recounted a conversation with an older resident who said she pays half her mortgage with income from an Airbnb rental. "She said, I couldn't live in my house if you take this away," Hurley said.

Airbnb has 62 rentals in Belfast, according to a letter referred to by several councilors. Other websites offer a smaller number — Marshall estimated there are 100, all told. Hurley called the number too small for the stir it appeared to be causing. Harkness countered that the council would be very interested if a developer came to the city with a proposal for 62 new apartments.

Councilor John Arrison urged a serious look at what property owners expect in terms of their own return on investment.

"If someone expects that they can pay half their mortgage with short-term rentals, that is pushing up the market value of the properties and taking away the opportunity for longer-term rentals," he said. "... If short-term rentals is the only way for people to become satisfied from a return-on-investment point of view, then we do need to address that very seriously and aggressively."

Hurley clarified that the woman he spoke of earlier was renting a room in her home to help pay her mortgage, not a separate apartment.

Councilor Eric Sanders cautioned against viewing Airbnb negatively at the start, and said he wasn't aware of any downtown business owners complaining about visitors coming to Belfast on a weekly basis.

Councilor Neal Harkness objected to visitors and businesses getting greater consideration. "We've got a lot of renters in this town, and once in a while we have to think about them," he said.

At a public hearing portion of the meeting, Northport resident Seth Thayer said regulations on short-term rentals could hurt his investment in a building at 2 Cross St. Thayer bought the formerly derelict building and barn in 2013 and renovated it to much public acclaim. It now has two businesses, Brambles and Meanwhile in Belfast, on the lower floors, and a short-term apartment rental on the upper two floors.

Thayer said his taxes have tripled in 2 ½ years. Without the income from the short-term rental, he would have to sell the building, potentially at a loss, he said.

"It makes me wonder whether your next step would be to regulate whether snowbirds could buy a house here and leave it dark for the winter without renting it out," he said.

The three-bedroom apartment at 2 Cross St. is listed on Airbnb for $475 per night in September. City records show Thayer's taxes on the building — $12,650 in 2016 — have increased 149 percent since he bought the building in 2013. Most of this came from an increase in the assessed value, which went up 120 percent during the same period.

Councilors appeared to take Thayer's testimony to heart. Some used him as an example of the kind of rental developer — one who lives in the area, improves a derelict property and is involved in the community — the city should support.

Other housing angles got less conversation, but councilors seemed to support alternative long-term housing in most forms. Hurley recalled seeing a tiny house community in Las Vegas that was "surprisingly nice." Harkness mentioned mobile home parks in Belmont and Montville that challenged his own notions about trailer parks.

Marshall offered to organize a council meeting with several real estate brokers to get their perceptions on the shortage of rentals in the city.

Breaking the loop on General Assistance

Following a major audit by the state for lax bookkeeping and overspending, City Manager Joe Slocum said the city will be "tightening the ship" of its General Assistance program. However, he noted the rental crunch could be a problem. Increasingly, he said, applicants approved for emergency housing assistance have had trouble moving on to permanent digs.

"We send people out," he said. "They go to the same 25 landlords (who say) I'm sorry, there's nothing available."

Slocum said GA applicants who can't find housing in Belfast this winter will be encouraged to look in a broader area. He defended the approach as similar to what a person who has lost a job would face.

"It doesn't mean we're pushing people away," he said, "but we're trying to get past that cycle of going nowhere."

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