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Vancouver approves $49 annual licence for Airbnb, short-term rentals

Last Updated Nov 14, 2017 at 4:50 pm PDT

(iStock Photo)

City of Vancouver says 6,000 short-term rentals in operation as vacancy rate for long-term renters sits at less than 1%

VANCOUVER (NEWS 1130) – Vancouver city council has approved new rules that will require a $49 annual licence for anyone who lists their property as a short-term rental on websites such as Airbnb and Expedia.

The regulations also ban hosts from listing units that are not their principal residence and require Airbnb-style platforms to charge a transaction fee.

The city says about 6,000 short-term rentals are in operation while the vacancy rate for long-term renters is extremely low, at less than one per cent.

Mayor Gregor Robertson, along with councillors from his Vision Vancouver party, defended the rules as necessary in a time of crisis. The vacancy rate is just above zero and the city must do everything it can to free up housing for long-term renters, said Robertson.

“I’m stunned to hear that some councillors don’t believe there’s a problem here. We have 6,000 illegal short-term rentals in the city,” he said just before the vote.

“Hundreds of cities around the world are regulating short-term rentals. I think there’s widespread acknowledgment that short-term rentals do affect the rental housing supply, particularly in cities like Vancouver where we do have a shortage in rental housing. … I can’t imagine doing nothing.”

Some Airbnb hosts criticized the rules at a public hearing last month, saying the changes will deprive them of occasional, much-needed income.

Airbnb has maintained it’s open to regulation provided new rules don’t penalize casual users and recognize not every host runs a full-fledged business.

The new regulations will come into effect on April 1, 2018.

Enforcement is key: university assistant professor

Erez Aloni with UBC’s Peter A. Allard School of Law says the new rules are a step in the right direction.

“I think it’s do-able, even desirable, but I’m not sure if there are going to be some unintended consequences.”

He says in terms of the impact on the housing market, if the new rules are implemented properly, then we should expect to see more units re-enter the market.

“The real question is, however how is it really going to be enforced. I’m not sure how the municipality is going to know who is the principle resident. To the extent that principle resident only means utility bills, then everyone can just bring that. If it’s very easy to show you’re a principle resident, then I’m not sure it will have the impact that is expected.

“Saying that, if it is going to be enforced properly it will have a very positive impact in freeing some of those units that are commercially rented.”

Anyone caught without a licence will face a fine of up to $1,000, but Tom Davidoff at the Sauder School of Business says some will probably risk it.

“If you get away with it, you can probably get $4,000 or $5,000 a month on Airbnb. And that incentive is very strong because on a lot of units you might get double what you’d get renting the place out to an actual user.”

But he says if the city can enforce these rules, it will likely free up hundreds of condos currently being used as so-called AirBnB hotels.

Davidoff says it would be even more effective if such properties were taxed like hotels.

Seattle city council voted last night to impose a levy of $14 per night for short-term rentals of entire homes and $8 per night for rooms, with the taxes to kick in by 2019.