News / Vancouver

Vancouver's proposed rules for Airbnb-like rentals too restrictive says company

Company lists ban on secondary suites and 3% transaction fee among concerns

Vancouver city council is set to discuss proposed short-term rental rules that would regulate companies like Airbnb on Tuesday.

Jennifer Gauthier/Metro

Vancouver city council is set to discuss proposed short-term rental rules that would regulate companies like Airbnb on Tuesday.

Airbnb Canada says Vancouver’s proposed rules on short-term rentals are too restrictive because banning secondary suites from short-term rentals would not necessarily increase vacancy rates and could hurt families instead.

Vancouver city staff have released a 75-page report that details the distribution of the 6,000 short-term rentals in the city, average profits for people list properties on Airbnb, and an analysis on how many people will comply with the new rules.

The proposed rules, if approved, would require operators to obtain an annual $49 business licence fee and they alotgether ban secondary suites, investment properties, or laneway homes as short-term rentals. In other words, people would only be allowed to list their primary residence (or part of it) on Airbnb-like platforms.

Some secondary suites may sit empty as a result because most Airbnb hosts only rent out the secondary suite 90 days a year, said Alex Dagg, public policy manager for Airbnb Canada.

Most hosts in that situation are probably using the suite the rest of the time, she explained.

“We think there is a mistake or assumption here that all of those units will be placed in the long term rental market. We don’t think that is the case.”

City staff are recommending a three per cent transaction fee for all short-term rental bookings and Dagg says Airbnb will happily comply with any taxation rules – if the province mandates them.

“We’d have to have more discussions with the city about that,” she said.

Municipalities do not have jurisdiction to impose sales or transaction taxes.

Downtown Vancouver has more short-term rental listings than any other neighbourhood in the city.

Host Compliance/City of Vancouver report

Downtown Vancouver has more short-term rental listings than any other neighbourhood in the city.

The new regulations will cost the city about $618,000 to implement in 2018, according to the city staff report.

And yet, staff estimate that initial compliance won’t be high. In fact, staff are assuming that only about a quarter of current short-term rental operators in Vancouver will apply and receive a business licence, according to the report.

Part of the reason for that could be because a short-term rental unit brings in up to three times the amount of revenue compared to a long-term rental unit, according to city staff.

Downtown Vancouver is home to 27 per cent of the city's short-term rental listings, according to the report. Those in Mount Pleasant/Renfrew make up 18 per cent, and those in Kitsilano/Point Grey make up 15 per cent.

City council will vote Tuesday on whether to schedule a public hearing on the proposed regulations. The proposed rules, if enacted, will go into effect April 2018.

More on Metronews.ca