The average Portlanders’ expenses are already 12.8 percent higher than the national average. To solve this problem, local activists, including the Maine Democratic Socialists of America, worked to put Questions A through E to voters this November. Unfortunately, none of them would make life easier for Portlanders.

A sign directs voters to East End Community School in Portland on Election Day in 2021. This year, Portland residents will be facing a proposal to end the restaurant tip credit in favor of an $18-an-hour minimum wage; two competing questions on short-term rentals, and a proposal to enhance tenant protections, including further limits on the amount of annual rent increases. Ben McCanna/Staff Photographer

ABOUT THE AUTHOR

Nick Murray is director of policy at Maine Policy Institute, a free-market think tank based in Portland.

Thankfully, the DSA recently withdrew support for Question E, which would limit cruise ship disembarkation to 1,000 people per day. They abandoned their creation after learning how much it would harm longshoremen and other workers. They would do well to speak directly to those affected by other policies they’re pushing on the city.

Dozens of Portland service workers have spoken out against Question D, which would swap lucrative tips for a far-from-guaranteed pay raise under a higher minimum wage. What’s more likely is that, as business costs rise, some servers will lose their jobs while those who made the most in tips have their earnings reduced.

Questions A through C would place more restrictions on private short- and long-term rentals. None would make Portland more livable by any stretch of the imagination.

Portland’s current ordinance governing short-term rentals prohibits individuals or entities from owning more than five. It limits non-owner occupied units on the mainland to 400, with no limit on the islands. Hosts must register with the city, which doles out $1,000 fines to ordinance violators.

Question A, proposed by several current short-term rental owners, would hamper development in a city that thrives on tourism, but only for newcomers to the short-term rental market. It smacks of protectionism.

Question A restricts who can own short-term rentals while grandfathering in everyone operating one today. It bans corporate ownership and limits registration to “local residents” who live within a 20-mile radius. In other words, Auburn residents couldn’t invest in a short-term rental in Portland. Why?

Instead of economic illiteracy from socialists, Question A is more accurately described as a classic alliance of “Baptists and bootleggers.” In this case, the “Baptists” are the ideologues who welcome any new regulation because they falsely assume short-term rentals significantly impact the housing market. The “bootleggers” are those who financially benefit from Question A’s passage: existing owners.

But if Question A is bad, Question B is even worse.

Question B would tighten existing limits on short-term rentals and raise fees on all registrants. It would restrict all non-owner occupied units in the city (including the islands) to 250 or 1 percent of long-term rentals, whichever is fewer.

It would also tighten rules on owners by redefining a violation as every new day a unit is noncompliant. They do this in hopes that units forced off the market become long-term housing. But even if the fines squeeze owners, zero guarantee exists that they’ll convert short-term rentals to long-term rentals. This is wishful thinking with potentially destructive consequences, and could seriously backfire considering the measure couldn’t be changed for five years if approved.

Question C similarly attempts to cure the housing crisis but mistakenly assumes landlords are the problem. The issue of high rents is primarily one of supply; the city needs more building. Unfortunately, ordinances like the “Green New Deal” have led to a dearth of new applications to build.

Renters and owners alike have expressed dismay at limits on rental agreements governed by a formula that controls rent increases, passed in 2020. This measure also established a Rent Board that must approve increases above the formula’s limits, even if an owner is trying to recoup costs from updating a unit (and leading many to raise rates the full amount of rent allowable).

Under the measure, landlords would only be able to increase rent to 70 percent of annual inflation. This would not spur more building, but would disincentivize investment in rental properties and lead to significant degradation in the quality of available housing.

DSA members should speak with hosts and landlords instead of the caricatures they draw in their chatrooms. If they did, their flimsy arguments would fold under the pressures of reality, just like they did on Question E.

All five questions would be equally destructive if passed. Voters would be wise to look beyond their surface-level arguments because the DSA fundamentally misunderstands how the economy and markets work.