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Business and Economy

Fee On Hotels Proposed To Address Lack Of Affordable Housing In Portland

Portland's City Council is working on a proposal that would levy a fee on new hotel rooms to support affordable housing in the city.

The proposed ordinance, sent last week from the council's Housing Committee to the Planning Board, would charge developers a fee of $5,000 per new room being built now or in the future.

The proposal is the result of a study that finds new hotels are being built in Portland much faster than the national average, and that the workers needed to staff them can't afford to live in the city.

Greg Dugal is with the Maine Restaurant Owners' Assocation and Maine Innkeepers' Association. He says the organization isn't disputing that there's a need for more affordable housing in Portland.

"We just believe there are other ways to probably accomplish that," Dugal says. "That doesn't mean the hotel shouldn't be part of the process, but at $5,000 a room that is cost-prohibitive for many people."

Dugal says the ordinance could hurt growth in the industry.

City officials say the fee could apply to roughly 400 hotel rooms expected to be built by 2020.