Regulations must catch up to an expanding lodging landscape

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by Jason Brandt, president & CEO of the Oregon Restaurant & Lodging Association

Short-term rentals are everywhere and continue to grow at a rapid pace. According to recently released data at the end of summer provided by industry watchdog AirDNA, “Airbnb and Vrbo rentals across the United States have increased by 105 percent over the past three years propelled by a new wave of travelers looking for more unique and affordable hotel alternatives.”

LEVELING THE PLAYING FIELD
In the state of Oregon, the Oregon Restaurant & Lodging Association has been focused on promoting the importance of an equal playing field in the lodging space. The past decade in our industry will be defined by the disruption created by expanded lodging offerings in land-use zones never intended for broad-based tourist use. Investors have been quick to seize on the revenue advantages of creating daily overnight rates for apartments, condos, and single-family residential homes intended for long-term workforce housing. Local jurisdictions that lack the sophistication and enforcement strategies to rein in illegal hotels are commonly the victims of such pursuits, which creates larger livability challenges for local economies where short-term rental activity is most prevalent.

In Oregon, the Department of Revenue has been actively working to make sure short-term rentals are identified and taxed appropriately. One of the key ingredients was passing legislation requiring short-term intermediaries to collect payment for transient lodging taxes if they collect payment for the lodging stay itself. As a result, state tax collections from lodging intermediaries doubled between 2015 and 2018. The Department of Revenue in recently released data confirms where short-term rentals (as a percentage of overall housing supply) are most common. Of 10 regions identified in Oregon, nine have short-term housing supply as a percentage of total housing supply at .9 to 11.5 percent. Oregon’s north coast, however, has 25.8 percent of their housing supply unavailable for long-term use.

HOSPITABLE HOUSING
Affordable housing seems to be the term of the political season here in Oregon. We must be quick to acknowledge the reality of second vacation homes in tourism destinations as a separate subset unavailable for workforce housing. As one of our colleagues says often, “What is affordable to one worker may not be affordable to another.”

Our advocacy challenges ahead are centering on the lodging industry bearing more responsibility for the lack of workforce housing in regions where hospitality employment represents a stronger percentage of overall employment. Regardless of the concentration of industry employment, we must be quick to engage elected leaders in acknowledging the realities of long-term workforce housing supply and the many facets of short-term vacation rental supply.

THE ROLE OF REGULATIONS
State legislatures around the country are sure to discuss the complicated world of short-term rentals for years. In Oregon, we remain focused on safety and code enforcement, data sharing, and equitable tax collections for all who operate in the lodging industry. We see this work as fundamental to our role as a state association with the goal of protecting lodging operator margins and market share.

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