TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Josh Eggleton, Chief Financial Officer
SUBJECT:
title
First Reading of Ordinance No. 4-26 amending SRC Chapter 38 - Tourism Promotion Area (TPA) to include short-term rentals and accessory short-term rentals under the TPA
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Strong and Diverse Economy
end
SUMMARY:
summary
In December 2025, the City Council approved Ordinance Bill 4-25 which adjusted the remonstrance (“objection”) procedures for those in the Tourism Promotion Area to be proportionate to the number of units an operator offers for rent.
The additional ordinance change before City Council for consideration would include STR and ASTR operators as part of the TPA and those operators would be required to collect and remit the TPA fee to the City of Salem. The public hearing will allow all transient lodging operators, including operators of ASTRs and STRs, to provide comments on the continuation of the TPA.
end
ISSUE:
Shall City Council advance Ordinance Bill No. 4-26 to second reading for passage?
RECOMMENDATION:
recommendation
Advance Ordinance Bill No. 4-26 to second reading for passage.
body
FACTS AND FINDINGS:
In December 2025, City Council approved Ordinance 4-25 which adjusted the remonstrance (“objection”) procedures for the TPA to be proportionate to the number of rooms available to rent within the last 60 days prior to the public hearing. For example, a lodging facility with 50 rooms (such as a hotel) would be entitled to 50 votes whereas a lodging facility with one unit (such as a short-term rental) would be entitled to one vote. Ordinance 4-26 would bring STRs and ASTRs into the jurisdiction of the TPA. By bringing these entities into the TPA, the operators currently subject to the TPA and those parties potentially subjected to the TPA (STRs and ASTRs) can remonstrate (“object”) the continuation of the TPA. Since the TPA is structured as an Economic Improvement District (EID), if objections are received totaling more than 33 percent of the total number of potential objections represented by units from eligible operators, then the TPA will be dissolved.
Outreach
On February 2, 2026, over 300 letters were sent out to those impacted or potentially impacted by this proposed ordinance change. This included letters to hotels / motels, STRs / ASTRs that are registered or pending registration, and to those potentially operating unregistered STRs / ASTRs. Letters were also sent to those potentially operating long-term rentals to inform them of the ordinance change in case they are also offering short-term rental stays. A public hearing notice was published on the City website and by the Salem Reporter. Communications staff also provided support with a social media push in late February and early March on various platforms to inform the general community about the public hearing.
As of February 23rd, the City has received objections for the continuation of the Tourism Promotion Area from six individuals representing six units or 0.28 percent of impacted parties. Any additional comments and representative percentages will be provided to the City Council during the public hearing presentation on March 9th.
Staff Support
Staff recognize that if Ordinance 4-26 passes, it would be a change to the operations of those who own short-term and accessory short-term rentals. In order to help ease the impacts of this change, staff is:
• performing outreach to major short-term rental platforms (including AirBnB and VRBO) about collecting and remitting the TPA fee on their operator’s behalf;
• planning training opportunities for short-term rental and accessory short-term rental operators on how to file their monthly reporting form;
• adjusting the effective date of Ordinance 4-26 to May 1, 2026. Starting at the beginning of a month will allow more time for outreach and ease the transition for operators so there is a clear delination fo when tracking, reporting, and payment will begin. Reporting and collections are due to the City the end of the following reporting month. For example, for stays occurring in May, those will be reported with collections remitted to the City by June 30, 2026.
BACKGROUND:
In 2019, the City Council approved an Economic Improvement District (EID) for the Tourism Promotion Area in Salem. As an EID, the TPA is required to be renewed every five years which last occurred in 2024. The TPA established a 2% fee on overnight stays in Salem hotels and motels, including stays booked through booking agents like Expedia. Of the fee revenue collected, 95% is remitted by to the City’s Destination Marking Organization which is currently Travel Salem. These funds are to be used to benefit those in the TPA by promoting overnight tourism and the lodging business environment through advertising, branding efforts, promotions, sponsorship of special events, and other programs that increase overnight transient lodging stays. Up to 5% is retained by the City to cover costs like staff time administering the program, banking and investment fees, and credit card processing fees.
Attachments:
1. Ordinance Bill No. 4-26
2. Public Comment 1
3. Public Comment 2