Accessory Short-Term Rentals: Changes in City rules and enforcement methods needed to increase equity and effectiveness

Our investigation found that more than half of operators affected by the highest fines may belong to systemically excluded communities, which would conflict with Portland's Citywide Racial Equity Goals & Strategies. They commit the City to end racial disparities within City government and to use a racial equity lens when changing the policies, programs, and practices that perpetuate inequities. In addition, equity is one of the City's Core Values, which include a commitment to respect the value and contributions of community, including but not limited to Black, Indigenous and people of color, people with disabilities, older adults, younger adults, LGBTQ+, and immigrants and refugees.

Investigation Findings

Portland's short-term rental fines far exceed those in comparable cities and are not preceded by a warning, unlike in other jurisdictions. The large fines have caused financial and emotional harm to short-term rental operators and may be disproportionately impacting operators belonging to systemically excluded communities, which would conflict with the City's equity goals and values.

The pricing structure of the two primary permits may be discouraging operators from taking out Type B permits even though they are renting out more rooms and allowing more guests than the Type A permit allows. And the residency requirement includes a work-around that can make it challenging to enforce.

City officials say proactive enforcement has reduced the number of violators. But the Bureau continues to prioritize investigating complaints from the public even though less than half of complaints result in citations. Continuing to rely on a complaint-based system may also disproportionately impact members of systemically excluded communities.

Measures that could improve enforcement include requiring operators to regularly provide booking data, using a third-party company to obtain addresses, and adopting a hard cap on the number of nights that dwellings can be rented. Such measures would help the City ensure that short-term rentals remain an accessory use of properties while reducing the inequitable impacts of the complaint-based system.

Portland is an outlier with large fines and a lack of warnings

Portland's biggest distinction from other cities we examined is its approach to fines. Other jurisdictions start with warnings before proceeding to fines. When warnings do not result in compliance, most jurisdictions start by citing a single violation. San Diego and Sacramento issue two warnings before imposing a fine. In San Diego, the fine for a first violation is $1,000. Minneapolis and Sacramento start at $500. Portland, Maine imposes a fine of $100 per day if a violation persists after a warning letter. An operator in San Diego who ignores multiple warnings and fines can eventually be subject to a court proceeding that can result in a penalty of nearly $23,000. San Diego has taken that action twice in the two and a half years the city's rules have been in effect.

One city we looked at, Nashville, has an arguably harsher penalty than Portland. The ultimate penalty for repeatedly refusing to comply with Nashville rules is 10 days in jail per violation. Nashville has issued that penalty once. The operator was sentenced to 120 days in jail, but the judge only made them serve 10. 

Figure 2. No jurisdiction's maximum fine for first-time violations comes close to Portland's

View full size image of Bar chart comparing the maximum fine for first-time violations in Denver, Minneapolis, Portland, Sacramento, and San Diego. Portland stands out with the largest fine: $27,513.

Heavy-handed enforcement harms community members

Several short-term rental operators we spoke with said the City's enforcement actions financially and emotionally devastated them. 

Some operators facing more than $20,000 in fines told us they had to sell their properties to pay the City fines. One entered into a payment plan with the City, which charges a 12% interest rate. One operator with more than $19,000 in fines sold the property, which had also been their primary residence, and moved in with one of their children. Another operator with more than $100,000 in fines removed $50,000 from their retirement savings and paid a penalty for early withdrawal to meet the City's payment deadline, after which the fine would have doubled. Two operators with fines over $19,000 said the amounts came on top of major medical bills because of life-threatening and terminal illnesses. 

We also found that people belonging to systemically excluded communities may have been disproportionately impacted. Forty percent of the operators who were fined at least $10,000 told us they identify as non-white, have a recent history of immigration, or belong to the LGBTQ+ community. The percentage who may be non-white, LGBTQ+, or have a recent history of immigration may be approximately 55% of the total based on additional proxy data such as last names. 

