Do short-term rentals have a negative impact?

An ad hoc group called CATS (Citizens Action Team of Sisters) has formed, with the goal of helping to formulate policy for growth and development in the city. The group believes that Sisters is overwhelmed by the increase in population and building, and perhaps lacks competency to meet the growth.

The new group, just getting itself organized, has no office nor governing authority nor official spokesperson. Mark Dickens is a lead organizer and speaks with conviction about the group’s potential, saying that they are now 12 to 15 in number with plans to meet monthly or semimonthly. They hope to grow their numbers.

They are regulars lately at Planning Commission and City Council meetings, where Dickens says they have been welcomed and felt heard. He sees CATS as an ally to the process, not oppositional, notwithstanding their concern with any number of pending actions by the City.

Each of the ad hoc citizens has a different hot button. For Dickens it’s the issue of STRs — short-term rentals. Think Airbnb or VRBO — vacation rentals. Dickens is a walking encyclopedia of statistics and policy papers supporting his contention that unregulated STRs are fundamentally changing the character and affordability of Sisters.

Tourism-based towns all over Oregon are grappling with the success of Airbnb. Since its inception in 2008, the home-sharing platform has grown rapidly, from a start-up of three college students to a $30-plus billion company with over 3 million listings in 190 countries and 65,000 cities and more rooms available than any major hotel chain, including Hilton, Intercontinental, and Marriott. As such, some regard it as a disruptive innovation for the traditional lodging industry.

Oregon has a vital tourist economy where 237 of 241 cities are under 100,000 in population. There are STRs in all of the state’s 36 counties and in 75 percent of the cities in the state. The small cities account for 8,000 STRs, or roughly 44 percent of the total STRs statewide.

A permit to operate an STR is required by city ordinance. Dickens claims that the City has issued 100 such permits and that the number is growing each year. Dickens has no data showing the number five years ago, but he projects that about 30 per year will be added going forward.

The theory is that investors come in and snap up housing stock, paying full asking price or more, driving up the average home price, contributing to the lack of affordable housing in Sisters. The City limits an STR to every 250 feet.

“That’s essentially one for every three houses,” Dickens said.

He also cites the 2020 census for Sisters showing that 319 dwelling units are not occupied full-time or at all, about 20 percent of all homes. Dickens and others worry that some homes are operating as an STR under the radar, not bothering to get a City permit or paying the tourist occupancy

tax.

“A proliferation of STRs will destine Sisters to being a tourism town and not one of diverse employment and population,” Dickens

said.

Newport, Bandon, and other towns driven by tourism have limited or placed a moratorium on STRs, which thus far have survived legal challenges. Newport capped theirs at 176. Bend has doubled the separation of license holders from 250 to 500 feet. Ashland has put so many conditions in place, ranging from the amount of parking to the property being at least 20 years old, that they effectively killed incentives for any new STRs.

While not the primary cause of affordable housing problems, many experts believe that STRs do have a negative impact on affordable housing at the local level, especially in high-tourism communities. Several organizations, such as The Pew Charitable Trusts and the Harvard Business Review have conducted or published research showing that, as the number of short-term rentals increase in a community, the quantity of affordable housing units decrease.