Vacation rentals spike as Bar Harbor grapples with shortage of affordable housing
In 2018, there were 79 new vacation rental registrations in Bar Harbor, a 295% increase over 2017.
Linking the surge in vacation rentals to a decline in year-round affordable housing, the Bar Harbor Town Council rejected a proposal to impose a 60-day emergency moratorium on “non-hosted” vacation rentals. Non-hosted means a rental that’s not owner-occupied.“I think we do have a real problem in this town,” Chairman Gary Friedmann said at the council’s April 2 meeting, which drew an overflow crowd to discuss the topic.
“When my family moved to the Pine Street/Forest Street neighborhood in 1982, the neighborhood was filled with families,” he said. “We’d see kids riding bikes up and down the street. Now, when you walk the streets in the winter, it’s dark.”
The situation has been brewing for a decade or more, he said.
“We knew we had a changing environment, with online rentals, and we weren’t sure if we had a handle on it,” he said.
Town staffers that handle safety inspections for vacation rentals are overwhelmed by the number of applications, he noted.
Planning Director Michele Gagnon said that 81% of households were unable to afford a median priced home in Bar Harbor.
The median price home in Bar Harbor is $317,000. A household would need an income of $91,000 to afford that home, significantly more than the actual median income of $53,000, she said. An affordable home for that income is $184,000.
Of the 45 houses sold in 2018, only one was considered affordable, she said.
Year-round housing numbers are going down and seasonal housing is going up, she said. According to census data from 2010-17, Bar Harbor’s population is rising 2.3%, but the number of affordable housing units went down 1%.
Employers struggle to attract and retain workers due to the lack of affordable housing, Gagnon said. The surge of vacation rentals is constricting the supply of year-round rental housing and inflating the overall cost of housing, she said.
Vacation rentals are not the only factor impacting affordable housing in Bar Harbor, she added. It’s also in part due to a limited amount of land, 43.6 square miles, available for 5,200 people.
Gagnon said the moratorium was proposed in order to give town staff a chance to catch up on pending registration applications, create a vacation-rental database in the computer system and conduct analysis on locations and types of vacation rentals, which the town doesn’t currently have.
“Vacation rental registration requirements have been in effect since 2006,” she said. “The need for affordable housing has been discussed for more than 10 years … This has generated an incredible amount of conversation, and will continue to generate a much-needed conversation.”
“The numbers reflect there’s a serious uptick going on,” said Town Councilor Joe Minutolo. “We as a council have heard people talking about, ‘I can’t get an apartment; our workforce doesn’t have any place to live.’”
But Minutolo expressed reservations about a moratorium.
“I think this will ease the pressure a little bit, but I think we need to do it without collateral damage,” he said, referring to people who have invested in units or upgrades in expectation of establishing a vacation rental for the coming season.
Vice Chairman Matthew Hochman, however, said it wasn’t clear if the uptick in applications was due to a surge in the number of additional rentals, or to a surge in the number of rental owners who were operating to date without registering.
Rebecca Richardson, owner of Bar Harbor/Acadia Cottage Rentals Inc., agreed with the second take.
“The crisis might not be what it seems,” she said. Rental owners might be going to the town office to register specifically because of recent discussions around the topic.
“Many property owners didn’t know they needed to register,” she said. “We’re likely seeing these owners trying to comply with the rules.”
Amber Howard of Town Hill, an outlying village of Bar Harbor, said, “It’s disingenuous to provide the information to people to get registered, and then when they start to register to say, ‘Whoa, it’s too many people.’”
Bar Harbor homeowner Janice Lowe said her primary concern centers on future homes being sold to outside investors for conversion into vacation rentals.
Residents grappled with the benefits and consequences of short-term rentals at the council’s March 19 meeting, which also drew a standing-room-only crowd. The planning board will be developing proposed amendments to the land use ordinance, addressing vacation rentals and short-term rentals.
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