By Hillary Borrud

The Bulletin

If you want to see how the increase in vacation rental homes has impacted parts of Bend, NW Riverfront Street is a good place to do so.

John Kelly moved into a house on NW Riverfront 15 years ago and has since purchased a second home there. He used to lease his 520-square-foot house to long-term renters but decided several years ago to try renting it out as a vacation home. Kelly’s neighbors had the same idea, and there are now nine vacation-home rentals on the short street, according to data from the city of Bend.

Kelly, who is also a member of the Old Bend Neighborhood Association board, said most rentals on the street are operated by people who live there.

Kelly even became friends with some of the vacationers who rented his little house and met up with them for a beer when they returned to Bend on other occasions.

“They’re happy; they’re here to have fun,” Kelly said of the tourists who stayed in his home.

The positive experiences of residents on NW Riverfront are not the rule, however, and complaints have prompted city officials to look into possible regulations on the homes.

The City Council is expected to begin a discussion of vacation rentals and whether to regulate them at a Sept. 17 meeting, and city employees are gathering information such as whether vacation rentals had code violations or other problems to present at the meeting.

Bend City Councilor Doug Knight also lives in the Old Bend neighborhood, and residents there and from across the city have complained to him about loud parties and other problems with the vacation homes. Knight said he received a complaint from one man who lives next to a vacation home after an exotic dancer showed up on the resident’s doorstep, looking for the house where she was scheduled to perform.

“When I purchase a home in a residential neighborhood, I expect solace and stability,” Knight said. So far, Knight said, he received complaints about problems that range from “loud, raucous parties,” to a “conveyor belt of strangers next door and the perceived inability of people to have communication over the fence, neighbor to neighbor.” In at least one case, a homeowners association has asked residents to vote for changes to property restrictions that would prevent owners from renting out homes for less than a seven-day period.

One of the concerned homeowners who contacted the city is Stephen Junkins, who lives on NW Federal Street and said his home is surrounded on three sides by vacation rentals. Junkins said the city should stop issuing new permits for vacation-rental homes and then consider permanent restrictions such as a cap on the density or total number of rentals allowed in neighborhoods.

“The noise, the parties, the strangers are important concerns, but they’re sort of secondary to that loss of community and loss of neighborhoods,” Junkins said.

Unless the City Council specifically designates new regulations as retroactive, they will apply only to future vacation rentals, according to an internal memorandum from city attorneys to the council. The attorneys warned the city would have to build a strong, evidence-based case to change local land use law to restrict vacation-rental homes. Attorneys suggested the City Council also consider a system of incentives and disincentives, such as a licensing system in which properties that repeatedly violate established rules lose their rental licenses, as an alternative to land use code changes.

There were at least 358 vacation-home rentals in Bend as of Aug. 20, according to The Bulletin’s analysis of city lodging tax information. As of June, the city had identified roughly two dozen properties that might not be paying their taxes and thus might not be included in the number of active tax accounts. In 2013, the city hired a contractor to audit tax payments by vacation-home operators. City employees contacted the 84 potential scofflaws identified in the audit, and most either paid their taxes or explained why they were not on the tax rolls, such as because they no longer operated the property as a rental.

Vacation-rental homes in Bend currently must apply for land use approval from the city, which includes a fee of $454. Each home must have at least one off-street parking space per bedroom and, as with everyone else in the city, the occupants must comply with the city noise ordinance.

Many cities across Oregon have already adopted regulations on vacation homes, according to the city attorneys’ memorandum. Ashland prohibits the rental of homes in single-family residential zones for periods of less than 30 days, although the city recently began working on proposed changes to allow vacation rentals if the property owner lives onsite and meets other conditions.

On the coast, Manzanita allows vacation-home rentals throughout the city but capped density at 17.5 percent of homes citywide, while Depoe Bay banned all vacation-home rentals except in commercial zones and on a couple of specific oceanfront lots. Seaside designated specific neighborhoods where vacation rentals are prohibited, Cannon Beach created a rental permit program and capped the total number at 92 — the number that existed in 2004, the year the cap took effect — and Tillamook County commissioners adopted an ordinance that regulates issues such as quiet hours, garbage removal and parking, according to Bend city attorneys.

The city of Portland did not allow any short-term rentals in residential zones until the end of July, when the City Council approved an ordinance to legalize one- and two-bedroom vacation rentals in private homes. Property owners in Portland must obtain a $180 permit and inspection of the property, as well as notify their neighbors.

There are no cities in Oregon with moratoriums on vacation-home rentals, and there does not appear to be a basis in state law for a moratorium. However, the attorneys also wrote that they could not find a law that specifically disallowed a moratorium.

“So far, Oregon courts have not spoken to this particular issue,” city attorneys wrote in the memo. “Accordingly, to implement a moratorium or pause on issuing vacation home rental permits is not without risk.”

Mayor Pro Tem Jodie Barram said this will likely be a time-consuming issue that the city will continue working on in 2015, with the city’s planning commission also likely gathering input from the community this fall. “There’s a public involvement process to be followed, and we don’t have enough data yet,” Barram said.

City Councilor Mark Capell said residents have contacted him to share both positive and negative experiences with vacation-rental homes.

“A couple of folks have said, ‘We don’t think this is good for our neighborhood, and we don’t like it, and put a stop to it,’” Capell said. “But then other people have said it’s a big improvement over the long-term rentals because (vacation homes are) kept up better.”

Dennis O’Shea, a board member with the River West Neighborhood Association, said few people raised concerns about vacation rentals at an association meeting on the topic earlier in the summer. A couple of residents who attended the meeting did discuss “losing the neighborhood feel,” as well as problems with parking and noise, O’Shea said. However, a couple of other property owners in the neighborhood later contacted the association and said they had a different view on the subject.

After all, Bend continues to rely on tourism as a major economic driver. According to the most recent data available from the Oregon Employment Department, 13 percent of jobs — or nearly 6,400 — in Bend fell into the category of leisure and hospitality during the third quarter of 2013, said Regional Economist Damon Runberg. That’s two percentage points higher than the state average of 11 percent.

“It’s not all we are, but it’s part of our economy, and it’s a very important part,” Runberg said. “Our high quality of life, which people see because they’re visiting as tourists, really has helped the city grow and sustain in other ways outside tourism.”

Back on NW Riverfront Street, Kelly acknowledged there are some problematic vacation homes, such as a larger home on the street that regularly has nine or 10 cars in the driveway. But Kelly said city officials should distinguish between the problem properties and those that function well. Kelly believes if existing property owners were prohibited from renting their second homes to tourists, it would not protect these old neighborhoods. Instead, it would bring a different type of change.

“I also think that a lot of the old mill houses that are vacation rentals would get torn down and replaced with McMansions, if they were not allowed to be vacation rentals,” Kelly wrote in an email.

“We used to have a really, really tight neighborhood,” Kelly said later in an interview. “And it still is; it’s just not like it was. … Prices have increased. I bought my vacation rental (house) for $135,000. It was a different world then.”

— Reporter: 541-617-7829,