One reason that enforcement might fall disproportionately on people of color and immigrants is the Bureau's complaint-driven enforcement process. The Bureau investigates every complaint it receives from the public about possible violations of short-term rental rules. A 2021 Ombudsman report found that complaint-based enforcement of property maintenance regulations disproportionately affected communities of color and neighborhoods vulnerable to gentrification. A follow-up report in 2025 found that the Bureau had taken limited steps to address some of the harmful impacts of enforcement, but had resisted fundamentally changing the complaint-based approach.

Community members said large fines caused financial and emotional hardship 

• L.T.: "This is inhumane." L.T. has a terminal illness that requires extremely expensive medication and treatment. To generate additional income, L.T. moved into the basement of their house and took out a Type A permit in 2022. Two years later, L.T. learned that they needed a Type B permit because they were renting more than two bedrooms. They sent in the application and a check for the $8,576 fee. Less than two months later, L.T. received a letter saying that they were in violation of their Type A permit and that they were fined $19,307. L.T. believes someone in the City who was processing their Type B application turned them in. L.T. called the City and explained their precarious financial situation. They said they had voluntarily initiated the Type B process and begged for a reduction. City officials refused. L.T. ended up taking out a second mortgage to pay off the fine. "I felt like the City of Portland is the same as the Sopranos," L.T. said. "I hate the City for doing this." 
• J.J.: "I felt like I was talking to a collections agency." J.J. was on a list for a heart and kidney transplant. They moved with their spouse and two children to a rental house near the hospital because J.J. had so many medical appointments. Since they didn't know how long they would be gone, they decided to list their home as a short-term rental. They failed to get a permit, and in late 2024 they were fined $96,524. J.J.'s spouse called the City and explained that they had $65,000 in medical bills and requested relief. City officials said no. After the Bureau put a cap on violations, it reduced the fine to $19,307. When the Ombudsman spoke with J.J.'s spouse in late August, they didn't know how they would be able to pay the fine.

Flawed City rules result in ineffective enforcement

Our investigation found that the City's short-term rental rules contain flaws that undermine the City's efforts to keep short-term rentals as an accessory use of properties. A change in 2024 resulted in a modest increase in operators cited, but a more significant financial impact on a handful of operators. The burdensome requirements and high cost of Type B permits appear to incentivize operators to take out the cheaper, easier Type A permit even though they are renting out more rooms and allowing more guests than that permit allows. And the structure of the residency requirement makes it difficult to enforce. 

Advertising rule caused a modest increase in operators cited but resulted in harsher punishment

The introduction of the advertising rule was designed to make it easier to catch operators who are violating bedroom and guest limits because Bureau officials only need to check online advertisements. However, the rule's main impact appears to have been increasing the financial consequences for the small number of operators who were cited. As a result, some operators went out of business entirely, even though the goal of enforcement should be that more operators are following the rules.

The number of operators cited increased just 9% during the nine months after the rule went into effect. Compared to the previous nine months, only six additional operators were issued citations. The total amount of fines, however, increased by 112% during the same period. The biggest fines were financially crushing a handful of operators: seven operators were fined a total of $508,814. We intervened before any of the operators paid their initial fines. The total was later reduced to $143,418. 

Cost of Type B permits may discourage operators from obtaining them

City permitting rules require operators to obtain a Type A or Type B permit, depending on how many bedrooms they are renting out. Type B permits are over 23 times as expensive as Type A permits and require a land-use review process. We found evidence that the cost of Type B permits may be deterring operators from obtaining them even though the operators are renting out more than two bedrooms. Experts we consulted agreed. This means that the City uses enforcement resources to go after operators who violate permit rules when the City's two-tiered permit structure and wide gap in cost may be incentivizing operators to take out the wrong permit. 

Figure 3. Type A and Type B permits differ significantly in cost and income potential for operators

View full size image of Illustration comparing Type A permits and Type B permits. Type A permits are depicted using a smaller dwelling with two windows, while Type B permits use a larger dwelling with 5 windows.

