Sep. 8—LA GRANDE — The La Grande City Council took a first step toward implementing a local law to temporarily ban short-term rental properties.

The city is proposing a temporary moratorium on the acceptance of bed-and-breakfast inn land use applications, citing that short-term rental properties are in direct conflict with the city's recently adopted Housing Needs Analysis and Housing Production Strategy.

"How are we supposed to achieve our housing goals and incentivize new housing when at the same time we're allowing bed-and-breakfast inns without much consideration for the impacts that's having on our community?" Development Director Michael Boquist asked the council.

The city council at its meeting Wednesday, Sept. 7, voiced many questions — and some residents expressed support — in response to the first reading of the proposal to temporarily ban short-term rental properties.

The city defines bed-and-breakfast inns as lodgings of 30 days or less, including traditional bed-and-breakfasts with meal service, Airbnb, full vacation home rentals or equivalent rentals. Since 2020, the planning commission has seen exponential growth in the number of applications for these rentals, but their housing goals have sputtered.

"That has raised a lot of concerns with the planning commission," Boquist said.

Boquist asserted a moratorium would allow time for the completion of temporary or permanent changes in plans, regulations or procedures relating to short-term rentals, including the number of rentals allowed, location and parking accommodations.

"There's a lot of impacts that we're not addressing right now because we don't have a standard," he noted.

Assessing the issue

The planning commission's 2019 analysis estimated the city needs 795 new housing units within the next 20 years to accommodate a projected growth of 1,392 new residents — approximately 40 new units every year to meet the prediction. These dwellings range from single- and multi-family homes to townhomes and duplexes.

Since March 2020, La Grande has seen the construction of 38 new dwelling units. But in that same time frame, the city's planning commission approved 28 conditional use permit applications for bed-and-breakfast inns, resulting in the conversion of 20 newly built units into short-term rentals.

This net realized housing gain of only 18 dwelling units falls short of the 68.25 estimated dwellings the analysis predicted were needed since 2020 — a roughly two-year setback.

Outdated criteria and terminology

The proposed moratorium would apply only to residential zones and for requests for full conversion and use of an existing single-family dwelling unit as a short-term rental.

The conditional use permit criteria La Grande uses to evaluate short-term rental applications were established in 1993 and remained largely unchanged. The criteria are to prevent adverse effects on the use and development of properties in the surrounding area, neighborhood characteristics and livability, traffic, parking and capacity of surrounding streets.

During the Sept. 7 meeting, Mayor Steve Clements expressed his concerns around the term "bed-and-breakfast inns," noting its abbreviation to "BnBs" in the ordinance may invoke association to the company Airbnb. The city uses this term for all short-term rental properties, not just those rented through Airbnb.

Boquist emphasized that "short-term rental" most accurately reflects the topic, and the term is on the docket to be amended.

Residents respond

Resident Bill Riley emphasized the outdated criteria and language for short-term rentals are enough of a reason to approve the ordinance. He submitted a letter to the council in favor of the moratorium.

"This thing is so confusing that you can't even begin your discussion about it without fumbling around," he said. "We don't have the words that work to describe what we're talking about."

Riley also noted the possibility that short-term rental tenants may cause issues in neighborhoods, from noise complaints to partying.

Beverly Calder, owner of the Bella Mercantile franchise in Baker City and La Grande, expressed approval of the moratorium during the meeting. She said many employers in the region are short-staffed, a situation likely linked to the lack of affordable housing for workers.

"It's really important that we protect the housing inventory that we have for people who we need to have in our community," she said. "I know that the rentals are great for tourism, but they go hand-in-hand with people working."

Other meeting attendees agreed with the need to regulate dwellings that could be used for affordable housing, but they acknowledged short-term rentals hold some benefits, from allowing homeowners to vet tenants to promoting tourism.

"How are people supposed to see how downtown La Grandians live if they're not (in) a place downtown where they can actually experience that fully?" asked Chamber of Commerce employee Monica McLaughlin.

Real estate versus reality

From a real estate perspective, short-term rentals may present a promising investment. But local real estate broker Lana Anderson said that for many owners, it can turn into more of a job than a side gig.

Anderson has helped sell several properties that were either converted or had approval for short-term rentals.

"The whole Airbnb explosion is falling in line with the housing shortage," she said. "Every home has double value."

Anderson said she could see a community pushback to the moratorium, especially because it would impact what homeowners can do with their properties. She said La Grande properties often are successful as short-term rentals.

Moving forward

La Grande isn't the only city that is making strides to understand and mitigate the impacts of the short-term rental industry boom.

In the last few years, demand has surged for short-term rentals in small-town and destination markets throughout the United States. According to AirDNA — a data analytics company that monitors the short-term rental industry — 2021 saw 67% more listing nights sold than 2019 in small cities and rural markets. One Stateline article from January 2022 highlighted that in between 2019 and 2020, the number of short-term rental properties in Lincoln County grew from 385 to 601.

"This is kind of a nationwide challenge right now that's happening everywhere," Boquist noted during the meeting.

The local moratorium would become effective upon the adoption at the city council meeting on Oct. 5. It would expire 120 days later, unless the council repealed it sooner or extended it another six months.

Clements said at the end of the 120-day period, the planning commission likely will ask for more time to implement the efforts to mitigate or solve concerns regarding short-term rentals.

Shannon Golden is a reporter for The Observer. Contact her at 541-624-6015 sgolden@lagrandeobserver.com.