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VRBO's rentals irk city

The city of Ashland is cracking down on homeowners who are running under-the-table lodging operations.

The homeowners get money for letting tourists stay in their houses, but they lack city business licenses, don't undergo Jackson County health and safety inspections and aren't paying the city's 9 percent lodging tax or the state's 1 percent lodging tax, according to city officials and licensed bed-and-breakfast inn owners concerned about the practice.

Sites such as www.vrbo.com, which stands for Vacation Rentals By Owner, have made it easier than ever for people to rent out their homes to tourists for short stays.

The popular website reaches an international audience. Earlier this week, it had more than 100 Ashland-area properties listed, with many promising short walks to local theaters, renovated rooms, stunning views and amenities such as hot tubs.

The homes ranged from studio apartments to full houses, many with cottage, Victorian or craftsman architectural features. Nightly rates ran the gamut, from $50 to $600.

The website also lists legitimate, licensed businesses, including established bed-and-breakfast inns.

For several years, the city has done regular checks for unlicensed lodging operators, said Community Development Department Director Bill Molnar. But this year, it is stepping up its enforcement efforts, he said. "In the last year or so, we're seeing more and more of this going on. We've had additional complaints from people in the lodging industry and neighbors," Molnar said. "We've taken a harder line."

Bed-and-breakfast inn owners sometimes check vacation rental websites and turn over information about unlicensed operators to city officials. Neighbors see strangers coming and going — often in cars with out-of-state license plates — and notify the city, as well, Molnar said.

Homeowners in zones reserved for single-family homes are not allowed to run lodging operations under city laws.

They can, however, rent out their homes for one month at a time or longer, he said.

Some people offering stays through vacation rental websites list one-month or longer rentals that are legal even in Ashland's single-family zones. Others offer nightly or weekly stays, according to a check of sites.

Earlier this month, the city sent out about 20 letters to homeowners offering short-term lodging in single-family zones, telling them they had to stop, Molnar said.

Many of those homeowners since have contacted city staff members, promising to stop or asking how they can keep operating, he said.

The Ashland City Council would have to change planning laws to allow lodging in single-family housing zones for those operations to become legal, Molnar said.

In multi-family housing zones with parking and good access to major streets, homeowners can qualify to become lodging operators by going through a land-use process and paying about $1,100 in planning fees, Molnar said.

Multi-family zones allow for structures such as apartment buildings.

Next week, the city plans to send out 25 to 30 letters to unlicensed lodging operators in multi-family zones, letting them know they either have to stop operating or go through the land-use process and win approval, Molnar said.

Molnar estimated that, on average, each unlicensed lodging operator is costing city coffers almost $700 annually in unpaid lodging taxes.

No one knows exactly how many unlicensed operations are in Ashland.

Taxes on hotels, bed-and-breakfast inns and other lodging facilities help support city operations such as police and fire departments. The money also funds tourism, economic and cultural development, and sustainability grants to groups such as the Ashland Chamber of Commerce, Oregon Shakespeare Festival and Ashland Independent Film Festival.

David Runkel, innkeeper for Anne Hathaway's B&B and Garden Suites with his wife, Deedie Runkel, said cities from coast to coast have had to crack down on unlicensed operators who are dodging lodging taxes.

Some even brag on vacation rental websites that tourists will not have to pay local or state lodging taxes, said Runkel, who also sits on the Ashland Citizens' Budget Committee.

Runkel said licensed operators in Ashland have to carry insurance, pay for appropriate licenses and undergo health, fire and safety inspections. He said unlicensed operators pose safety risks and aren't competing on a level financial playing field with licensed operators.

Just recently, Runkel noted that members of Ashland's Bed and Breakfast Network had a tutorial with Ashland Fire & Rescue Fire Marshal Margueritte Hickman about flammable materials.

"One of the concerns of the Bed and Breakfast Association is if people come and have an unhappy experience at an unlicensed place, it will rub off on everyone else," Runkel said. "If people go home and say to their friends and family, 'Be careful! Places in Ashland are not safe or clean,' that impacts the whole industry."

He said proliferating lodging operations also can have an impact on neighborhoods that weren't designed to handle the excess people and traffic.

Molnar said the city generally doesn't want lodging operations tucked away in neighborhoods on small streets without sufficient parking.

But lodging operations can net money for their owners, and those owners in turn often maintain their homes well and spruce up their properties, improving Ashland's overall appearance, Molnar said.

In the 1980s, Ashland changed its zoning rules to allow lodging operations in multi-family zones. That gave many homeowners — especially those with historic houses — the financial wherewithal to rehabilitate their homes, he said.

Molnar said the city needs to balance those benefits with the rights of long-term homeowners and renters to live in relatively peaceful neighborhoods.

The city's latest crackdown on unlicensed lodging operators may cause many homeowners to stop offering their houses illegally to tourists, but Molnar said the proliferation of vacation rental websites will likely tempt many back into the unlicensed lodging game.

"We've done sweeps before and we get some compliance. Then we check a website, and a listing pops up again," he said.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.