City officials will check into options for reforming Ashland's vacation home rental laws in the face of a burgeoning — and largely under-the-radar — vacation home rental market.

City officials will check into options for reforming Ashland's vacation home rental laws in the face of a burgeoning — and largely under-the-radar — vacation home rental market.

More and more homeowners in Ashland and across the nation are renting out their homes to tourists for short-term vacation stays.

Many owners of vacation rental homes in Ashland are not paying the city's 9 percent lodging tax or the state's 1 percent lodging tax. Many also don't undergo city and Jackson County inspections or pay for city business licenses.

In May, the city of Ashland cracked down on illegal vacation home rentals, sending out dozens of letters to property owners advertising their homes on popular Internet sites such as www.vrbo.com, which stands for Vacation Rentals By Owner.

Last week, the Ashland City Council directed city staff members to investigate options for loosening rules so that more homeowners could rent their homes to tourists legally.

"People are having rentals and we're not getting TOT revenues," said Councilor Russ Silbiger, referring to Ashland's transient occupancy tax, also known as the lodging tax.

The City Council will have a study session in the future to learn more about possibilities for vacation rental law changes. The issue would have to be placed on a City Council regular meeting agenda before the council could make any official decisions.

Vacation home rentals are not allowed in parts of town zoned for single-family houses. City laws would have to be changed to allow the vacation home rentals there.

Vacation home rentals can operate in areas zoned for multi-family use, but the owners must go through a land-use process to win approval and must pay fees of about $1,100. Their homes must also have adequate parking and access to major streets, according to city planners.

Multi-family zones allow for a higher density of residents and structures like apartment buildings.

People can rent their homes out legally in single-family or multi-family zones if the stay is for one month or longer.

Ashland resident, tourism consultant and property owner Mark Dennett got one of the notification letters from the city of Ashland that he was running a vacation home rental illegally in a single-family home zone.

Dennett said he stopped taking reservations for short-term stays after getting the notice and returned to his traditional market of 30-day and longer executive lodging.

Dennett told councilors last week that Ashland's vacation rental rules are outdated.

He said bed and breakfast inns account for 11 percent of the lodging market nationwide, but the fast-growing vacation rental segment now accounts for 11 percent of the market as well.

"The demand for this segment is reflected in the explosive growth of vacation home rental websites," Dennett said.

He said many Oregon cities have embraced the vacation home rental segment and have adopted sensible land use rules to protect neighborhoods while bringing in lodging tax revenue and meeting the needs of visitors.

Extended families, foreign visitors, pairs of couples vacationing together and people with pets are among the groups that seek out vacation home rentals, Dennett said.

Visitors tend to stay longer in vacation home rentals, spending more at local restaurants, galleries, grocery stores and other businesses, according to Dennett, who has operated vacation rental properties in Sun River, Jacksonville and on the Oregon coast.

Renting out their homes to tourists provides a needed source of income for people who are retired, have faced economic troubles or who struggle to pay their mortgages and property taxes, according to Dennett.

A former bed and breakfast inn owner, Dennett said Ashland's inns deserve a level playing field when it comes to vacation home rentals.

Representatives from Ashland's Bed and Breakfast Network have previously said they don't object to the competition from vacation home rentals, but the rentals don't have to pay lodging taxes or undergo inspections — giving them an unfair advantage over law-abiding innkeepers.

Earlier this year, Ashland's Bed & Breakfast Network gave city officials a list of vacation home rentals operating illegally in Ashland. Innkeepers gleaned information about the rentals off of vacation home rental websites.

Before vacation home rental rules are changed, Ashland needs to explore how to balance the benefits of allowing more vacation rentals with the rights of long-term homeowners and renters to live in relatively peaceful neighborhoods, according to city planners.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.