A pocket of nearly 10 VRBO and AirBnB rentals is centered near the western entrance to George Fox University.

The number of vacation rental homes, facilitated by the wildly popular VRBO and Airbnb websites, is growing in Newberg — of that, there can be no question.

But plenty of questions persist as to how the city should handle the surge.

The topic has garnered considerable attention by the Newberg City Council, planning commission and community development department of late.

After lengthy debate and receiving a report from the city, the planning commission voted in early August to recommend the council establish a 120-day moratorium on processing new vacation rental home applications.

But the council, meeting in early September, appeared to have little stomach to enact a moratorium — at least not yet.

“People are really serious about their property rights,” Councilor Robyn Wheatley said. “That’s what I mainly heard is ‘don’t take away my property rights.’”

However, she also noted that she’s heard from people who live adjacent to short-term rentals that their neighbors “don’t behave very well and it interrupts the neighborhood.”

Wheatley suggested the council await a report, expected to be delivered by city staff in October or November, on the issue before making a decision.

Councilor Mike McBride concurred, but for a different reason, saying that people renting these houses are buying gas, food and infusing money into the local economy. He added he didn’t see it as a major issue in the community, unlike what has occurred in Lincoln City. After seven years of controversy, Lincoln City enacted a small limit on future licenses for short-term rentals.

Councilor Elise Yarnell Hollamon said she struggled with the “lack of consistent” neighbors promulgated by short-term rentals but admitted that tourism will likely play a big part in the future of the town.

Hollamon also acknowledged that a moratorium would set a precedent and urged the city to enforce its codes to address some of the issues that have arisen, including developers who have launched multiple short-term rentals in the community.

Councilor Molly Olson suggested the council wait for the staff report to discern whether a moratorium is needed. She added that should the council decide to go that direction, it would take months to draft the justification required by the state.

How did this all get started?

Newberg planning manager Clay Downing said the concept of a moratorium originated within the planning commission after receiving city officials’ assessment and input from constituents.

“Although the commissioners likely have their individual reasons, during public hearings, it has been identified that the rate of short-term rental applications has increased and remained high since 2020, that various members of the public have made public comments expressing concern about the increasing number of short-term rentals, and that the planning commissioners felt the existing policies required the city to approve the vacation rental home applications despite citizen concerns,” Downing said in an email.

Downing added: “In essence, the commissioners seem to feel that their hands are tied, yet they want to listen to and be responsive to the concerns of Newberg residents.”

The growing number of short-term rentals seems to conflict with the long-term housing goals of the city.

In May, the City Council accepted the Newberg Housing Production Strategy, which hopes to expand and preserve housing in the community.

Included in that strategy is a recommendation that the city “consider restrictions and conduct inspections on short-term rentals,” Downing said.

“According to the Housing Production Strategy, there is growing concern from residents and staff members about the increase in the number of short-term rentals in Newberg,” he added. “Vacation rental homes typically occupy units in residential areas that would otherwise be used for long-term housing, decreasing the supply of housing available for residents.”

Beth Keyser disagrees. Testifying at the September council meeting, the owner of the Bellagio VRBO short-term rental on Hoskins Street said the city would be overstepping its mandate by invoking a moratorium.

“I consider the mayor and city council to have a role of protector of our health and safety and not a role to determine my ability to earn money or provide for my family,” Keyser said, adding that vacation rentals by owners (VRBOs) are necessary in Newberg to serve people accessing the wine industry or visiting George Fox University, or for sports teams from outside the area needing a place to rest.

She shared with the council a long list of requirements already placed on short-term rentals by the city, including providing adequate parking, garbage service, paying a transient lodging tax, forbidding recreational vehicles and tents, and the prospect of having the city revoke their permit.

“I kind of argue that if all these (restrictions) were put on all the homes in our community, we’d have some really, really nice neighborhoods. But … once again, limited government. We don’t want that overreach,” Keyser said.

She took exception to the notion that short-term rentals drive up the cost of housing — arguing that demand is responsible for that phenomenon.

“When people are willing to pay a higher price for something that is rare, then the value and the price of that rare object increases,” Keyser said. “It will increase until there is no more desire or need for it.”

She suggested alternative manners to promoting more affordable housing in the city: build more houses and reduce the city’s system development charges.

Short-term rentals vs. long-term housing

Determining whether the increase in short-term rentals is posing a problem in the community is difficult to answer considering the city doesn’t have a firm handle on how many short-term rentals there are in the greater Newberg area.

Maps from VRBO and Airbnb — some landlords advertise on both — indicate there are upwards of 100 short-term rentals within a few minutes of downtown Newberg.

They range from rooms for rent to palatial homes with views of wine country, and in price from $50 per night to more than $450 for a day’s stay. The offerings vary from quaint historic homes built in the late 1800s to modern residences constructed of stone and steel.

“Our research identified the operation of a total of 74 vacation rental homes as of July 2023,” Downing said. “This figure of 74 rental homes includes those with active permits, who are registered for payment of transient lodging tax (TLT), and/or with a business license registration.”

Downing added, “The figure does not estimate the number of vacation rental homes which may be operating in the city but do not appear in the city’s records.”

Downing said he doesn’t believe the city has the data to determine conclusively whether short-term rentals are adversely affecting housing affordability in Newberg.

The housing strategy the Newberg City Council accepted in May “includes a variety of strategies to expand and preserve housing,” Downing said, adding that part of that strategy recommends Newberg “consider restrictions and conduct inspections on short-term rentals.”

How would a moratorium work?

Newberg has a number of measures it can take to address the issue, including limiting the number or concentration of short-term rentals in specific neighborhoods, in the city, by tax lot, by distance between units, by street, by census tract, by owners and by length of the rental periods.

Whatever measure Newberg adopts must adhere to state standards, as set by the Oregon Department of Land Conservation and Development.

What’s more, the onus would be on Newberg to justify it. The city would need to notify state regulators 45 days prior to holding a hearing to consider a moratorium and submit written findings justifying the moratorium, then hold a final hearing to invoke the moratorium and adopt findings from that.

State law also weighs heavily on why a moratorium can be adopted: It cannot be based on a shortage of public facilities and must be “justified by demonstrating a compelling need,” Downing said.

In Newberg, according to information provided to the council, that justification could be that the city’s ordinances and regulations are inadequate to prevent public harm from development of affected geographical areas; that the moratorium’s implementation doesn’t adversely affect the supply of housing and commercial/industrial facilities; that the city finds alternatives to the moratorium unsatisfactory; that the public harm by not passing the moratorium outweighs the impacts on local government, particularly housing or economic development, and that the city has the resources to develop interim or permanent changes in plans, regulations or procedures.

Finally, under state law, no moratorium can last more than 120 days unless the city were to hold an additional public hearing, make findings, and convince the DLCD that Newberg’s situation justifies extending the moratorium.

“Vacation rental homes typically occupy units in residential areas that would otherwise be used for long-term housing, decreasing the supply of housing available for residents.”

– Clay Downing, city planning manager

“I consider the mayor and city council to have a role of protector of our health and safety and not a role to determine my ability to earn money or provide for my family.”

– Beth Keyser, owner of Bellagio VRBO