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|Wednesday, April 23, 2014|
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
Eric was in a bind. The rent on his Southeast Portland studio had increased for the third year in a row. His salary as a paralegal at a downtown law firm wasn’t enough to cover the rent increases. Then one of his coworkers mentioned he could subsidize his rent with short term vacation rentals through Airbnb. His coworker did warn Eric about the city’s new Airbnb tax and said permitting procedures adding red tape to the process. Nevertheless, Eric created a profile and put his apartment up for rent for $100 a night. Soon he had two reservations and was expecting to earn $200.
Eric had turned his apartment into a money maker, but there were some larger issues Eric had overlooked. With cities and landlords catching up to the Airbnb craze, the laws and policies Eric’s coworker warned him about doomed Eric’s new operation.
Eric is a composite figure. But the problems I've described above challenge plenty of real world Airbnb landlords. After months of city hall battles March 2014 brought with it Portland’s new attitude towards Airbnb. Mayor Charlie Hales struck a deal with the online lodging coordinator, which uses a network of members throughout the world to offer their homes to travelers for a fee. The agreement called for Airbnb operators to pay an 11.5% tax, to cover the city’s 6% lodging tax and the 5.5% county tax.
Airbnb is a wildly popular concept that nevertheless violates many standard leases and zoning codes while angering a hotel industry that pays heavy tourism taxes. That combination, along with a new Airbnb headquarters scheduled to open in Portland this summer, forced officials to address the illegal short-term rental issue. A solution could come with the proposed revisions of Chapter 33.207 of the Regulatory Improvement Code Amendment Package 6 (RICAP 6), which introduced the accessory short-term rental.
The accessory short term rental language creates a new property classification which reads as follows:
An accessory short term rental is one where an individual resides in a house, attached house, duplex, or manufactured home and rents bedrooms to overnight guests. There are two types of short-term rentals
Type A: accessory short term rental where the operator is renting no more than 2 bedrooms to overnight guests
Type B: accessory short term rental where the operator is renting between 3 and 5 bedrooms to overnight guests.
The tax and the proposed laws would allow Airbnb to operate legally in Portland. Operators would need to apply for a permit from the Building Development Services. The application to acquire a permit for both Type A and B rentals includes:
These proposed laws don’t bode well for current Airbnb renters, especially those in rented properties. My daughter Ellen, a New York renter who agreed to speak on the issue, sub-rents her apartment through Airbnb, says these new proposals would dissuade her if New York were to adopt them. “I use Airbnb because it’s simple and allows me to subsidize my rent. It provides people a home when they’re traveling and assures me that someone is staying in my apartment overnight when I’m away.” Ellen’s lease, similar to most apartment leases, does not allow for any short term rentals. The recently updated rental agreement we use at Bluestone & Hockley says “tenants shall not advertise available occupancy of their unit if that available occupancy is in exchange for any sort of compensation." Language like this is assures liability and resident safety are respected in addition to making sure the lease agreement is upheld and that the Tenant / Landlord relationship stays intact.
With these new laws, to be voted on at the April 22nd 2014, Portland city hall meeting, operators like Eric and Ellen may have to reevaluate their commitment to Airbnb. These regulations protect Portland’s strict zoning codes and hotel operators, but they may have an adverse effect on Airbnb’s business. The popularity of the concept Airbnb could inspire renters to ignore both Airbnb and the law. Existing operators of cheap short term vacation rentals will could bypass these new laws and find alternatives ways to rent. Other on-line companies could use this business model more creatively to capitalize and help operators fill their empty pocket books.
Cliff Hockley is the president of Bluestone & Hockley Real Estate Services
Friday, November 14, 2014
BY JESSICA RIDGWAY
Oregon entrepreneurs reveal their favorite caffeine hangouts.
Wednesday, November 26, 2014
BY NISHANT BHAJARIA | OP-ED CONTRIBUTOR
By now, anyone who knows about it has a position on President Obama’s executive order on immigration. The executive order is the outcome of failed attempts at getting a bill through the normal legislative process. Both Obama and his predecessor came close, but not close enough since the process broke down multiple times.
Thursday, December 11, 2014
BY JESSICA RIDGWAY
Lawger upends the typical hourly based fee model by letting clients determine the cost.
Wednesday, October 22, 2014
BY JESSICA RIDGWAY
Most smartphones come equipped with speech recognition systems like Siri or Cortana that are capable of understanding the human voice and putting words into actions. But what if smartphones could do more? What if smartphones could register feeling?
Thursday, December 11, 2014
There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:
The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace.
Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.
This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay.
Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.
New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”
That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!
Thursday, December 18, 2014
BY JASON NORRIS | OB CONTRIBUTOR
The implosion of the energy complex: The best thing for low oil prices is low oil prices.
Tuesday, December 02, 2014
BY LINDA BAKER
A conversation with attorney Erich Merrill about the latest way to raise money from large groups of people.
|A Complex Portrait: Immigration, Jobs and the Economy|
|Woman of Steel|
|Kill the Meeting|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
Port of Morrow's business-ready attitude has a surprising global impact.
Through its support of the arts, the Cultural Trust is strengthening the business community.
Heed the morals of these seminal holiday stories in your everyday life.
Amy will practice in the firm's Business, Real Estate, and Tax practice groups.
While the Bend City Council ultimately upheld the approval which enables OSU-Cascades to move forward with the 10 acre site, it did also thoughtfully consider the nature of its code requirements, resident concerns and OSU-Cascade’s efforts and suggestions and crafted conditions of approval to address potential impacts of the site in the area.