CANNON BEACH — In an effort to protect the city’s limited housing stock and preserve livability, the City Council will explore placing a cap on vacation rentals.

During a City Council work session on Tuesday, City Councilor Lisa Kerr called for a cap at about 200 — the number of vacation rentals operating in the city.

“I think there are so many good reasons to do this. I think they are detrimental towards a community, towards a community feeling and the building of community,” she said. “I think that people, given a choice of making more money on a short-term rental over a long term, will choose the more money. That’s just the way things operate.”

Kerr believes many cities are moving toward the same policy direction.

Cities along the North Coast have taken different approaches to limiting vacation rentals and some are more stringent than others.

In Cannon Beach, property owners are limited to 14-day permits that allow two vacation renters a month.

Gearhart is not taking any new applications for vacation rentals in nearly all residential zones. The city allows people who already have a vacation rental to pass it on to their family, but not with a sale.

Seaside allows a portion of properties to be used as vacation rentals. New vacation rentals are subject to a public hearing and must receive approval from the Planning Commission.

Manzanita, to the south of Cannon Beach in Tillamook County, capped vacation rentals in the 1990s at 17.5%, which is the number that existed at the time.

Of the nearly 1,900 homes in Cannon Beach, about 700 — or 37% — are occupied, according to 2020 U.S. Census Bureau data. About 200 homes — or 11% — are used as vacation rentals.

Steve Sokolowski, the city’s community development director, noted that second homes are a significant issue for Cannon Beach.

City staff reported last year that just 5.5% of workers in Cannon Beach live in the city, with some commuting from as far away as the Portland metro area.

City Councilor Gary Hayes said, “If you come here and say, ‘Well, if I buy a place, can I make a short-term rental?’ The answer right now is ‘yes.’”

With a cap, he said that if people want to generate income from a property, they would only be able to do so by providing a long-term rental.

“So, I think we need to do this, too,” Hayes said.

City Councilor Brandon Ogilvie noted that the number of vacation rentals has not grown in years.

“What hasn’t been mentioned is that our short-term regulations are somewhat more stringent than the other cities,” he said. “So, I think that has something to do with it being somewhat self-regulating.”

City Councilor Nancy McCarthy disagreed that the city’s ordinance regulating vacation rentals is more stringent.

McCarthy said she thinks the 14-day permits have a dampening effect. “But I think we could probably make it much more stringent,” she said.

She added that it could also be worth exploring restrictions in certain city zones in the future.

Kerr noted that while it is still uncommon, some jurisdictions have implemented a tax on second homes that are empty.

To address a housing shortage, Vancouver, British Columbia, for example, created a speculation and vacancy tax. Revenue from the tax is intended to help fund affordable housing projects.

“It’s just an idea,” Kerr said. “I’m not saying we should do that. I just think it’s an interesting thing to read and look at.”