BAR HARBOR — Renting a private room or residence for periods of less than five days is not allowed under the town’s current ordinance. The town council took major steps to enforce that rule this week when it moved to engage a private company for enforcement and to hike the fee for vacation rentals.
The council voted unanimously Tuesday to allocate $28,000 in town funds to contract with Seattle-based Host Compliance to monitor and enforce the town’s vacation rental policy.
The council also increased the fee for vacation rentals. Currently, owners of such rentals must pay a one-time fee of $50. The council moved to increase the fee to $250, and require it be paid annually.
Council Chair Gary Friedmann called the decision “a short-term action to get a handle on the housing crisis.
“I think it’s important that we bring the whole community along with us,” he said. “Say to the community: We’ve got a serious problem here, and [monitoring short-term rentals] is one of the steps that we’re taking to solve it.”
“To me, it’s a no-brainer,” said councilor Matthew Hochman. “It keeps people in compliance, and funds itself.”
According to Town Manager Cornell Knight, there are 571 listed short-term rental units (properties rented for periods between five and 29 days) in Bar Harbor. With the increased fee, revenues would far exceed the $28,000 price tag of contracting with an outside agency.
“If these fees develop surpluses, maybe that could go toward year-round housing,” suggested councilor Joe Minutolo.
“To me, the biggest thing we can do for affordable housing around here is to do anything to keep our tax rate down,” said councilor Paul Paradis. He suggested making the annual fee higher. “I think it should be $500. We’re going to have a very tough tax year. I want this to be a positive in the budget.”
Councilor Judie Noonan suggested a more gradual increase. “It would be really bad sticker shock to go from $50 to $500,” all at once, she said.
According to Knight, some municipalities charge an annual fee of “twice the average nightly rental fee,” which in Bar Harbor could exceed $500. Knight reported that the median nightly rental fee is $265.
Paradis voiced concern that many short-term renters do not know the policy forbidding nightly rentals. He said that the $250 license fee “should not be construed that this allows people to rent for less than five days. You are not buying a license — nor can you buy a license — to do that.”
Resident Martha Searchfield asked if the town would educate people to ensure that they know the $250 license would not allow them to rent out their property for periods of less than five days.
Paradis agreed that educating people is necessary. “That’s huge. That’s why I went on my tirade.”
According to data released by online rental company Airbnb, 200 Bar Harbor residents are renting their properties through the platform, up from 160 last year. Bar Harbor hosts were expected to bring in $2.5 million during this year’s summer season. Visitors who booked a place to stay on Airbnb in Bar Harbor stated an average of three days, the company said.