Bar Harbor's vacation rental licenses down 14% from 2021; town set to go after cheaters

Other news: Appeals decision validates Maine judge; SWH Main Street project to pause

BAR HARBOR, June 17, 2023 - With her $43,000 budget approved, Code Enforcement Officer Angela Chamberlain will be seeking bids from “compliance monitoring” companies to expose scofflaws renting rooms or houses to vacationers without a permit. It can’t come soon enough.

Keith Goodrich, who ran for Town Council Tuesday, is one such landlord being cited by Chamberlain for renting a room without a short-term vacation rental permit. Chamberlain said Goodrich had a permit but did not renew.

Goodrich uses the name “Marc” in his listing, but Chamberlain said he is the landlord.

Moreover, his Airbnb listing appeared to be available for one night. The town’s ordinance requires a two-night minimum for an owner-occupied home and four nights for non owner-occupied rentals.

Goodrich, who spent time in jail in 2016 for unemployment fraud, according to the Islander, hung up on the QSJ when I called him for comment.

If determined to have violated the ordinance, Goodrich may have to pay a $1,500 fine.

The town ordinance states:

“The fine for advertising for rent, renting, or operating without a valid registration shall be $1,500. Should the Code Enforcement Officer determine that a second violation of this section has occurred within one year of the first violation, the property owner shall be prohibited from applying for, or obtaining a STR registration, within 12 months of the date of the second notice of violation and may only apply for a registration after payment of a fine of $3,000.”

Chamberlain told the council last year that she did not have the staff to adequately monitor such violations. She asked for the money which was approved.

A “host compliance” service will give the town another weapon to curb the overwrought vacation rental market which is blamed for contributing to the decline of year-round housing.

This comes at a time when the town appears to be making progress to stem the number of vacation units.

In 2021, the town’s proposed licensing of all short-term vacation rentals to cap them had the opposite effect, as panicked homeowners flocked to register before the year-end deadline.

A total of 740 out of a housing stock of 2,500 homes registered to pay $250 a year for the right to rent their abodes as vacation rentals.

Today that number is 632, a 14 percent drop, according to the latest registration data provided by Chamberlain.

The actual number of listings on Airbnb and VRBO is lower, 528 as of this week, and includes hotels and inns which do not fall into the category of short-term rentals.

The research firm AirDNA, which aggregates listings from AirBnB and VRBO, shows the town having 90 fewer listings - a 14.5 percent decline - from a year ago.

This year, VR2s - those which are not owner-occupied - declined to 485 from 527 in 2022, an 8 percent drop.

The goal of the ordinance was to reduce VR2s to 9 percent of the housing stock.

The latest figures reduce VR2s to under 20 percent from a high of 24 percent.

To be sure, the town still has a long way to go before achieving that 9 percent threshold when it would remove the moratorium on new vacation rentals. But it’s moving in the right direction at a faster pace than many had expected.

In addition to cracking down on short-term rentals, Bar Harbor voters on Tuesday approved four amendments to the land-use ordinance to relax various restrictions to make it easier for housing development. Bar Harbor also has enacted incentives for dormitory style housing and “shared accommodations” for seasonal workers so they don’t gobble up year-round inventory.

The BH Planning Board is considering expanding those incentives into more of the town’s 40 zoning districts.

The town also may be benefitting from a macro shift in the economy as pointed out by Ben Sprague, who lives and works in Bangor as a commercial lending officer for Damariscotta-based First National Bank. Sprague writes The Sunday Morning Post, one of my favorite blogs. In a recent post on the risks of investing in vacation rentals, he wrote, “All of the usual risks when considering vacation rentals are relevant … including the problem of difficult and rowdy tenants, the costs of repairs and renovations, and the time and expense of turning properties over every few days.

“An additional risk is the rapid rise in interest rates. For property owners who are financing their acquisitions, which is the majority of them, properties just do not cash flow as well when the financing has an interest rate that begins with a 7 or an 8 as they did when the interest rate began with a 3 or a 4, which was not that long ago.”

The Wall Street Journal reported this week that new-lease rents are about to fall for only the second time since 2008.

