Street Roots • April 28-May 4, 2017
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Charter update essential for lodging tax fa ir play
n 1971, when the City of Portland
new economic model and think beyond brick
amended its charter to establish a
and mortar “operators.” Portland has to
transient lodging tax, you could hardly
keep pace, because this business model is
blame our policy makers for not anticipating only going to expand.
the internet.
It’s also a matter of laying the groundwork
Obviously, times have changed. As
for larger community standards, said Fish,
written, the tax applies to lodging in hotels
including existing regulations around safety
and other short-term rentals, collected
measures, which are impossible to enforce if
through the operators. But today we can
companies are operating off the grid.
rent rooms and plot entire vacations around
“I hate this term, ‘sharing economy.’ It’s a
the world without contacting a destination or misnomer and the industry crafted it. What
even dialing a number.
we’ve seen pretty consistently is these new
But is a website owner
internet companies based in Silicon Valley
that connects visitors
very aggressively have mounted all out wars
with short-term rentals
on communities like Portland from adopting
an “operator”?
reasonable community standards. If this is a
Our charter was behind on the times.
preview of the new economy, it’s a great
This May, voters will be asked if they
concern. Our job is to make sure there’s a
support modifying the city’s charter to
level playing field. Our highest obligation is
change the scope of the transient lodging
to make sure consumers are safe.”
tax to align with the 21st century business
At 11.5 percent, the transient lodging tax
model.
is divided between the city and the county,
There’s a reason we have a transient
minus a nominal 1 percent going to support
lodging tax. It’s not an arbitrary fee. Visitors
the tourism bureau, Travel Portland. The
and tourists have a real impact on the
city’s portion, 5 percent, funds Portland’s
infrastructure and services of a city. No
Housing Investment Fund. The money is
matter how the arrangements are arranged,
dedicated to mitigate the impact these short
the impact is the same - and growing year
term rentals have on our housing market,
by year. In 2016, nearly 9 million overnight
where existing apartments are reserved for
“person trips” were booked for the city,
tourists who live elsewhere, not for housing
according to Travel Portland.
Portlanders.
Passage of Measure 26-194 would allow
Measure 26-194 does not raise the tax. It
the city to collect the lodging tax on all
only updates language to include this
expanding online world.
short-term rentals, including those
Companies such as HomeAway are raking
coordinated through websites. Airbnb
in the benefits of a gentrifying Portland
already does this - contributing about $1
without alleviating its burden on the city’s
million to the city’s housing fund last year.
housing crisis. They have taken thousands of
But similar companies renting out our
homes and apartments off the long-term
neighborhoods have flouted the tax - most
rental market to reap higher returns from
notably HomeAway. The company also
short-term rates, with negligible compliance
operates VRBO and was recently purchased
with the basic city laws. By Fish’s
by online mega-reservation outlet Expedia.
estimation, if HomeAway rentals paid the
After years of legal battles between the
lodging tax, it would generate about
city and HomeAway over tax obligations, a
$500,000 a year for the city’s housing
federal court ruled that for the city to
investment fund. It has operated for years
proceed in collecting lodging taxes, it had to
without paying a cent.
update its charter language.
Meanwhile, HomeAway’s owner Expedia,
“They’re not only skirting the law, but
they’re seeking a competitive advantage over in its report to shareholders, boasted $72
billion in gross bookings last year, with
their competitors,” said City Commissioner
nearly $9 billion in revenue - growing two
Nick Fish. “They can price their rentals
times faster than the industry at large.
below the market. That’s not fair.”
“If this is the future of how our economy
Fish is leading the charge to update the
is going to be structured, there are
charter.
conspicuous winners and losers, Fish said,
Portlanders should support this measure.
“And our job is to make sure everyone
We aren’t alone in battling Expedia,
plays fair.”
HomeAway, VRBO and
Change the charter. Let’s
similar companies for
get Portland up to
fair tax collection.
speed.
Cities across the
globe are trying
to rein in this
I
Managing Editor Joanne Zuht
joanne@streetroots.org
Vendor Program Director Cole Merkel
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Chairman Brad Taylor
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