Hotel California

The city has done little to crack down on Airbnb hosts renting multiple apartments.

PEARL DREAMS: The 10th @ Hoyt Apartments, shown here, is one building where single hosts are offering multiple units as vacation rentals on Airbnb.

The Steubs' pad, which they call "Pearl Dreams," features views of the West Hills, a rooftop hot tub and bathrooms stocked with L'Occitane soaps.

"Just kick back in front of the floor-to-ceiling windows with a cup of French press coffee," the Steubs say of their $300-a-night rental, "and watch the world rush by."

You can find the Pearl Dreams apartment on Airbnb, the short-term rental website. But you won't find the Steubs. Records show they live in La Quinta, Calif., where they run Luxe Vacation Homes near Palm Springs.

It's illegal in Portland to rent out your place with Airbnb or other home-sharing services unless you reside there at least nine months out of the year.

The Steubs routinely advertise three apartments in Portland on Airbnb, two at the 10th @ Hoyt Apartments. Each listing says renters get the entire apartment—also raising doubts the Steubs live in any of them. 

"Emily and Justin were very nice over email, but this is a vacation rental; they don't live here," wrote one Airbnb commenter. "They must manage lots of properties, as I started getting spam newsletters from their Luxe Vacation Homes company after booking."

The Steubs did not respond to repeated emails and phone calls from WW. 

An examination by WW found 88 rentals offered by 16 hosts—some while living out of state.

City Hall says it's trying to crack down on short-term rental scofflaws by increasing safety inspections. But the rise of multiple apartments run by a single host shows city Bureau of Development Services regulators are doing little to find many of the most flagrant violators. 

And it presents a test for Mayor Charlie Hales: Can he get Airbnb and other companies to cough up the data on lawbreaking hosts?

"WW is ahead of us on this one," Hales spokesman Dana Haynes says. "It's a potential violation we hadn't anticipated yet."

Critics of City Hall's policy say it's ripe for abuse.

"It's theoretically unenforceable unless you have someone sitting outside the door and checking the box that 'Yes, they stay here 270 days out of the year,'" says Scott Breon, chief revenue officer for Vacasa, a Portland vacation rental management company. 

Some residents of 10th @ Hoyt say they're surprised to discover some of their neighbors are tourists. "People sharing their own space that they live in is great," says Derek Hurley, who just moved in this week. "But turning it into a way to monetize things and game the system—things could get a little nasty.” 

Last summer, city officials, led by Hales, gave Airbnb unprecedented legitimacy by approving some short-term rentals and requiring Airbnb to collect lodging taxes ("City for Rent," WW, July 9, 2014).

Last month, the City Council expanded its approval of short-term rentals, giving the green light to apartments and condos—so long as the hosts live in the units for nine months out of the year. 

Hales and other officials talked last summer about legalizing vacation rentals—homes rented out by absentee hosts—but have not acted, and vacation rentals remain outlawed.

Airbnb's search function makes it impossible to aggregate rental listings, so WW sifted through listings in areas of Portland with a high number of apartment buildings—the Pearl, downtown, places with waterfront views—and noted potential violations. Hosts also list the properties on Airbnb and other vacation rental sites like HomeAway, TripAdvisor and FlipKey.

Jordan Allen, president of vacation rental company StayAlfred, advertises three units at 10th @ Hoyt and 10 others at nearby buildings on Airbnb: six at Mint Urban, three at Essex House, and one at the Indigo.

StayAlfred is based in Spokane, Wash. and has 120 Airbnb listings across the country—from New Orleans to Denver. Allen says that since June of 2012, roughly 6,000 guests have stayed in his Portland units.

Allen says he thinks current short-term rental rules don't apply to his business, but that he has obtained the proper permits and pays lodging taxes—an estimated $200,000 so far.

"This stuff changes daily, and trying to stay ahead of it is fairly difficult, but we do our best," he says.

Other possible rule breakers are closer to home. 

Butternut Condos lists 27 rentals on Airbnb. According to the hosts' profile: "We are a family. We live in Portland. Own an 8-plex of condos. Mom and Dad are chefs, our son and daughter are college students who help us run our businesses while pursuing adventure and higher education. We manage properties for friends.” 

Butternut Condos are not registered with the state Corporation Division or the with the city's Revenue Bureau.

A woman identified as Kim who manages Butternut Condos declined to comment.

Bill Wiese owns the building at 1734 NE Broadway, which is among the Butternut Condos units advertised through Airbnb. He believes the city's restrictions on short-term rentals are unnecessary.

"As long as my sewage or my battery factory isn't draining on to your property or blowing smoke into the air that pollutes everything, then c'mon," he says. "It's just crazy that they want to tell us what to do. And then when they tell us what to do, they go ahead and change it anyway.

"I don't know why we have to apologize for making money," Wiese adds. "We just want to make as much money as we can. If I could make money by running a cheese factory, I'd put one of those in."

The rise of short-term rentals being marketed in clusters should concern City Hall, since Portland officials say they don't want home-sharing businesses to squeeze the housing market.

"We have an affordable housing crisis in the city," says John Miller, executive director of Oregon Opportunity Network, "and when folks from out of town buy units and convert them into Airbnb units, that has negative effects on the neighborhood."

In New York City, backlash against Airbnb is ongoing, with that state's attorney general reporting last fall that three-quarters of all listings in the city were illegal.

And last May The San Francisco Chronicle completed its own data analysis, revealing that nearly one-third of the hosts on Airbnb controlled more than one unit.

Christopher Nulty, an Airbnb spokesman, acknowledges that some hosts may be breaking the rules. "We ask all of our hosts to follow local rules and have outlined the requirements for Portland's home-sharing regulations with our hosts on multiple occasions," Nulty wrote in an email.

Landlords could crack down on people breaking the rules. Real-estate company Prometheus owns and manages the 10th @ Hoyt building. 

WW called Prometheus' corporate office in San Mateo, Calif., and was told, "We don't comment on any of our properties," by a manager who declined to give her name.

The City Council voted last month to crack down on hosts who don't submit to safety inspections by fining Airbnb and other websites $5,000 for every host that doesn't display a city permit. The deadline for those companies to comply is Feb. 20.

In addition, the city requires short-term rental companies like Airbnb to list the addresses of their rentals—information that could help the city crack down on hosts who don't live in their apartments. The company has been reluctant to share information.

Haynes, the mayor's spokesman, says the city may have to write new rules to find and penalize hosts renting out multiple properties. "We will come up a policy to try to find folks who are trying to game the system," he adds. "We haven't done it yet. And we don't expect this to be the last time."

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WWeek 2015

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