Growth in short-term rentals compared to new unit growth

Two years into the city’s vacation rental rules came into place, City Administrator Chad Sweet provided an update on short-term rental permits at the Aug. 7 City Council meeting.

The rules brought limits on the transfer of short-term rental permits through sale. “It is the intent that the sale of homes with a rental permit will result in gradual attrition of the total number of dwellings with a vacation rental permit,” the ordinance states.

The numbers are dropping.

Starting at 98 permits at the start of the program in 2017, the number of permits dropped from 81 in 2018 to 79 now. Gearhart’s rules limit the transfer of permits through sale.

Despite the slide in the number of permits, revenue generated from those permits is on the rise. Total transient tax received has risen from $294,000 in 2017 to about $345,000 this year. About $211,000 or 61% of that comes from hotels and motels in Gearhart; residential property and condos make up the difference.

Application fees, however, have diminished, from an initial $46,900 to zero in 2018-19, as “we’re not taking any application fees in the R-1 zone,” Sweet said.

The city saw collections of $38,000 from renewal fees of $600 per property in 2018-19.

Permit fees stood at $5,800 in the month of July and the city has collected $82,000 in transient room tax year-to-date in the 2019-20 budget season.

This year, the number of complaints has dropped to six from a high of 15 in 2017-18. “Most of all complaints we took were taken care of,” Sweet said.

Noise, parking and barking dogs “have really been the crux of the issue,” he said.

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