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B&Bs vs Airbnb: Ashland Struggles With Online Short-Term Rentals

Bill McLean/ JPR

New online companies have emerged where private residents offer travelers a place to stay for the night, often at rates cheaper than hotels or bed and breakfast outfits. In Ashland, traditional innkeepers are crying foul.

Ashland, Oregon is one of the global hotspots trying to reconcile a clash between the traditional hospitality industry and a growing market of private residents trying to make a few bucks renting out a spare room or two.

Ashland resident Tom DuBoisrented an unused bedroom to overnight travelers at his house in a single-family residential neighborhood zoned R-1. Then he got a letter from the city.

Tom Dubois: “We didn’t know it wasn’t legal. We just did it! We heard about it from somebody, and we went on the website ... Airbnb ... and the next day someone contacted us.”

San Francisco-based Airbnb ... and several others, like VRBO and HomeAway ... match travelers with people who rent spare rooms, or maybe even just a spare couch. But some say these transactions constitute unfair competition because private residents aren’t subject to the same regulatory oversight, insurance requirements and associated fees that traditional innkeepers are.

Ashland’s Ellen Campbell of the Chanticleer Inn says tourist traffic in residential areas has more subtle, perhaps more harmful, short- and long-term effects.

Ellen Campbell: “Any one of these effects would probably not be a deal breaker, but cumulatively, systemically, you’re changing the quality of life and the character of the town and the neighborhoods.”

Campbell, a founding member of the Ashland Lodging Association, says prime residential neighborhoods are designed for single family homes, to promote family life. Allowing tourism traffic there she says will cause a demographic shift as homeowners convert long term rentals to short term.

But Ashland resident Larry Chase says it’s a stretch to predict widespread loss of long-term rental stock, because nobody would want to live in a room without a kitchen.

Larry Chase: “We would never choose to rent that spare room out long term, so there really should be no fear of loss of housing stock because that stock wasn’t there to lose in the first place.”

Chase says he suspects arguments against short term rentals are just overblown, protectionist reactions.

Larry Chase: “It’s a perceived competition issue that’s being framed with all these other issues that really are non issues. Because nobody wants to come out and say what is the real issue here? It’s the ‘M’ word. It’s money.”

Campbell says competition is a factor, but she adds the most important money issue is that short term rentals will create in single family neighborhoods a market that did not exist before.

Ellen Campbell: “...Because you’ll get three to four times as much money renting short term.  And this really is all about the money—how you can get your property to make more money for you.”

One result, she says, will be less ... and more expensive ... housing available for long term residents. She adds that changing current zoning to allow short term rentals will undermine the city’s effort to broaden its tax base.

Ellen Campbell: “Ashland has been trying to increase the market ... it’s been the holy grail for decades to get year-round business. They have not been able to do that.”

She says allowing tourism to invade prime residential neighborhoods will only make it harder to attract non-tourism industries to Ashland.

Ellen Campbell:  “We don’t need to double down our bet on tourism. We’ve already won that one. Ashland needs to build a diverse business base. And you don’t do that unless you have places for people to live.”

The so-called “Sharing Economy” is not limited to just a room for the night. Taxi companies and car rental agencies are struggling with websites where drivers rent their cars to strangers. San Francisco last month shut down a website to help urban drivers use their smartphone to sell the space when they vacate a prime downtown parking spot.

Chase says he’s convinced Ashland innkeepers are just trying to protect their own profits because a website called CouchSurfing also helps travelers find overnight accommodations ... but with a twist. It’s free.

Larry Chase: “The only difference between that and what we are proposing is an exchange of money. Impact is the exact same, and the city does not disallow this.”

Ashland City Council member Rich Rosenthal says this peer-to-peer marketplace is a new animal that defies traditional regulations, and no matter what the city does, Rosenthal says people will continue to use these websites.

Rich Rosenthal: “That’s going to be there no matter what the council decides. Whether the council chooses to regulate that type of business or to allow it to basically be a black market.”

Last March, Portland became the first city in the nation to let Airbnb pay the hotel occupancy tax on behalf of those who post rooms for rent, with requirements that are less formal ... and less expensive ... than those for traditional innkeepers.

Rosenthal says Portland’s new regulation is interesting, but he says in Ashland it might not be appropriate to allow a more lenient regulatory structure for private residents than for businesses that provide the same service.

Chase says he sees that writing on the wall and holds out little hope Ashland will seek the compromise that Portland did.

Larry Chase: “I think that if anything is passed it’s going to be so restrictive, that it’s going to severely limit the number of people who are going to be able to do it. It’s going to be ... ‘Okay, we got our win, but, most of us can’t do this anyway.”

Nobody’s quite sure how this issue will shake out in Ashland but consensus among the parties involved is that it could be early next year before the council takes action.