Northwest Coastal Towns Grapple With Growth Of Vacation Rentals

Hot housing markets in major cities like Seattle and Portland have pushed the cities to regulate short-term rentals like Airbnb. But small Pacific Northwest towns popular with visitors are also struggling to balance the growth of Airbnb-type rentals with a tight housing supply. 

Newport, Oregon, is the latest to put those types of rentals in the crosshairs.

Newport is a beach town on the central coast known for its working waterfront, sea lions, lighthouses and aquarium. Now, the town finds itself at the messy intersection of the sharing economy, the tourism business and a housing crunch.

The second of two open houses for people to ask questions and sound off on short-term rentals happens this Wednesday evening at Newport City Hall.

Sandy Benning came to the first open house last Wednesday to support capping the number of short-term vacation rentals available in Newport. Benning said she learned firsthand how tight the housing market on the Oregon coast is when she and her husband moved to Newport two years ago.

“We literally looked for a place to rent for almost 90 days,” Benning said. “That entire time we stayed in VRDs [vacation rental dwellings] around the local area. It was a huge expense for us to stay here over the summer for what, three months, before we found a place to live.”

In Newport, vacation rentals are concentrated along the bluffs above the Pacific Ocean. CREDIT: TOM BANSE/N3

Benning shares a widely held concern around the Northwest that landlords are converting long-term units for the local workforce into short-term rentals for visitors because the temporary rentals are more lucrative.

“This was something we found repeatedly,” Benning said. “In fact, we ended up having to purchase a home. And the availability of homes for us to purchase was very, very limited.”

Newport resident Carla Perry was also on hand at city hall to share her opinion. She lives in an oceanfront neighborhood where vacation rentals have proliferated and created what Perry calls “a critical situation.”

“Lots of traffic. Lots of noise. Garbage. Lots of people,” Perry said. “This was a quiet neighborhood. It’s changed that. There are no neighbors. It’s not like you can know who is staying anywhere.”

Perry is part of a citizen advisory committee that came up with options for how Newport could regulate  short-term rentals. The alternatives include limits on the number of vacation rentals, their location or density, as well as establishing a complaint hotline.

Newport Community Development Director Derrick Toko. CREDIT: TOM BANSE/N3

Newport Community Development Director Derrick Tokos said the committee borrowed ideas from other Northwest places that took a run at this issue recently. Hood River doesn’t restrict home shares or bed-and-breakfasts where the owner or a manager lives on the premises. Astoria has a limit on the number of rooms that can be rented. Both Cannon Beach and Yachats have caps on short-term rentals, and Durango has a density limit that only allows one short-term vacation rental per block. 

“It’s kind of a potpourri,” Tokos said. “They looked at best management practices that a lot of jurisdictions are using. These are all kinda living codes that get updated periodically as jurisdictions try something. Then, ‘Hey, maybe that wasn’t working like we wanted.’ So they make adjustments.”

Newport has a permanent population just over 10,000. Tokos said about 200 properties are currently licensed as vacation rentals.

The push to clamp down comes just as more property owners are looking to list their beach homes with rental management companies. Pete Even, who lives outside of Springfield, Oregon, is in the process of a buying a second home in Newport with hopes of generating some retirement income.

“There’s already enough rules and regulations on the books. They just need to be enforced,” Even said on his way out of city hall. “We want to do it the right way, but we don’t want to be micromanaged if we’re doing it properly.”

Jon Tesar of Kennewick, Washington, owns a second home in Newport that he’d like to turn into a vacation rental. He’s concerned a cap that’s too restrictive might mess up his plans, not to mention the city’s greater economic prospects.

“If you start to establish yourself as a place that is unfriendly to tourists, it’s a slippery slope,” Tesar said. “You don’t know where it’s going. So if you start restricting the number of tourists that can come in, it just doesn’t seem like it’s good for our economy. You’re wasting the space.”

The Newport City Council will have the final say on what to do after the citizens committee and the planning commission first try to reach consensus where they can.

Newport currently has a fairly basic licensing requirement for vacation rentals that permits them in all zones of the city if adequate parking is available. Nearby Lincoln City last year joined other coastal cities such as Manzanita, Seaside and Gearhart in limiting the number of vacation rentals allowed in residential neighborhoods. Astoria only allows vacation rentals in commercial zones, although an Airbnb search this week showed that restriction is being flouted.

But regulations can also come with consequences. Manzanita’s rules are being challenged in federal court as excessive and unconstitutional by a Washington woman who was fined for accepting money from friends and family who stayed at her second home. In Gearhart, vacation rental proprietors forced a voter referendum on restrictions they considered overly strict, but the rules were upheld at the polls last November.

Vacation rentals are a hot topic on the Washington coast, too. Long Beach, Washington’s city administrator recently said his community has learned from the experiences of Oregon coastal towns. Long Beach and nearby Ilwaco now strictly prohibit short-term rentals of homes in residential zones unless the property owner obtains a conditional-use permit.

In Ocean Shores, Washington, the city planning commission this spring heard testimony that “hundreds” of short-term rentals are operating in residential areas in likely violation of city codes and probably not paying state and local taxes.

The planning commission continues to study the approaches other places have taken with no action anticipated before autumn.