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Portland's short-term rental cap is now a formula, not a number

Portland's short-term rental cap is now a formula, not a number
Maine · Legislation

Portland's short-term rental cap is now a formula, not a number

What happened. Portland's City Council voted unanimously in August 2024 to replace the city's flat 400-unit ceiling on non-owner-occupied short-term rentals with a formula: 1.5 percent of the city's long-term rental housing stock, recalculated annually. At the time that worked out to roughly 285 units.1

Then in November 2024, voters tightened the proof requirements on top of it.

How the cap now works

  • The formula: 1.5 percent of registered long-term rental stock, mainland, non-owner-occupied. As the registered stock grows, the cap grows with it — reported at 293 units for 2026.
  • Peaks Island carries its own separate ceiling: 40 non-owner-occupied units annually.
  • Existing operators keep their licences. The city does not revoke; it simply stops issuing new non-owner-occupied licences until the count falls below the cap through attrition.
  • Per-building limits: buildings of 1 to 2 units, a maximum of 1 short-term rental; buildings of 10 or more units, a maximum of 5.
  • As of 2026, no new tenant-occupied short-term rental licences are being issued at all — only existing operators can renew those.

Councillor Kate Sykes put the logic of a moving cap this way: “Hopefully we're going to build a lot more housing, and if we do we can have more short-term rentals.” The stated rationale for the change was, as reported, “to prevent investors from scooping up homes that could otherwise serve as long-term rental housing.”

And the ballot measure

On 5 November 2024, Portland's council-referred Question B passed with 67 percent of the vote. It tightened owner-occupancy proof, requiring a homestead exemption or a redacted tax return.

That is the part that reaches associations directly, because owner-occupancy is the dividing line between the capped category and the uncapped one.

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The per-building limit is the association's problem

Most coverage of Portland's rules treats them as an owner's compliance question. The per-building ceilings make them a building-level one.

In a Portland condominium of ten or more units, five short-term rental licences is the maximum the building can hold. Whichever owners hold them, hold them. There is no mechanism in the ordinance for the association to allocate them, transfer them, or recover one from a departing owner — and the city's licence attaches to the unit and its operator, not to the association.

The consequence is a first-come allocation of a scarce, valuable right among your own members, decided by the city's queue rather than by your declaration. Two owners of identical units can end up with materially different economics, permanently.

In a 1-to-2 unit building — Portland's triple-deckers and small conversions, many of them two-unit condominiums — the limit is one. Which makes it a binary question between two owners.

The attestation point that matters to managers

Portland's registration scheme includes an association-attestation element, which means the association can be drawn into an owner's municipal filing whether it wants to be or not.

Two practical cautions follow. First, an attestation signed on behalf of the association asserts something specific — typically whether the governing documents permit the use. Second, an attestation is not a waiver: signing one does not amend the declaration, and it does not estop the association from enforcing a use restriction later. Conversely, declining to sign does not make the association the owner's adversary in a municipal process it is not party to. Get the form reviewed once, by counsel, and adopt a consistent practice.

Two systems, and neither cures the other

This is the point that produces the most confusion in Maine, so it is worth stating flatly.

The municipal licence governs the owner-to-city relationship under home rule. The declaration governs the owner-to-association relationship. A Portland licence does not authorise a use the declaration forbids, and compliance with the declaration does not satisfy the ordinance. An owner can be in good standing with the association and in violation in the city's eyes on the same day, and the reverse.

The association's own levers come from the Maine Condominium Act: fines under 33 M.R.S. § 1603-102(a)(11), available only “after notice and an opportunity to be heard”; injunctive relief; and, unless the declaration provides otherwise, enforcement of fines as assessments under § 1603-116. A planned community's levers come from its covenants, because Maine has no planned-community statute.

And the hardest constraint remains § 1602-117(d): adding or changing a use restriction in a Maine condominium declaration requires unanimous owner consent. An association that has watched the city cap the practice cannot simply follow suit by board rule.

Where the state layer stands

Nowhere, deliberately. LD 1181, which would have let municipal assessors designate a non-owner-occupied short-term rental as “commercial in use”, died when its majority report failed on a 16–16 Senate tie on 5 June 2025. Maine does not appear to preempt local short-term-rental regulation, and the Law Court upheld Bar Harbor's cap ordinance in Brooks v. Town of Bar Harbor, 2024 ME 21.

State tax treatment is unaffected by any of it: Maine's 9 percent sales tax on the rental of living quarters, 36 M.R.S. § 1811(1)(D)(3), generally applies to stays under 28 days.

What a Portland board can do

  1. Count your building's licences and compare against the per-building ceiling. You may already be at it.
  2. Read the declaration's use clause as recorded, not as summarised in a resale packet. Whether it reaches transient occupancy at all decides the question.
  3. Check whether any rental restriction you enforce was adopted as a recorded amendment or as a board rule. A use restriction adopted without the § 1602-117(d) unanimous vote is exposed.
  4. Settle your attestation practice in advance, in writing, so it is not decided ad hoc by whoever answers the email.

What to watch next

The annual recalculation, since the cap now moves with registered long-term stock — a growing figure raises it, a shrinking one lowers it against existing operators who are nonetheless grandfathered. And whether a successor to LD 1181 is filed in the 133rd Legislature, which convenes in December 2026; a 16–16 tie is the kind of margin that invites a refile. This column does not predict either.

Related Maine HOA Topics

← All Maine HOA Topics

  1. Maine Public, Portland approves new short-term rental regulations (21 August 2024)
  2. Bangor Daily News, Portland approves new short-term rental regulations (22 August 2024)
  3. News Center Maine, Portland City Council approves short-term rental cap
  4. Brooks v. Town of Bar Harbor, 2024 ME 21 — official opinion PDF, Maine Judicial Branch

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