Asking rents are up only 2 percent for the 12 months ending at the end of May. It is the largest deceleration over any year in recent history.

“An annual decline would offer relief for millions of renters who have had to contend with rents that rose 25% nationally over less than two years. With housing costs as the biggest component of the consumer-price index, a decline in rents also would help ease inflation.”

“A year-long drop in rent would be a potential problem for the many investors who took out large loans to buy buildings where they thought they would be able to keep raising rents. They are facing a softer market, falling property values and interest rates that have roughly doubled from early last year,” the Journal reported.

These trends and data can inform planners and elected officials as they program ways to best combat the housing crisis.

But as Bar Harbor is working hard on multiple fronts, MDI’s three other towns are blind to such efforts.

MDI has 1,177 listings on AirBNB and VRBO, according to AirDNA, with 649 in Mount desert, Tremont and Southwest Harbor.

That’s more than the entire City of Portland with only 890 listings and seven times the population of MDI. Boston has 1,721 active listings, according to AirDNA.

Portland was one of the first cities in the country to crack down on the proliferation of short-term vacation rentals made easier by online platforms like Airbnb. In 2018 that city enacted an extremely aggressive fee schedule where a non-owner-occupied landlord must pay an annual registration fee for the fifth short-term housing unit of $4,000 a year and for each additional unit after that.

Mount Desert’s select board flirted briefly with enacting a licensing ordinance in the spring but decided the proposal was only going to add paperwork with no obvious impact.

A group of residents in Tremont approached its select board around the same time to address the housing crisis. The town’s response was to hire the same consultant whose recommendation was rejected in Mount Desert.

In fact, the proposed Tremont ordinance is virtually identical to the MD version. Tremont could have saved taxpayers money by simply copying the MD version.

All three select boards on MDI have members who own and operate short-term vacation rentals, their pecuniary interest in conflict with their public responsibilities.

Bar Harbor’s template is there for the taking. But instead of actually tackling the housing crisis, the temptation is to just add a bureaucratic layer and more officialdom.

That’s called municipal problem washing.

Maine’s federal judge upheld in latest legal skirmish over Right Whale protection

BAR HARBOR - The ruling Friday by a D.C. appeals court in favor of Maine’s lobster fishers validated an earlier decision by Bangor’s U.S. District Court Judge Lance Walker, who was the first jurist in the judicial daisy chain over the federal government’s efforts to protect endangered Right Whales.

Walker is also the judge who will preside over the trial in July of the APPLL lawsuit against the town’s citizens-initiated ordinance to cap cruise ship visits.

In October 2021, Walker ruled in a lawsuit brought by the Maine Lobstermen’s Union that federal regulators relied on “markedly thin” analysis that didn’t provide hard proof of the whales’ presence in the roughly thousand-square-mile area off the Maine coast.

Environmental groups accused Walker of relying on his own analysis of data rather than that of scientists, the Portland Press Herald reported.

One month later, they succeeded in getting the federal circuit court in Boston to reverse Walker’s decision.

The Center for Biological Diversity, Conservation Law Foundation and Defenders of Wildlife then filed suit in a D.C. court against the federal government for failure to protect the whales and won a ruling from District Court Judge James Boasberg in July 2022.

In overturning Boasberg’s decision yesterday, the D.C. circuit court used language similar to Walker’s.

Judge Douglas H. Ginsburg of the US Court of Appeals for the D.C. Circuit wrote for a three-judge panel, “The statute is focused upon ‘likely’ outcomes, not worst-case scenarios. It requires the Service (National Marine Fisheries Service) to use the best available scientific data, not the most pessimistic. The word ‘available’ rings hollow if the Service may hold up an action agency by merely presuming that unavailable data, if only they could be produced, would weigh against the agency action.”

APPLL trial set for July 11-13

BANGOR - Federal Magistrate Karen Frink Wolf’s extremely sloppy legal ruling this week denying intervenor Charles Sidman’s request for APPLL to identify its members will be irrelevant to the actual trial in front of Walker, who has to make a simple binary decision: Do the citizens of Bar Harbor have the right to enact ordinances to protect their quality of life? Yes or no.