One indication that many operators are taking out the wrong permit is the distribution of Type A and B permits. Over 90% of the listings have Type A permits. This does not square with Portland's housing stock. Sixty-two percent of housing units in the Portland metro area have three or more bedrooms, according to the U.S. Census Bureau's most recent American Housing Survey. If short-term rentals in Portland have the same bedroom distribution of all housing units, then there is a high probability that 55% of all short-term rental permit holders have a Type A permit when they should have applied for a Type B. 

Enforcement records also suggest that people are taking out Type A permits and violating the bedroom and guest limits. All but one of the operators cited since the new rules went into effect in 2024 were hit with violating Type A guest, bedroom and advertising violations.

We spoke to two economists who said the cost difference between the permit types was likely encouraging cheating. 

"The city is pushing people towards Permit Type A," said Elizabeth Linos, the Emma Bloomberg Professor of Public Policy and Management at the Harvard Kennedy School. "It's a real financial incentive in the design."

Stefano DellaVigna, the Daniel E. Koshland Senior Distinguished Professor of Economics and Professor of Business Administration at the University of California, Berkeley, described the cost difference between the Type A and Type B permits as a classical pricing problem.

"It clearly incentivizes people with three bedrooms to make it look like they have only two. Rebalancing the amounts would seem to help."

Some other cities have multiple permit types, but we did not find any with such substantial cost differences or any permit remotely as expensive as Portland's Type B. San Diego has a permit that is similar to Portland's Type A permit and costs $284. San Diego also offers a permit that allows a dwelling to be rented full time without a full-time resident, which offers substantially higher income-earning potential than Portland's Type B permit. That permit costs $1,129.

Residency requirement is difficult to enforce

The full-time residency requirement is the cornerstone of the City's rules, because it is designed to prevent investors from turning homes into hotels. Yet the requirement is difficult to enforce. While it is relatively easy for an operator to establish residency and obtain a permit, it can be time-consuming for the Bureau to investigate complaints that a dwelling lacks a full-time resident. Hurdles include a lack of booking information and the work-around that allows an operator to rent a dwelling beyond the 95-day limit if a resident is on the premises. 

Booking information is key to determining if an operator is renting a dwelling for more than 95 days per year and violating the residency requirement. However, short-term rental platforms refuse to provide booking information voluntarily. This greatly limits the Bureau's ability to proactively investigate possible violations. Instead, the Bureau relies on complaints. City rules require operators to turn over booking information when the Bureau requests it. One solution could be for the Bureau to require operators to provide booking information on a regular basis. The City could then focus its investigative resources on operators with more than 95 days of bookings per year. 

But operators' booking information isn't always enough to prove a violation of the residency requirement. That's because the operator can claim they were on the premises for bookings beyond the 95-day limit. City officials say that short of surveillance video, it is often nearly impossible to prove an operator was not present in the dwelling. 

City's efforts at proactive enforcement are an improvement but remain limited 

The City's enforcement efforts prioritize reacting to complaints from the public, despite evidence we found that relying on complaints is inefficient. The City has stepped up proactive enforcement in recent years but the third-party data it uses to identify violators is limited. Using more robust data that includes listing addresses could help the City use its enforcement resources more efficiently and reduce reliance on a complaint-based system that has been shown to have inequitable impacts. 

Less than half of complaints result in citations, according to City data. We reviewed 417 complaints the Bureau received from July 2023 through June 2025. Only 46% resulted in citations. One example demonstrates the inefficiency of prioritizing public complaints: the Bureau received complaints about 24 short-term rentals on one day in July 2024. Only one complaint – just 4% of the total – resulted in a citation. City officials noted that the data we reviewed may not reflect all complaints filed about short-term rentals due to variations in how information is entered in the City database, but they said the data accurately reflects which complaints resulted in citation.

