BAR HARBOR — A new system to limit vacation rentals will not go to the voters in November after all.
Following a long public hearing Tuesday, the Town Council decided the town should continue work on the proposal and bring it to the voters in June of next year. Councilors cited confusion about the details of the plan, which had already been tweaked several times since the Planning Board’s split vote last month to forward it to the council, and business uncertainty during the pandemic.
Councilor Jill Goldthwait said she has spent significant time with town staff going through the proposal. “I think I understand it, and then somebody calls me up (to ask about it) and I can’t explain it,” she said.
Because of the pandemic this year, residents and small business owners are worried that their income will be 40 or 50 percent of what it is most years, Council Chair Jeff Dobbs said, and many are worried that they won’t be able to pay their taxes. He said that made him uneasy presenting voters with such a significant change right now.
The proposal creates a distinction between residents who rent out some or all of their primary residence for some of the season (a VR1 rental) and those who do not live at the property being rented (a VR2). Intended to protect those who have said they need to operate a vacation rental in order to afford to live here, the rules would create a cap on the number of VR2 rentals.
At the hearing, several residents said they have invested in a second home in town to rent and use as part of their retirement savings, as many jobs here don’t include traditional pensions or retirement plans. If a VR2 permit cannot be transferred when a property is sold, some worry the property will lose value.
But councilors Gary Friedmann and Matt Hochman argued the price increases related to more properties being used this way are contributing to the housing shortage for people who live and work here year-round.
“The impacts of vacation rentals are well-documented” around the country, Friedmann said. “They decrease the availability of (long-term) rentals and affordable homes.” Hochman noted that many real estate listings tout a property’s potential for vacation rental income.
“There is going to continue being a lot of doubt, because we are human beings full of emotion and we don’t want to hurt anybody,” Planning Director Michele Gagnon said. But, she argued, the longer the town waits to address the conversion of year-round housing to vacation rentals, the harder it will be to do.
In preparing the proposal, the Planning Department worked with a Zoning Advisory Group, which brought a proposal to the Planning Board. But the new process raised questions for Planning Board members, who said their role seemed to have changed.
“I was dismayed at the presentation (to the council) that relied on the ZAG results over the Planning Board,” member Joe Cough said at a meeting earlier this month. “I was not pleased how our recommendations were tossed aside and not supported.”
The ZAG recommended that VR2 licenses not be transferable when a property is sold, but the Planning Board thought they should be. In July, the council changed the transferability provision, limiting it to family members who inherit summer homes.
The issue is so contentious, Goldthwait said, that “even to send it out with a unanimous Planning Board and a unanimous council, it still wouldn’t be guaranteed to pass.”
At the hearing Tuesday, residents Donna Karlson and Art Greif questioned whether the council has the authority to make changes to land use ordinance amendments, or whether it is limited to accepting or rejecting Planning Board proposals.
Town Attorney Ed Bearor said the requirement that the council hold a public hearing should indicate that councilors may make changes in response to what they hear.
The Town Council and Planning Board are set to hold a joint workshop soon to discuss this issue.