Wolf did not seem to understand what the issues were before her.

In her jumbled three-page decision, Wolf based her ruling primarily on Sidman’s public criticism of APPLL. Really?

Wolf took objection at Sidman’s public remarks in op-ed articles in the Islander as a violation of “attorney eyes only confidentiality” when, in fact, Sidman was responding to APPLL’s own public relations statements.

Moreover, Sidman made similar public statements long before a lawsuit was filed.

On June 6, The Bar Harbor Story reported Sidman’s reaction to a statement from the public relations consultant hired by The Association to Protect and Preserve Livelihoods (APPLL) in which Sidman likened APPLL’s behavior to cancer.

APPLL’s attorneys claimed Sidman violated confidentiality saying they that they produced some sensitive financial documents to Sidman’s counsel to show that they had standing to bring the claims, “but that they designated the documents attorney’s eyes only given Sidman’s heated op-eds in a local paper where, among other things, he likened APPLL and its members to cancer cells killing the Town and insinuated that they need to be exposed.”

Magistrate Wolf never described what information Sidman was said to have compromised.

Sidman has been writing caustic op-ed articles in the local paper for years, exercising his First Amendment rights.

This was a judicial carnival act, a lazy cut-and-paste of a decision where she borrowed heavily from lawyers for one side against another. This is how lower court decisions get overturned.

No matter.

“All this is a sideshow,” said Sidman, who said the magistrate fell for the claims by the plaintiffs which have nothing to do with the lawsuit.

Perhaps APPLL’s refusal to identify its members is because there are so few of them. A good proxy is Chamber President Gary “Bo” Jennings’s poor showing in Tuesday council elections where he got only 373 votes. Compare that with the 1,780 votes by citizens last November to cap cruise ship visits.

SWH to upgrade to 12-inch water mains in Main Street project

SOUTHWEST HARBOR - A difference in the size of pipes between the harbor side of Main Street and the new sidewalk side was fortuitously discovered in the current $2.6 million project to upgrade drainage, water and sewer infrastructure along that stretch from Apple Lane to Ocean’s End.

The select board recently discovered that the water mains on the sidewalk side were 12-inches wide and those on the harbor side were six-inches wide.

A plan is in place to connect 11 services on the harbor side to join the nine services using the 12-inch mains. There remains the question of who will pay for the $77,500 to connect the 11 services.

Town Manager Marilyn Lowell said there may be enough money in the water and sewer reserve fund to cover the cost which will be discussed at the select board meeting June 27.

Southwest Harbor residents have been waiting since 2017 when Don Lagrange, who was town manager at the time, announced that the town was awarded just under half a million dollars in grant money for reconstruction of the sidewalk from Apple Lane to Village at Oceans End. The project was estimated to cost $840,000 then.

Around that time, Lagrange and others apparently discussed replacing the six-inch pipes. But a record of that was lost in translation and that was not factored into the bid package, Lowell said.

Two-way traffic will return to Main Street Thursday and continue through September when work on the street will restart, Lowell said.

Senator Nicole Grohoski to Discuss Pine Tree Power at Bar Harbor Farm

BAR HARBOR - State Sen. Nicole Grohoski will talk at Bar Harbor Farm on Sunday, June 25 about the citizen’s initiative on this November’s ballot, which was drawn from the consumer-owned utility bill she sponsored in the State House.  This legislation passed with bipartisan majorities in the House and Senate, but was vetoed by the governor.

Versant is ranked by JD Power as the third-least popular mid to large size utility in the nation, just two rungs up from CMP. 

Versant is owned by the City of Calgary, in Canada, whose residents enjoy much lower rates than what Maine customers pay.  “Rather than extracting money from its customers for the benefit of a foreign government, a consumer owned utility would focus on the transition to a clean and fair energy economy,” said supporters of Grohoski.

This event, open to the public, will run from 4 to 6 on June 25 at Bar Harbor Farm, 115 Gilbert Farm Road, with refreshments and farm tours. Town Council vice chair Gary Friedmann, Glenon Friedmann and Rose Avenia will be the hosts.