At one time or another, it seems most people have stayed in an Airbnb or similar short-term rental, collectively known as STRs in code speak. On October 25th, 2023 the Hillsboro Planning Commission held a public hearing about updating the City of Hillsboro Community Development Code to restrict STRs and the number of them that people can own and operate. There are some concerns that investors and property owners who choose the short-term rental model over long-term rentals are exploiting the market. As a busy real estate broker this discussion comes up often. With Oregon’s rental protections and no eviction & rent control laws, there are plenty of reasons not to want to be a landlord. Short-term rentals are technically never for more than 30 days. As a result, the tenants staying there are not protected by tenant laws. STRs are a commercial use, just like a Hotel room. The problem is residential neighborhoods are not zoned for that sort of use.
I have looked at this topic over the years and have noted that at any given time there are as many as 400 STRs in Hillsboro, Oregon. When I served on the Planning and Zoning Hearings Board we approved maybe 3 or 4. So there is a vast majority of STRs that are unpermitted and operating illegally when it comes to compliance with City codes. When questions were asked about the revenues paid by these units, the response was that taxes were being paid by Airbnb and all such rentals. Hillsboro has a Transient Lodging Tax of 3% as per the code- https://library.qcode.us/lib/hillsboro_or/pub/municipal_code/item/chapter_3-subchapter_3_38-3_38_020. It is hard to believe that taxes are collected on many short term rentals because enforcing that is very difficult.
As the Planning Commission grappled with this they identified two categories. 1) Partial Dwelling STRs where the owner is offering part of the residence for rent, and 2) Full-dwelling STRs which is a rental that is the entire property. Having prefaced that let’s take a look at what the proposed new code is.
Planning Division staff has developed draft CDC text that creates a hybrid approach to regulating STRs.
- Partial-dwelling STRs will be permitted under Type I review procedures, and
- full-dwelling STRs will be permitted under the Type II review procedures.
Type I permits can usually be issued over the counter, or within a few days of submittal; the criteria
are clear and objective and there is no requirement for public notice or opportunity for appeal
by the general public.
Full-dwelling STRs would require approval of a Development Review application, which is a Type II review. A Development Review application requires public notice to property owners within 200 feet, a 2-week public comment period, and the staff decision can be appealed to the Planning Commission.
Staff expects this review structure to attain the highest level of compliance while balancing an appropriate level of public notice and impact on
staff resources. The STR amendments, which are included in Exhibit A, also propose the following:
• Prohibit commercial activities such as weddings and conferences at STRs;
• Clarify that the operator of a partial-dwelling STR must live on the same property as the
• Prohibit more than one rental at a time on any STR property; and
• Prohibit the owner of a full-dwelling STR from operating more than one full-dwelling STR
Like with any new code, the devils are in the details. The Full-Dwelling STR path is going to mean that anyone wanting to rent their whole residence as a Short Term Rental (STR) needs to get the acceptance of all of their neighbors. Those neighbors have the right to appeal any approval to the City, but the process is both lengthy and costly. People have a right to know and decide if an STR is better than a more traditional long-term tenant.
What is this last restriction about the STR owner only having one in the City? That seems to not be realistic nor driven by anything definitive other than to stop STRs. The fact is any owner wanting more than one will just use an LLC for each property which makes each property a different owner.
The Staff Report submitted to the PC included these bullet points to explain the “Why” of all of this.
Key considerations for this project include the following:
• Updating the CDC to address current land use trends.
• Integrating a commercial use in residential zones while maintaining neighborhood
• Efficiently balancing staff and hearing body resources.
• Limiting impacts to housing availability and affordability.
The biggest fear that housing advocates, including myself, have is that the STRs take away from our inventory of rentals to our residents. I can say that this is a factor, but it has not proven to be a threat. Analysis provided by the City in this process showed that 1 to 1.5% of the housing in a city is affected by STRs. I think there are many good aspects to having a healthy selection of STRs. They provide a much better alternative to vacation and other short-term users than hotels do. They also allow for economic vibrancy in areas like Downtown Hillsboro where there are no hotels. I have referred clients coming to visit their children here in Hillsboro to local Airbnb owners with great results. So I believe that organically they are a good thing for Hillsboro. Maybe I would sure feel different if we had a home at the beach or the mountains where residential neighborhoods get disrupted horribly.
The City Council will take up this decision soon, and if you are worried or have input make sure you attend and make your voice heard. This ordinance only had 1 person show up to comment at the Planning Commission- and that is a sign that people still do not hear or know what is happening here in Hillsboro. Here is the Ordinance-