Vancouver proposes tighter Airbnb regulations

By Special to MoneySense on September 29, 2016
Estimated reading time: 3 minutes

Those who don't live in the homes they're listing may be banned

VANCOUVER – Vancouver’s mayor wants to ban Airbnb rentals for those who aren’t living in the homes they are listing, while requiring everyone else to hold a business licence. Mayor Gregor Robertson has revealed the city’s approach to regulating short stays facilitated by vacation-rental websites, which he says are contributing to a “dangerously” low vacancy rate. “Our approach is to strike a balance between regulating short-term rentals and ensuring that some people can continue to do that, but focusing on our long-term rentals,” he told a news conference Wednesday. “Housing is first and foremost about homes, not about operating a business.” Currently, rentals of less than 30 days are prohibited without a hotel or bed-and-breakfast licence. Ninety-seven per cent of short-term listings are illegal, according to a staff report set to go to council next week. Robertson said he recognizes a need to allow short-term stays in principal residences so that renters or owners can supplement their incomes in the expensive city. But he wants those Airbnb users to get business licences and post the licence number in advertisements. Stays of less than a month in secondary units such as investment condos or structures like boats and trailers must remain illegal, in an effort to bring at least 1,000 homes back into the rental market, he said. General manager of building and licensing Kaye Krishna said a principal residence would be defined by the dwelling unit — in contrast with Vancouver’s proposed empty-homes tax, which defines principal residence as the entire parcel of land. Therefore, under the short-term rental regulations it would be illegal for owners to list a basement suite or a laneway home on Airbnb. But they wouldn’t have to pay a vacancy tax on those units if left empty. If a long-term renter of a laneway home or basement suite wanted to list it on Airbnb, they could do so because it is their principal residence, Krishna added. If council approves the report, public consultation will help decide details, including the cost of a licence. The city is also exploring a short-term rental tax that is equivalent to the taxes paid by hotels and bed and breakfasts. The report recommends “proactive, effective enforcement,” using the city’s bylaw and enforcement powers to require unlicensed operators to pay fines or face legal action. The plan would legalize about half of current entire-unit listings and almost all private-room listings, the report says. Karen Sawatzky, a Simon Fraser University urban studies master’s student who has examined Airbnb’s impact on rental housing, said she’s concerned about allowing listings of private rooms. “Where are people who are making minimum wage supposed to live in Vancouver?” she asked. “You can not afford an entire one-bedroom apartment on your own.” A city-commissioned study found 5,353 active, unique listings in Vancouver in June. Seventy-four per cent were entire units, 23 per cent were private bedrooms and two per cent were shared rooms. Airbnb was by far the largest player, with 85 per cent of active listings, the study found. Spokeswoman Alex Dagg said Airbnb is reviewing the new staff report and remains hopeful that Vancouver will develop fair, easy-to-follow regulations. The company released its own report on Wednesday that said only 320 listings are booked frequently enough to financially out-compete a long-term tenant — equivalent to 0.11 per cent of Vancouver’s housing units. Most entire-home listings bring in modest income, about $6,630 annually, Airbnb’s report said. Vancouver is the latest jurisdiction to grapple with the rise of Airbnb. Quebec amended its laws in April to require anyone regularly hosting tourists for less than 31 days to obtain a $250 permit, have at least $2 million in insurance and pay a nightly hotel tax.