Towns and cities throughout coastal Maine are taking steps to regulate or rein in short-term rentals ahead of what looks to be a busy summer tourism season.

Officials in Freeport last week became the latest to pass a local ordinance imposing registration, occupancy limits and fees on property owners who rent out homes or rooms on such popular platforms as Airbnb or Vrbo. Earlier in April, Cape Elizabeth councilors created a permitting system for short-term rentals that requires owners to use homes they are renting out as their primary residence in a move aimed at preventing out-of-town owners from operating their properties as vacation rentals.

Measures have also been enacted – or hotly debated – in Portland, South Portland, Kennebunkport, Bar Harbor, Rockport and other towns, with mixed results. Advocates for greater regulation contend that short-term rentals take business away from hotels or B&Bs, drive up already high housing costs and can create a nuisance for other residents in quiet neighborhoods.

But opponents argue that attempts to limit or prevent such rentals infringe on property rights and that short-term rentals generate tax revenue for the state — more than $8 million in 2019 from Airbnb alone — while drawing tourists who help support the local economy.

The battle over short-term rentals has also extended to the Maine State House – albeit virtually this year – as lawmakers consider dueling proposals on the industry. One bill would impose new fees on wealthy property owners who operate short-term rentals in order to funnel money into affordable housing programs, while another would bar municipalities from passing local rules prohibiting short-term rentals.

“The individuals who provide this service are creating a necessary and valuable form of lodging that is supporting the tourism industry that buoys our state economy,” Rep. Billy Bob Faulkingham, R-Winter Harbor, said in prepared testimony on his bill to protect the short-term rental industry in Maine. More than 300 people submitted written testimony on Faulkingham’s bill, L.D. 1365.


The one-sentence piece of proposed legislation says that municipalities “may not enact or enforce an ordinance, rule or order prohibiting a short-term accommodation rental rented through a transient rental platform.”

Meanwhile, Rep. Christopher Kessler, D-South Portland, is sponsoring another bill that would support affordable housing by levying fees on owners of short-term rental properties and vacation homes.

“The housing crisis has just been growing in the Portland area for many years,” Kessler told the Press Herald last month. “COVID has just exacerbated those issues particularly in Maine because we have shown ourselves to be a safe place to live and work, and that has just increased the flood of people wanting to live here.”

Kessler’s bill, L.D. 1337, targets properties not occupied by a permanent resident for at least 180 days annually, and includes exemptions for low- and moderate-income residents, as well as for seasonal camps.

Maine has the highest percentage of vacation homes in the country, according to an analysis of U.S. Census data by the financial firm IPX 1031. Kessler estimates that his bill could raise tens of millions of dollars for affordable housing if between a third and a half of Maine’s vacant residences were charged the fee.

Gov. Janet Mills has eased pandemic-era travel restrictions for out-of-state visitors, anticipating a summer of heavy tourism that could boost the state’s economy after a long year of lockdown. That puts serious money on the line for businesses and owners of rental properties.


Roughly 542,000 people stayed in a Maine Airbnb in 2019, which translates to around $91 million in earnings for hosts, according to a Press Herald report from the time.

In Cape Elizabeth, the Town Council on April 12 passed an ordinance that requires owners of rentals under 30 days to live at those properties, effectively banning absentee short-term renting.

“That primary resident has to, at some point, face their neighbors,” council Chairman James Garvin said, according to The Forecaster. “They’ve got skin in the game.”

Town officials said they believed Cape Elizabeth had between 120 and 160 properties hosting visitors for fewer than 30 days in September 2019. Another recently passed provision requires owners of short-term rentals to register them with the town; before that, officials kept track of rentals by browsing listings on popular apps and rental websites.

An ordinance passed last week in Freeport also requires that short-term rentals be registered with the town, and limits the size of gatherings at those rentals. A maximum of 16 people may attend an event at a short-term rental, though bookings made before April 27 are grandfathered in. No more than two guests may stay in one bedroom, with a maximum of two additional overnight guests, the ordinance says.

Last week, Freeport resident Susan Murphy said she had rented out her home for more than a decade and opposed the measure.


“I’m against the ordinance, I’ve been renting my family property for many years, about 15,” Murphy said. “I think there may be a lot of people out there who are short-term rental owners who don’t know about this.”

Another resident, Joy Veilleux, said other parts of the ordinance would allow neighbors and the town to mitigate any disturbance of the peace caused by short-term renters.

“Unfortunately, there are properties in Freeport that are unhosted and they don’t seem to care about the effect that their guests may have on the neighbors,” said Veilleux, who supported the ordinance. “This ordinance will give the neighbors the opportunities to resolve these issues with the town’s help.”

Registering a short-term rental with the town of Freeport requires a $100 fee and must take place by July 1; town officials will begin assessing fines for unregistered properties by Sept. 1.

Maine is far from the only state to debate regulations on short-term rentals, and the pandemic has only complicated questions about sanitation and noise. Though short-term rentals cratered around the time of COVID-19’s arrival in the United States last spring, they rebounded more quickly than hotels, according to an analysis published in Forbes by the rental data company CEO Taylor Valore.

Between March 2020 and September 2020, Airbnb occupancy rebounded 13 percent across more than 300 U.S. cities, according to Valore, who expects growth to continue through 2021.

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