Orono ponders rental property rule change

ORONO – Town officials are pondering potential changes to the current rental property ordinance in an attempt to limit the number of multifamily homes within single-family districts.

The major change being considered would alter the definition of family, in respect to the number of unrelated people living at a residence, and reduce it from five to three unrelated people in the town’s medium-density residential and farming and agricultural districts.

The definition would remain the same within multifamily districts, allowing five unrelated people to live together.

For the purpose of the ordinance, related people would count as one person, City Planner Evan Richert said at Wednesday’s Finance and Community Development Committee meeting.

“It’s important to specify that; otherwise, the code enforcement officer will be driven crazy,” Richert said.

Councilors also are trying to decide whether to implement a rental registration process as a way to monitor rental properties.

A six-month moratorium is now in place that prohibits more than three unrelated people from living in a house together in the town’s medium-density residential and forestry and agricultural zones.

Several single-family homes in those districts have been converted to rental units, and town officials say it is having a negative impact on the public health, safety, welfare and quality of life in those areas.

The purpose of the moratorium is to allow municipal officials time to develop and enact ordinances or make amendments to existing regulations.

The moratorium, which expires Dec. 17, doesn’t affect existing rental units, only the future conversion of single-family attached or detached buildings.

The action is not meant to punish renters, but rather to address the issue of absentee landlords who buy homes to use as rental units in the town’s rural and agricultural areas.

“The aim is to adopt an ordinance before the moratorium date ends,” Richert said. The council could extend the order another six months if necessary, but members said Thursday they would rather not.

Councilors now are trying to determine how fairly to get landlords to comply with the changes.

“The issue has boiled down to nonconformance,” Richert said.

One suggestion is to grandfather the property to previous regulations until it’s bought by a new owner.

“It’s absolutely legal, but unusual in Maine,” Richert said. The town’s attorney, Tom Russell, advised that this exact issue never has been tested in Maine courts.

An alternative is to set a grace period to allow owners to recoup their investments “not tomorrow, and probably not 20 years from now,” Richert said.

He suggested a grace period of five years, which he said would give an opportunity for the real estate cycle to hit a time that is good to sell. That period also works with the typical college cycle for parents who purchased a home for their children to live in and rent to friends while attending the University of Maine, Richert said.

If landlords fail to reduce the number of unrelated tenants in the required zoning districts or fail to meet other requirements regarding parking spaces, screens for trash stored outside, or is classified as a disorderly property, the grandfather clause would be terminated.

Joe Pickering, an attorney for the Greater Bangor Apartment Owners & Managers Association, said five years isn’t enough time to recover investments. He added that the Internal Revenue Service lists 27.5 years as an adequate period and that the most recent upswing in the real estate market ran from 2001 to 2006.

“The swing down has just started,” Pickering said.

He also noted that the town has other ordinances, such as the disorderly property ordinance, to deal with improperly managed properties.

Orono’s Disorderly Property Ordinance has proved more successful than the former noise ordinance that was nearly impossible to enforce, but the town wants more control over rental properties in residential areas.

Orono apartment owner Scott Thomas said that, as a resident, he agrees with the effort to prevent further proliferation of problems in residential areas, but as an apartment owner he has some concerns.

He stated that an improperly managed apartment with three unrelated people can be just as much of a problem as a four- or five-occupant rental property.