The Maine Housing Crunch: Amid shortage, the ‘Airbnb effect’ stirs debate
Courtesy / the SWAN AGENCY
Erica Brooks of the Swan Agency.
As Maine cities and towns struggle with housing shortages and demand for affordable housing for area workers, short-term rentals have been a focal point of debate.
Some places have sought to restrict short-term rentals through zoning. Others have put curbs on short-term rentals at otherwise unoccupied homes.
The city of Portland capped the number of non-owner-occupied mainland units at 400. South Portland banned non-hosted short-term rentals in residential districts.
More recently, voters in Bar Harbor favored an amendment instituting a 9% cap on non-hosted vacation rentals, after many residents said a proliferation of units affected neighborhoods and drove up housing costs. Others said the cap wouldn’t address the affordable housing shortage and only hurts residents who supplement their income with rentals. Some argued that the regulations would reduce the value of their investment.
Bar Harbor’s amendment sought to compromise by creating two designations, hosted and non-hosted rentals. The cap and non-transferability provisions would only apply to the latter.
In 2020, Bar Harbor had as many as 351 non-hosted units, representing 12.5% of all dwelling units, according to the town. Decreasing to 9% is expected to happen through the registration expirations and new construction.
“As real estate professionals, we know the ordinance isn’t going to create affordable housing,” says Erica Brooks, a Realtor with the Swan Agency in Bar Harbor. “It’s just going to create more impact on the vacation rental market.”
Brooks, who is party to a lawsuit against the town of Bar Harbor regarding procedural issues related to the amendment, says rising home prices have pushed much of Bar Harbor’s housing stock out of reach for many buyers regardless of the industry.
“A lot of those homes are $500,000, $600,000, $800,000, and not affordable to local buyers anyway,” Brooks says. “These homes are not all of a sudden going to be $300,000.”
By contrast, she says, vacation rentals can help potential buyers afford higher-priced homes.
“Short-term rentals can be looked at as a strategic way to help people stay in their homes,” she says.
A hybrid model
In Gouldsboro, a recent deal illustrates how the market has changed. A mother-and-daughter acquired Elsa’s Inn on the Harbor and plan to use it as a hybrid home and short-term rental investment, rather than a conventional inn.
“It’s going to be lucrative for the new owners to rent the rooms out, but they’re not running it as a formal bed-and-breakfast,” Brooks says.
A 2019 survey found that 51% of Maine’s Airbnb hosts said the arrangement has helped them afford their homes, with hosts keeping 97% of what they charge.
In 2021, Maine Airbnb hosts earned over $180 million through the platform, the company says. Since 2010, they’ve earned approximately $485 million.
The number of Airbnb listings in in Maine reached 20,000 in October, up from 12,500 in 2019.
The Portland market
Portland has 700 total units registered as short-term rentals.
Of those, 208 are owner-occupied, 386 are non-owner-occupied. Another 22 are tenant-occupied on the mainland and 84 are island rentals.
“There has always been a very large summer rental market,” says Chris Lynch, owner of Legacy Properties Sotheby’s International Realty in Portland. “Right now, I don’t see an increase in people buying investment properties to rent. That’s in large part because some cities and towns have regulated short-term rentals and several are talking about it.”
Short-term vs. long-term
The short-term rentals may also be affecting a longtime staple of Maine’s economy, the long-term renters, including rentals occupied by year-round workers.
“Plenty of people do it just because they can, and they maybe don’t need the money as badly as someone needs a long-term rental,” says Scott Horty, owner of Camden Real Estate Co. “The people who need to work can’t find rentals, so then businesses can’t find people to work. It has a cascading effect.”
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This article is published shortly after the Maine Legislature passed An Act To Implement the Recommendations of the Commission To Increase Housing Opportunities in Maine by Studying Zoning and Land Use Restrictions, without ever mentioning short-term rentals except for occasional a clause about renting for less than 28 days or 30says- avoiding the term "month" begging the question what is the legal difference?
The bill basically undoes any population density restrictions and orders municipalities to create affordable housing zones where the housing density will be 2.5 times that of the surrounding area ( reserved for Airbnb). There will be a generous 0.66 parking space for each housing unit so you guys who decided to economize by driving 2/3rds of a car are the smart ones to foresee where Maine State Inc is going on this. Maine State Inc's take on the Airbnb boon is a 9% sales tax which includes any cleaning fees and guest fees for all reservations. Who does the cleaning?- the workforce. That's why low-income or affordable housing must be provided even as it takes away from property usable by the Airbnb Industry- so squeeze it into as small a space as possible.
Was the bill written to solve the housing problem or to protect the lucrative Airbnb Industry- from which the state profits so well?
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