City officials say their decision in 2024 to begin using third-party data to conduct proactive enforcement has enabled them to compare operators' advertising to what is allowed under their permits and identify operators who violate the room and guest limits. It has also reduced the number of dwellings without a valid permit because officials can compare the permit numbers provided for all listings with City-issued permit numbers.

The Revenue Division uses third-party data to delist 25 to 40 dwellings that have invalid permit numbers each month. In some cases, invalid permit numbers are the result of a data entry error on the part of a valid permit holder. More often, invalid permit numbers are false numbers that operators use when they don't have valid permits. Short-term rental platforms allow operators to post listings without checking whether the permit numbers are valid. Even after their property is delisted by Revenue, some operators continue to violate the rules by immediately relisting their property with another invalid permit number. 

The City's ability to enforce against operators without valid permits is limited because the company the City contracts with to obtain data does not collect addresses of listings. As a result, the City can't issue citations to those with invalid permit numbers. 

We found three companies that claim to be able to provide the addresses of all listings, which would help the City to cite operators with unpermitted dwellings. A Bureau official said they looked into one of the companies several years ago but did not engage because of cost and questions about the reliability of the data. 

Other cities provide examples of more effective enforcement

All jurisdictions we surveyed described varying degrees of difficulty in enforcing the rules for short-term rental operators, especially the full-time residency requirement. The refusal of platforms to provide booking data deprives cities of information that would make enforcement of residency requirements easier. A hard cap on the number of nights a unit can be rented would make enforcement much easier, and help ensure that short-term rentals are an accessory use of properties, so that homes remain available for long-term renters and homeowners.

Several cities said they had found ways to successfully enforce their rules: 

• Denver, Colo. focuses on proactive enforcement of its residency requirement. It systematically reviews whether the residency requirement is met during the permit application and renewal processes using operators' utility bills, hunting and fishing licenses, property ownership in other states, and social media. 
• Portland, Maine, and Nashville, Tenn. use third-party companies that provide them with permit numbers, addresses of all listings, and the number of days they appear to be rented. This allows them to proactively identify and investigate potential violators. Nashville officials said having addresses and booking information for all short-term rentals makes it much easier to catch rule-breakers. They estimate that their permit compliance rate is greater than 95%. 
• Sacramento, Calif. obtains data from operators to help authorities enforce residency requirements. The City requires operators to provide their booking information on a quarterly basis.
• Portland, Maine tries to reduce the incentive for operators to break the rules by allowing a limited number of full-time rentals. This strategy also may help meet the market demand for whole houses with no resident present. 

Regulators across the country agreed that a hard cap on the number of nights a unit can be rented annually would make enforcement of the residency requirement substantially easier. A hard cap – particularly in conjunction with requiring operators to provide booking information – would leave the Bureau with just one thing to prove: how many nights the dwelling was rented. 

Several regulators we interviewed said they had proposed a hard cap, but short-term rental platforms successfully lobbied city councils and state legislators against it. Our research found a small community in Maine that had adopted one, but there may be others. 

Recommendations

To end the harm of large fines, align short-term rental enforcement with the City's equity goals and values, and improve efficiency and effectiveness of enforcement efforts, we recommend that the Bureau: 

1. Reduce harm. Issue a one-time warning to first-time violators and reduce the maximum fine for first-time violators to no more than one first-time violation in each category for a total of $7,255. This should be applied retroactively to the beginning of 2024, when the Bureau fined 20 operators more than $10,000 each.
2. Prioritize proactive enforcement. This could include obtaining listing addresses from a third party or booking information directly from operators. 
3. Reduce incentives to take out the wrong permit. This could include reducing the cost difference between Type A and Type B permits or eliminating the distinction altogether.
4. Simplify enforcement. This could include measures such as placing a hard cap of 95 days on short-term rental bookings with no exceptions for the resident being on premises. In conjunction, the City could address the market demand for full house rentals by allowing a limited number of them.

Response by Deputy City Administrator for Community and Economic Development 

Read the response from the Deputy City Administrator for Community and Economic Development