Some Maine cities and towns have zeroed in on short-term rentals during the housing crisis, but a study released this week found that they don’t often compete with homes on the market except in populated areas and tourism destinations.
Seasonal homes have remained steady at about one-sixth of Maine’s housing stock since 2000 even after the rise of online platforms like Airbnb, according to a report released by Gov. Janet Mills’ administration office and MaineHousing this week. It said the vast majority of those homes would not be viable as year-round housing due to their size, cost or designs.
It is a reminder that overall supply remains the biggest factor in the state’s affordability crisis. Research published in the Harvard Business Review has found that the proliferation of short-term rentals raises rent prices in urban areas but that restricting them can also stunt overall development in communities.
“When we see a problem, it’s easy to draw conclusions that may or may not be borne in fact,” Rep. Traci Gere, D-Kennebunkport, the co-chair of the Legislature’s housing committee. “[Short-term rentals] are a part of the picture, but they’re not the only thing.”
Maine’s seasonal homes are concentrated along the coast and around inland lakes and ski regions. Even in the coastal region, which stretches from Hancock to York counties and includes about half of the state’s seasonal homes, the share of seasonal housing has been flat since 2000.
“We have never seen (that share) go up that much over time,” Christiana Whitcomb, who prepared the study with consultancy HR&A advisors, told reporters earlier this week.
Only a third of those properties are comparable to naturally occurring affordable housing based on size and quality, the study found. In each region, the total number of short-term rentals that are similar to homes on the market ranges from just 0.6% to 1.4% of the total housing supply.
That number varies greatly from county to county. The one with the most short-term rentals competing with regular homes is Hancock, home to the tourism mecca of Mount Desert Island. Roughly 1 in 10 homes there are listed as short-term rentals, yet only about a third of those would be affordable if placed on the market.
Short-term rentals may be having some effects in populated places and tourism areas, the report said as a caveat. But in the inland areas of Kennebec and Somerset counties, they are not much of a factor in the housing crunch, said Dave Pelton, real estate development director for the Kennebec Valley Community Action Program.
Scarcity and affordability are more to blame, he underscored. The housing report released this week was headlined by a finding that Maine needs to nearly double housing production through 2030 to make up for historic underproduction and account for projected growth.
“It’s not like someone’s missing an affordable housing opportunity because of a lake house,” Pelton said.
Political support for regulating short-term rentals has risen since home values rose earlier in the COVID-19 pandemic. Many Democratic legislative candidates backed restrictions during the 2022 campaign.
Portland began tracking and regulating them in 2017, though it voted down stronger restrictions in 2020. Bar Harbor instituted restrictions in 2021. In Rockland, non-owner occupied short-term rentals are capped at 65. In the southern Maine resort town of Kennebunkport, the cap is 400.
Rep. Valli Geiger, D-Rockland, who supports restrictions, conceded that there are no short-term rental properties in her city that would be affordable to the working class. But she said they would be snapped up in a burgeoning tourism destination where rent has been nearly as high as it is in Portland with little housing supply.
“It used to be a working town,” she said. “People have been priced out of local homes.”