State of Maine; Vacation rentals are big business



By Jill Goldthwait

Well hello, Ellsworth. Looks like you’re expecting company. Floods of housing is being built all over the city. Single-family homes, apartments and low-income housing, and the scale of most projects is not overwhelming. There are balconies. Patios. There will be landscaping.

Best of all? New housing is being designed for people who will live in Ellsworth year-round. According to an Ellsworth American article, when asked about their use for short-term rentals one developer responded that the shortest lease would be six months.

The anticipated market for this housing varies from “baby boomers who are downsizing” to “professionals” coming to the city for work. This housing build-out comes on top of a grant received by the city in 2016 to improve existing housing stock in the central area of the city on both sides of the Union River. That grant came with stipulations aimed at keeping the housing affordable and occupied year-round.

Weighing in on the economic energy evident in Ellsworth last November, City Manager David Cole said: “There was an apparent pent-up demand, particularly for rental housing, across the board, from affordable to luxury townhouses.”

This growth in local, year-round housing stock is in marked contrast to what is happening on Mount Desert Island, especially in Bar Harbor, where the profitability of short-term rentals is causing a dramatic reduction in the availability and affordability of year-round housing.

The original “Airbnb” concept of leasing a spare room in one’s own home has mushroomed into big business. Properties are being snapped up by locals and non-residents alike for summer short-term rental, with some owners offering rooms in three, four or five properties. At the end of the tourist season the lights go out, the shades are pulled down and a growing amount of housing stock sits empty for the winter.

How big is this business? Big enough to have attracted Marriott Hotels, the world’s largest hotel chain. Marriott has entered the short-term home rental market, albeit for pricier listings, through its Homes & Villas service.

In addition to vacationers on MDI there is the summer workforce that descends on Bar Harbor each spring, putting additional pressure on housing. Large employers are buying up multiple housing units or land to build them on, forcing year-round tenants out and rankling neighborhoods that see their populations shift from community-based to transient and become ghost neighborhoods in the winter.

Bar Harbor’s Town Council is wrestling with the problem but it is coming from behind. Only as the magnitude of the Airbnb market became evident did the town begin efforts to manage it. Bar Harbor already prohibited the renting of private rooms for less than five days, but enforcement was almost nonexistent.

Last December, the Town Council boosted the fee for private rentals from a one-time $50 to an annual fee of $250. This is meant to cover the cost of enforcement and the required inspections of rental properties.

A survey of rental housing revealed that one-fifth of the town’s housing stock is listed on short-term vacation rental websites. It is not clear how many more units are rented through other means, but once the issue hit the front pages, floods of applicants came in to register rental units. It was immediately clear that many property owners had either not known of or had ignored registration fees and inspections.

According to data in the Mount Desert Islander, Airbnb hosts in Bar Harbor saw their revenue jump 84 percent from 2016 to 2017.

There are certainly Airbnb units in other Hancock County towns, but they are fewer in number and, so far, lower in impact. Surrounding towns take heed. This may be a welcome revenue source for local property owners, and one which draws in a steady supply of customers for local restaurants, art galleries and other retail ventures, but against these positive aspects must be balanced the potential hollowing out of the year-round community, as is happening in Bar Harbor now.

There was little, if any, objection to the original model of hosting travelers in one’s own home. If it helps to pay the taxes on a primary residence, fine. But commodifying local housing stock to the exclusion of a year-round population is another matter.

Local economies have enough trouble providing year-round jobs. The fewer year-round residents we have, the fewer local businesses will be able to struggle through the winter.

For the surviving local populations, it will be a long winter without a few places to gather when the long dark is upon us.

“Vacationland” is an important part of who we are, but it is not everything. Downeast Maine communities have a life of their own beyond tourism, a life that is worth taking care to preserve.

jillgold@gwi.net

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