Portland ordinances: tiny home and short-term rental permits

Abstract

Purpose This study aims to examine the permit changes enacted by the city of Portland, Oregon, USA, on the construction and subsequent short-term rental of tiny homes. The permitting process was eased by the city in 2014. The city’s enforcement of occupancy and rental ordinances, sometimes called Airbnb laws, were tightened in 2019. The new code restrictions are tighter than the rental codes that existed previously. Design/methodology/approach This paper uses time-series data to first consider the thesis that relaxing building permit requirements for tiny homes has encouraged legal construction and increased the number of applications filed with the city planning office. The number of permits was the dependent variable and time-sensitive dummy variable was the independent variable. An adjusted T-statistic was calculated using a least-squares regression model with a moving average autocorrelation adjustment. The second regression model considers the financial relationship between active listings on Airbnb and HomeAway to a housing price coverage ratio and the aggregated dynamic-factor model used to calculate the economic activity index for Portland. Findings There were two reported case study findings. The first regression used a dummy variable measuring the application response to permit easing. It was positive and significant. The second finding measures active host listings on Airbnb whether they are directly associated with the calculated multiple of the changes in the S&P/Case–Shiller housing price index low tier divided by weekly employee income. Higher numbers for this coverage ratio suggest that listings on short-term rental platforms are increasing directly with the ratio. The economic activity index is insignificant when predicting the level of listings. Regression results indicate that property owners are financially motivated to list dwellings as visitor rentals and possibly motivated to install tiny homes behind their primary residences as short-term rental units. Local economic conditions do not seem to influence the number of properties listed on short-term rental websites. Research limitations/implications Higher coverage ratios encourage property owners to list dwellings on short-term rental websites in the absence of enforceable rental restrictions. Without a method to quickly and feasible identify owners violating short-term rental restriction legislation and enforce fines there is a tendency for active listings to grow in a locale. San Francisco, California, under its new short-term rental ordinance requires online websites such as Airbnb to enforce permit requirements. San Francisco’s ordinance change seems to have resulted in a dramatic drop in active listings available for visitor rentals. Practical implications Information published by Inside Airbnb and Airdna does not separate entire dwelling information into categories such as single-family detached houses; tiny homes; apartments; or condominiums ownership types. Even public housing units are sometimes listed as short-term rentals. The aggregate data makes the relationship between active listings and the coverage ratio difficult to interpret. Listing information is limited and only available for a three-year rolling cycle on a quarterly basis for the city of Portland, Oregon. Social implications Future research studies could consider how tiny homes might play a role in providing permanent housing to local residents or for providing a shelter for the homeless in cities experiencing acute long-term rental shortages. Does limiting the number of homes available as short-term visitor rentals noticeably increase the quantity of housing and lower the monthly rental rates available to permanent residents of the city? Cities have passed short-term rental codes with the objective of increasing the availability of rental housing available to residents at affordable prices. Originality/value Prior research studies focused on who purchases tiny homes; tiny homes used as housing for the homeless; communities composed of tiny homes; and the connection between tiny home living and political activism. The study herein links permit changes to tiny-home building applications. It uses the home price index low tier and the economic condition index for the Portland metropolitan area to predict the number of active listings on Airbnb and HomeAway websites pre-regulation enforcement.

Addressing data quality in Airbnb research

“…Airbnb is used as a distribution channel by hotels . Apartment providers and traditional hoteliers offer their services through Airbnb and other platforms (Brotman, 2021; Camarillo-Naranjo et al , 2022; Cerezo-Medina et al , 2022). The real values may be overestimated, for instance, Adamiak (2020) in his research eliminated 12% of all active listings that fall under this category.…”

Understanding the Housing Preferences of Older Adults: Insights from a Study on Micro-Housing in Salt Lake City, U.S.

“…Microapartments are primarily meant for rent. Renting ADUs may have restrictions in most cities, including limitations on Airbnb rentals [109]. In most cities, it is required that the owner of the ADU resides in the property even if it is rented out (due to covenants)-but there are federal lawsuits against this policy based on the Fair Housing Act, so that might have to change in the future.…”

Factors affecting short-term rental first price: A revenue management model

“…However, according to Levin et al (2002) , Sundararajan (2014) , and Einav et al (2016) Short-Term Rental (STR) home-sharing platforms, such as Airbnb, HomeAway, VRBO , and CouchSurfing , provide digital peer-to-peer (P2P) marketplace for landlords to rent out empty lodging spaces to third parties, thereby increasing availability and consequently adjusting the price as per the offer-demand rule, alleviating the suggested financial squeeze on housing by having a larger offer but reacting more dynamically to macroeconomic factors. Moreover, according to Brotman (2021) , based on the results of their regressions, the motivation of property owners is also increasing, as they even consider building small annexes behind their primary residences to rent out to visitors as Short-Term Rentals.…”