Comparing B&B, TRT, and VR laws on the Oregon coast

At the July 27, 2015 Lincoln City City Council meeting, Ross Smith presented worksheets that compare the Bed and Breakfast, Transient Room Tax, and Vacation Rental laws for all the cities and counties on the Oregon Coast, as well as Sisters, Oregon. The worksheets are available in three different formats:

1. Adobe Acrobat (.pdf)
2. Microsoft Excel (.xlsx)
3. Google Sheets

Ross also asked J. Christopher Minor, a former city attorney of Newport, to provide a legal analysis of six questions regarding Lincoln City’s vacation rental laws. Ross’s letter to Mr. Minor can be downloaded from 2015-06-02-letter-from-ross-smith-to-chris-minor.pdf, and Mr. Minor’s legal analysis can be downloaded from chris-minor-vrd-analysis-ocrd.pdf.

Here is the speech Ross wrote, but didn’t really stick to, when he spoke at the Council meeting.

Honorable Mayor and Councilors,

Thank you for giving me the opportunity to present to you an analysis of our current Bed and Breakfast, Transient Room Tax, and Vacation Rental laws. To create this analysis, we reviewed the relevant code for all the cities and counties on our Oregon Coast, and have summarized the work into 6 tables spanning 11 pages, which you should have in front of you. As you know, draft copies of this work were provided to you a couple of weeks ago, and what is being presented tonight is essentially the same information, but reformatted slightly to be easier to read. Please feel free to interrupt me at any time if you have any questions.

So, let’s get started. On Pages 1 through 4 are a comparison of the B&B laws on our coast.

One thing to note on page 3 is that Lincoln City doesn’t actually have any provision for B&Bs to offer meals.

So, anyone renting out a bedroom out short-term would be considered a B&B. As a result, with services like AirBNB becoming more and more popular, we might to consider looking at reviewing our B&B laws.

Next, let’s turn to pages 4 through 8 which compares our vacation rental laws with our coastal neighbors.

There’s a lot that could be said here, but if I were to limit myself to a single comment, I would say that Lincoln City has certainly blazed its own trail as far as vacation rental laws go. We may want to consider a slightly gentler touch moving forward.

Next, let’s turn to page 9, which compares the zoning rules for B&Bs and vacation rentals along our coast.

One interesting thing to point out is that only two other cities define B&Bs or vacation rentals as an accessory use. Sisters and Seaside.

Next is page 10, which compares the Transient Room Tax rates along our coast.

What we found very interesting is that the average rate on our coast, normalized by population, is 8%, so at 9-and-a-half percent, we are actually over 12% higher than this average. I know some of our lodging providers continue to struggle, so we might consider asking the voters to lower our tax rate to be closer to that average so we could be more competitive in the market. Of course, some might worry that this will result in a net tax loss, but that may not necessarily be so, as an increase in demand may someone offset a loss. It may also encourage us to be more fiscally prudent on the spending side, which is always a worthy goal, yes?

Ok, our last table is on page 11, which compares how the State and our coastal neighbors tax incidental short term rental use.

As you can see, not only the State, but most of our neighbors on the coast do not tax if someone rents for less than 30 days a year. Now we have a similar clause in our tax code, but it cuts off after 14 days, so if we want to encourage incidental use, we might want to consider raising this number to be more in line with our neighbors and the State.

I hope you find this information useful in your discussions, and if there are any aspects of this work that you feel needs clarification or refinement, please let me know. And if there is anything more that can be done to assist you further, please don’t hesitate to ask.

Thank you for your time and your service.

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