Portland city officials are shifting to a lighter approach to regulating the notoriously slippery short-term rental industry, starting with a lawsuit settlement reached last week with Austin, Texas-based HomeAway.

The city essentially is conceding that its mandatory home inspection requirement isn't working, since at least 80 percent of Portland's 4,500 short-term rental hosts — and the companies that list their properties — have ignored city requirements for hosts to get permits before renting out spare rooms to travelers.