City of Vancouver proposes licensing short-term rentals

Homeowners will need business license for short term rentals
WATCH: The City of Vancouver is planning to regulate short-term rentals. As Jordan Armstrong reports, it will require owners to have a business license and post that license in any advertisement.

Vancouver Mayor Gregor Robertson is proposing a new business licence for short-term rentals to help boost long-term rental supply in the city with an alarmingly low vacancy rate.

The proposal will go before Vancouver City Council Wednesday morning.

The city says there is space for short-term rentals in Vancouver, whether owned or rented, to allow residents to supplement their income, but Robertson says it’s all about striking the right balance between regulating short-term rentals and protecting the long-term rental supply.

“Housing is first and foremost about homes, not operating a business,” Robertson said.

WATCH: Vancouver Mayor Gregor Robertson announces the proposal of a new business licence for short-term rentals like Airbnb in the city. 

‘Housing is first and foremost about homes and not about operating a business’: Mayor Gregor Robertson on short-term rentals
‘Housing is first and foremost about homes and not about operating a business’: Mayor Gregor Robertson on short-term rentals

The city claims the proposed approach will “legalize” approximately 50 per cent of the current short-term rentals available in Vancouver and potentially add over 1,000 homes back into rental market.

Story continues below advertisement

“Right now, about 99 per cent of short-term rentals are not legal in this city,” Robertson said. “They are not licensed and are in breach of our current regulations.”

Under the proposal, a licence number will have to be posted on any advertisement for a short-term listing. Licences will also be public, so neighbours will know if a listing is legitimate.

Robertson says the licencing system will also address issues like public safety, consumer protection and enforcement. Kaye Krishna, the city’s new General Manager of Development Services, Buildings and Licensing, adds the licencing regulations will resemble the city’s existing policy for bed-and-breakfast hotels.

WATCH: Vancouver city staff announce a proposal to regulate short-term rentals

City of Vancouver announce proposed framework to licence short-term rentals
City of Vancouver announce proposed framework to licence short-term rentals

Chief licensing inspector Andrea Toma says the city will be pushing for proactive enforcement.

Story continues below advertisement

“In order to obtain a licence from the City of Vancouver for both owners and renters, you must prove to us that it’s your primary residence,” Toma said.

Renters will need to demonstrate they have the permission of the landlord to rent out the property on a short-term basis.

There will be an auditing system in place, according to Toma, where staff will review and confirm that the information provided by the licensees is adequate, as well as monitor short-term rental listings.

“Those without a permit will get a deadline to get a licence or remove their ad,” she said.

Those who don’t comply will face fines and even legal action.

The city will decide on the licencing fees and a potential tax through public consultation in the coming months.

The proposal will be heard by the city council next week, but the final decision is not expected until early in the new year.

READ MORE: Report shows 5,000+ short-term rentals listed in Vancouver

report released in July analyzed short-term rentals in the city and showed there were more than 5,000 short-term rentals listed in 2015 on sites such as Airbnb and Flipkey.

Story continues below advertisement

Seventy-five per cent of the places listed were entire homes, condos or apartments.

WATCH: How will the short-term business licence be enforced? City staff explain.

City of Vancouver recommends ‘proactive enforcement’ to protect short-term rental supply
City of Vancouver recommends ‘proactive enforcement’ to protect short-term rental supply

Following the release of the report, the city asked residents to weigh in on the issue of short-term rentals online. A city-commissioned survey asked residents – among other things – if short-term rentals make Vancouver a more appealing tourist destination, or if it makes it harder for people to find quality and affordable long-term rentals.

Looking at other jurisdictions

Krishna says they looked at how other cities are dealing with short-term rentals to analyse what works and what doesn’t.

In particular, they looked at imposing a possible cap on short-term rentals in Vancouver.

Story continues below advertisement

“We believe that the primary residence requirement takes the place of a cap,” she said. “San Francisco, for example, does have a cap. But what we have learned from them is it’s very difficult to administer. They spend a lot of time and resources on it and they don’t always see positive results.”

The City of San Francisco currently caps short-term rentals of an entire property at 90 days and requires hosts to register with the city.

Short-term rentals are regulated in a variety of ways in North American and around the world.

Some are more drastic than others. For example, Berlin, Germany, another city with a very low rental rate, enforced a new regulation that says people who rent more than 50 per cent of their residence on a short-term basis without a permit from the city will pay a fine of €100,000 (or $145,000 in Canadian dollars).

Some cities have opted to ban short-term rental websites like Airbnb completely.

In Anaheim, California for example, entire blocks of homes are rented out on a weekly basis, prompting city council there to issue an outright ban on short-term rentals in residential areas. In Santa Monica, city officials outlawed short-term rentals of less than 30 days.

In February, Austin, Texas issued a set of very specific regulations for short-term rentals, including inspection of septic systems, third-party life-safety inspection and limits on the percentage of short-term rentals in residential and commercial areas. The city also imposes regulations on sound equipment, live music and noise, prohibits outdoor assemblies from 10 p.m. to 7 a.m. and bans commercial events, such as bachelor and bachelorette parties, concerts, weddings and other large events at short-term rentals.

Story continues below advertisement

Chicago, Illinois requires short-term rental hosts to register with the city. The city also imposes annual and per-listing fees on the Airbnb and VRBO services and adds a four per cent surcharge to all bookings, with the proceeds going to enforcement, administration and support services for the chronically homeless.

The City of Barcelona, a popular travel destination in Europe, imposed a moratorium on new registrations for short-term rentals, so it’s not currently possible to get a license for a new holiday rental in Barcelona. But the city council is going a step further and allegedly asking residents to report a property if they suspect it’s being illegally used for short-stay rentals. In 2014, it slapped Airbnb with a €30,000 (roughly $44,000 Canadian) fine for a “serious” breach of local laws.

Meanwhile, city authorities in London, UK, moved to eliminate “unnecessary red tape” when it comes to short-term rentals in 2015, capping a restriction on short-term renting of residential premises at 90 days.

Airbnb’s reaction 

Airbnb dominates the short-term rental market in Vancouver with 85 per cent of the total units listed online, according to July’s report.

In a statement to Global News on Wednesday, the company said they will be taking their time to digest the proposal for a new licencing system once they get the full report.

“Airbnb is glad to see the City of Vancouver is moving forward toward an inclusive consultation process,” said spokesperson Alex Dagg in an email. “We look forward to seeing the full report and remain hopeful that Vancouver will become the first major Canadian city to develop fair, easy-to-follow regulations that support home-sharing.

We look forward to continuing to share data and information about our community, and to continuing to work collaboratively with Mayor Gregor Robertson, Councillor Meggs and Vancouver city council.”

Story continues below advertisement

With files from Estefania Duran