November 12, 2019
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Bar Harbor will let residents rent out rooms in their houses to bolster affordability

Bill Trotter | BDN
Bill Trotter | BDN
A woman walks along School Street in downtown Bar Harbor toward local hotel employee housing on July 22, 2019.

Now that Bar Harbor voters this week have legalized the practice of renting out rooms in houses to visitors, the popular tourist town is pressing ahead with other measures aimed at making housing more available and affordable to year-round residents.

The town continues to work on a proposal to allow the development of dormitory-style housing for employees of local businesses, though the Town Council decided in July to keep that proposal off this year’s November ballot. It’s also moving forward with enforcing its requirement that owners of vacation rental properties — which can be leased for between five and 30 days — register with the town and pay an annual registration fee.

Town officials also hope to hire a consultant to conduct a comprehensive housing study in Bar Harbor that will show how housing in town is used — whether as rental property or as a homeowner’s full-time residence — and what it costs.

The idea is to find out what else the town can do, if anything, to help boost the scarce availability of affordable housing in Bar Harbor. Housing prices are high on Mount Desert Island as a whole — and often out of reach for young families — because landlords can make more money renting out houses by the week to summer tourists than they can to year-round residents.

The supply is further aggravated by the fact that some business owners, who cannot build dormitories for their employees, buy houses or apartments in the downtown village so their workers can live there.

Before Tuesday, Bar Harbor residents were barred from renting out individual rooms in their houses for between five and 30 days, even though many local homeowners have been doing so for years. Renting out entire dwellings, whether houses or apartments, as vacation rentals was and still is allowed.

The town’s move to allow homeowners to rent out individual rooms was a recognition that many residents have come to depend on the income from the rentals, said Michele Gagnon, the town’s planning director.

The vote “simply allows people that want to rent a room in their dwelling to do so legally,” she said. “The idea is that we heard that [the practice] helps people bridge their income, and if you are renting a room in your house, probably this income is important to you.”

By legalizing this type of rental, which many residents had kept hidden from town officials, and requiring people who do it to register with the town, town officials hope to get a better sense of how common the practice is.

Despite Bar Harbor’s requirement that vacation rental property owners register with the town, not all of them have done so, town officials have said.

The town has been taken to court before, and lost, after it tried to restrict where vacation rentals would be allowed, and now another pair of homeowners has filed a lawsuit over the town’s vacation rental requirements. Jonathan Eno and Karen Gilfillan-Eno, who own a waterfront property in Hulls Cove, are challenging the town’s annual $250 registration fee for vacation rental property owners.

In their complaint, the Enos argue that the amount is unnecessarily high for covering the costs of administering the registry program and therefore constitutes an illegal tax. The Enos’ house on Lookout Point Road, which sits on 4 acres and has five bedrooms, has an assessed value of $1.53 million and is listed for sale for almost $2 million.

The town, however, maintains that it has had to hire additional employees to maintain the registry, help the town’s volunteer planning and design review boards, and help with other housing-related responsibilities.

The lawsuit is pending in the state’s Business & Consumer Court in Portland.

Despite the legal challenge, the town is pressing on in hopes that it will find a way to alleviate the local housing shortage. On Wednesday, it held a public informational meeting on the proposed employee dormitory rules, which town officials hope to submit to voters for approval next June.

 



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