Vacation rental fee gets nod

BAR HARBOR — Vacation rentals — houses, cottages or rooms rented to visitors for less than a month — will be subject to an annual fee beginning next month.

Following a packed public hearing Tuesday, the town council voted unanimously to adopt an ordinance change requiring all vacation rentals to be registered annually.

The ordinance change takes effect on March 21, and units must be registered on or before May 31. The ordinance amendment itself does not specify the amount of the registration fee. However, the town council acted in December to increase the existing $50 fee to $250.

Town officials estimate the new fee will raise $120,000 in annual revenue.

Before the council vote, Bar Harbor residents gave the proposed ordinance change mixed reviews at the public hearing.

In December, the council agreed to a plan to contract with a private firm to monitor and enforce the town’s vacation rental ordinance. Up to $28,000 for that work has been allocated in the coming year’s budget; town officials have said they plan to follow a normal bidding process to choose a contractor.

Resident Earl Brechlin referred to that plan to outsource enforcement in the hearing. “To pay a $28,000 new expenditure line with $120,000 worth of revenue, it’s almost like with cruise ships, getting [vacation rentals] to pay for everything,” he said.

“The important thing is, when you look at the folks that are here tonight, you look at the issues in town, you look at our ordinance, I think it points out we need to look at this holistically… to look at the whole thing and redo it.”

Resident Laureen Donnelly said she hoped the fee would discourage property owners from getting into the vacation rental business. “I think we have a big problem with too many vacation rentals and not enough regular rentals,” she said.

Resident Chris Strout said the town needs better data on vacation rentals.

“The important thing we haven’t heard is data,” he said. “The idea of increasing fee has been reactionary instead of a holistic attempt. We can’t assess what the fee should be if we don’t know the data.”

Resident Greg Veilleux, who said he and his wife have been renting by the week, said they are “happy to pay $250 for an annual fee for the opportunity to be able to do this. That’s a small fee to pay.” He said that he hoped the fee would help the town monitor rentals to make sure units are safe and “everyone’s meeting liability insurance that covers rentals.”

Resident Terry Kelley said that while the $250 fee “more than likely is very reasonable,” he pointed out that some people rent as a side business to make ends meet.

“Many people rent for very limited amount of time, and some don’t rent out [their entire] home,” he said. Renting rooms to host visitors, he said, is “one of the few tools left in the toolbox for affordable housing. That’s an opportunity for them to be ahead of the curve.”

Resident Amber Howard agreed. “Other people have talked about subsidizing affordable housing. For me, being able to rent is what subsidizes my housing. I wouldn’t be able to live here without it,” she said. “As a resident and property owner, the idea of being able to share my space makes me able to live here.”

Referring to the current definition of “vacation rental” in the Land Use Ordinance (LUO) as being “a minimum of 5 days,” she said, “I’d like to see that changed so I can continue to rent my space legally.”

Resident Julia Thomas said, “I rent a single room in my house and I use it to be able to pay my taxes. So the $250 fee makes a big difference to me because I’m not renting all the time.” She asked the council to differentiate between those renting “as a business” and those who are “doing it to afford living here.”

Town Manager Cornell Knight explained that after paying the outside enforcement company, some of the raised money would “pay for staff time to process [vacation rental] applications.” The rest, he said, would go toward decreasing taxes.

Resident Ann Damm asked whether units would have to be inspected with each annual registration. Code enforcement officer Angela Chamberlain answered no; that inspections are only required at initial registration.

“If [the $250] only covers the initial inspection, should other years be $100?” asked resident Keith Goodrich. “The following year all we’re doing is writing a check.”

Local realtor Erika Brooks said vacation rentals and affordable housing “are two different issues completely. I think it’s clear that there’s a lot of moving parts we need to look into thoroughly,” she said, before enacting an ordinance change. “We’re not ready. There needs to be more discussion.”

Councilor Matthew Hochman pointed out that the proposed annual registration fee is not meant to be punitive. “That would be a fine. This is just a fee,” he clarified. “When you are renting your home out, you are running a business. I don’t think it is out of the realm of possibility to pay an annual fee.”

Paul Paradis commented, “Currently we have a permit system with no annual permit renewal. The town has no way of knowing if you’re still doing [vacation rentals]. I think the town needs to know to protect the person who’s doing it.

“The reality is there’s $120,000 in the budget that will be generated from those fees,” he continued. “If they don’t generate that, we’ll have to raise taxes.”

Resident Tom St. Germain asked whether the number of vacation rental licenses will be limited. If so, he asked, would a license be transportable if a family moved?

“I can’t speak for anyone else,” councilor Stephen Coston said, “but I wouldn’t [limit them].” He declared his support for the proposed ordinance change, but said “this is just the beginning of the conversation.”

Hochman agreed, saying, “We need to have some community meetings and workshops… discuss ways to allow people to make a living. We need open dialogue.”

Becky Pritchard
Former Islander reporter Becky Pritchard covered the town of Bar Harbor and was a park ranger in Acadia for six seasons.
Becky Pritchard

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