Vacant high-end apartments being turned into vacation rentals

Vacant apartments turned vacation rentals

PORTLAND, Ore. -- While renters are clamoring to find an affordable apartment in Portland, many of the expensive high-rise units have been sitting vacant.

Now, some of those building owners are getting creative, listing them as vacation rentals online.

As The Willamette Week reported Tuesday, Yard on Northeast 2nd Avenue is trying to make up some money while they wait to lease all of their 284 apartments.

The dark facade and limited windows has helped Yard stick out as the first high rise on the east end of the Burnside Bridge. In exchange for city tax credits and fees waived--Yard provides 57 units of affordable housing in a time when Portland needs it the most. Those are all taken. But according to their website, 74 percent of the remaining apartments are still vacant.

Enter vacation rental sites Vacasa and Airbnb. Eighteen units, the entire 11th floor, in Yard are furnished and listed for daily or weekly stays at around a couple hundred dollars a night.

Park Avenue West, which just opened this spring on Southwest 9th Avenue, is also doing it with a few of their vacant units. But there's a problem.

"Yes I believe we have a violation," said Mike Liefeld with the city's Bureau of Development Services. He says both buildings, and probably others, don't have the right permit to be acting as a hotel.

"It is allowed by right to do motel/hotel uses. They just need to get the building all situated correctly to have the occupancy to have it 100 percent legal for that operation," Liefeld said.

The change of occupancy permit is a couple hundred dollars depending on the building, Liefeld guessed, and requires fire sprinklers, corridor egress and alarms. All are precautions for short term visitors who may not be familiar with the building in case of emergency. Long term, leased tenant buildings don't require those precautions. Both Park Avenue West and Yard say they are now seeking the correct permit to keep the vacation rentals up.

If you were hoping these apartment vacancies might bring prices down, think again.

"The apartment market within Portland remains very tight," PSU real estate professor Gerry Mildner says.

Portland has been below 5 percent vacancy for the past eight years. There has also been 20 percent less housing built during that time as compared to 1990-2007.

"What we need in our city is simply more space and more units to be produced. How those units are used or allocated, is up to the market to determine," Mildner said.

The City of Portland only made short term rental rules two years ago when Airbnb came to town. So it's likely many of these apartment buildings weren't aware of the permit requirements.

KGW


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