CANNON BEACH — Vacation rentals have surged in popularity on the North Coast, part of a pattern of tremendous growth in an industry expected to be worth $36.6 billion nationally by the end of the year.

Seaside issued about 430 vacation rental permits last year, compared to 350 seven years ago, about a 23 percent increase.

In rural Clatsop County, vacation rentals went from 93 in 2010 to 161 last year, half of which were in Arch Cape.

But in Cannon Beach, contrary to public perception, the number of permitted vacation rentals has actually plateaued, sitting at about 200 a year for the past five years.

For people involved in the vacation rental industry, there isn’t a clear answer why permits in Cannon Beach remain flat.

Unlike some communities, such as Gearhart and Manzanita, Cannon Beach does not cap the number of standard permits and the number of second homes remains largely unchanged.

Somewhat complicated regulations could possibly be a deterrent for property owners, City Planner Mark Barnes said, but not a large one.

“Whenever I talk to someone getting their first rental permit, I warn them, ‘This is really complicated,’” he said. “In my five years here I’ve never had anyone throw up their hands and say it’s not worth it … so my general feeling is our rules are not much of a disincentive.”

Local property managers and real estate agents echo this sentiment for the most part, arguing that in Cannon Beach the difference lies in the type of customer and the types of homes available.

A common misconception among buyers is that it is possible to pay for a second home by renting it out as a short-term rental, Brian Olson, the owner of Beachcomber Vacation Homes, said. Even in the best of circumstances, it is difficult for someone to justify the cost of a vacation home with just the income from a rental.

“You’re lucky if you can break even in Cannon Beach,” Olson said.

With a median home price in Cannon Beach at $550,000 —- almost double that of Seaside — and rules that prevent more than half of the property owners from renting more than once every two weeks, renting a home as a source of income is a less realistic goal than it may be at other places along the coast, said Alaina Giguiere, a real estate agent in Cannon Beach.

This reality brings a different type of customer to the market.

“Someone who buys a $3 million house … they’re not looking for a nightly rental on that. They just want the option (to rent). But first, they want a home they can use,” Giguiere said.

Even if the number of permits issued has not significantly grown, the perception is that more vacation rentals are coming into town. This is in large part due to the fact a permit count doesn’t reflect people who operate illegally.

Go on Airbnb any day of the week, and more than 300 lodging options will appear for Cannon Beach. With second homes accounting for about 60 percent of the housing stock, and with only 20 percent of those registered as rentals, many could be operating under the regulatory radar.

How to find and track illegal rentals has long eluded the city, Barnes said. Following in the footsteps of Gearhart and Seaside, Cannon Beach signed a contract with STR Helper, a program that helps identify illegal vacation rentals, and is in the process of hiring a code enforcement officer.

But until then, Barnes said, “There’s a big mystery there.”

The perception that vacation rental activity has increased could also be due to the fact more homes are being rented in the offseason, in part because of a growing client base in Portland and better marketing.

“We have more advanced bookings than we ever got before. I think we’re learning to fill up the spaces better,” said Linda Beck-Sweeney, the owner of Cannon Beach Vacation Rentals.

While permits remained flat, city lodging tax revenue from vacation rentals jumped from about $269,000 in 2012 to more than $420,000 in 2017.

Whatever the cause, the fear that a growing number of rentals are taking up housing for year-round residents and impacting livability has inspired the city to consider revisions to vacation rental regulations.

Potential changes include taking away the ability to rent a unit nightly, which some on the City Council see as a disincentive to prospective homebuyers interested in turning their property into a rental.

Whether that action would lead to any tangible reduction in vacation rentals remains to be seen.

“I don’t know whether that will have an appreciable difference on the ‘impacts on the community issue,’” Barnes said.

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