A new legislative commission will dig into short-term rentals and their impact on the lack of affordable housing in Maine, a hot-button issue for many communities in the state.

The panel will review data on housing shortages, conversion of apartments and homes to short-term rentals, and zoning and land-use rules. It also will consider the possibility of statewide regulation of short-term rentals as well as policies to encourage more affordable housing.

The idea for the panel came from another legislative commission, created to study local zoning and land use, that last year presented recommendations to loosen local zoning rules to allow more housing development. Those proposals led to a new law allowing secondary homes and duplexes to be built on single-family home lots.

But last year’s commission did not delve into apartments and homes rented out for a few days or weeks, often to tourists and visitors. Instead, it proposed that a new commission give short-term rentals a close look.

“It was very clear to us there was evidence that there could be an impact on affordable housing, but we didn’t have the information to make a conclusion or recommendations,” said Sen. Craig Hickman, D-Winthrop, co-chair of both commissions.

Maine’s housing crisis is likely to get worse before it gets better, Hickman said. But figuring out how big a role short-term rentals play in the state’s housing crunch is difficult because of a lack of statewide information.

“We like to make policy recommendations based on evidence and data. Until we get it we can only speculate,” he said.

Aerial view of houses along Wells Beach on April 4, 2020. A new legislative commission will dig into short-term rentals and their impact on the lack of affordable housing in Maine. Gregory Rec/Staff Photographer, file

The 15-member panel includes politicians from both legislative chambers, the head of Maine’s housing authority, a governor’s appointee and people representing affordable housing advocates, municipal governments, homeowners, agricultural interests, developers and civil rights organizations.

They have been asked to review data on housing shortages for low- and middle-income Mainers and on full-time housing units being converted into short-term rentals. The panel also will review efforts around Maine and in other states to regulate short-term rentals and restrict land use, and discuss strategies to use land-use changes to make home ownership more affordable and ways to encourage more housing through local incentives and statewide regulation.

REPORT DUE BY NOVEMBER

The commission is expected to begin meeting by September at the latest. It is expected to submit a report to the Legislature by early November.

This will be the first time the Legislature will examine short-term rentals statewide, but the practice has riled local communities for years.

Landlords often can earn more by renting out properties on sites such as Airbnb and VRBO than by leasing them long-term. Opponents of the practice say it has displaced residents, put badly needed housing out of their reach and allowed unregulated hotels to spring up in residential areas.

Some communities, such as South Portland, have restricted most short-term rentals to homes and apartments where the owner lives on the premises. In other towns and cities, the conversions have raised concerns that workers and their families will have nowhere to live.

Some restaurants and other businesses that depend on tourists now provide housing for workers, blaming short-time rentals for the lack of affordable options.

A rapid growth of short-term rentals has taken existing housing off the market and increased rents throughout the state, last year’s housing commission noted.

“Although the long-term impacts may not be yet known, there is evidence that short-term rentals are impacting the housing market,” the commissioners said in their final report. “Of particular concern is the rise of non-owner occupied short-term rentals in strong housing markets.”

TRADE GROUP SUPPORTS EFFORT

Greg Dugal, government affairs director for Hospitality Maine, a trade group that represents hotels and restaurants, said the organization supports gathering more data and information about short-term rentals in Maine.

While Hospitality Maine supports short-term rentals, he said, it doesn’t want them to expand without restrictions.

“We are always in favor of making sure short-term rentals are within the fabric of their community and are adhering to a standard that rises to a certain level rather than being left to their own devices and doing everything they want,” Dugal said.

Five years ago, Portland passed regulations that made landlords register short-term rentals and pay annual fees, limited the number of short-term rentals per building, imposed penalties on violators and capped the number of unhosted rentals at 400.

This year, 810 short-term rentals were registered with the city, about 100 fewer than when the ordinance took effect in 2018.

Concern about the short-term rental market in Portland has sparked competing referendums that will appear on the November ballot. The first, proposed by the Maine chapter of Democratic Socialists of America, would prohibit short-term rentals in apartments and homes that are not owner-occupied or in a duplex. It also would increase registration fees. Portland voters narrowly defeated a similar measure two years ago.

The second proposal from a group of homeowners would ban corporate and non-local operators from registering short-term rentals in the city, prohibit the eviction of existing tenants to make way for short-term rentals and increase violation penalties.

CALL FOR BALANCE

Chris Korzen, a short-term rental operator and supporter of the second referendum question, said taking a close look at the issue statewide makes sense. But regulations need to balance demand for housing with the importance of tourist lodging, he said. Short-term rentals didn’t grow overnight Korzen noted – Mainers have rented ski condos, coastal homes and woodsy cabins to visitors for generations.

“We have to start a conversation from the perspective that it is important to our economy, tourism is the No. 1 industry in Maine,” Korzen said. “How do we construct a framework that makes sure we take best advantage of these resources and make sure they benefit the people of Maine?”

The housing crisis is at heart a problem of supply and demand, he said. Without addressing that bigger dynamic, affordability will remain a problem.

“You could take every short-term rental offline tomorrow and it wouldn’t make that much of a difference,” Korzen said.

The Maine Housing Authority is aware that short-term rentals create issues in local housing markets, but the problems it has heard about have been anecdotal, Executive Director Dan Brennan said.

“There is so much we don’t know – and when you start thinking about it, it gets really complicated really fast,” he said. “We have to define the cause of the problem first and figure out where this is impacting the most, and then start a conversation about what to do about it.”