Western Canada: B.C. moves to clamp down on short-term rentals

Good morning,

Wendy Cox in Vancouver today.

B.C. Premier David Eby put landowning entrepreneurs who rent out multiple units on platforms like Airbnb on notice Monday. Come May, their business will be outlawed.

That’s when B.C.’s new legislation, which is expected to easily pass in the legislature, will kick in allowing people in communities with a population of over 10,000 to rent out only their principal residence as a short-term vacation rental.

Such hosts would have to be registered with the province to do so and anyone trying to skirt the rules could face triple the fines – from $1,000 per day to $3,000 per day. There will be a team to enforce the new rules, the province announced.

Eby said Monday that “short-term rentals have gotten out of control” in B.C., estimating the proposed legislation could see 8,000 homes returned to the regular housing market out of the 28,000 that are currently listed.

B.C.’s move comes as other jurisdictions eye a clampdown on services such as Airbnb and VRBO out of concern that short-term rentals are restricting the pool of housing that would otherwise be available for long-term tenants. Facing housing shortages in most major Canadian and U.S. cities, politicians have been searching for ways to clamp down.

Last month, Quebec brought in a law that included fines of up to $100,000 for short-term rental platforms listing properties without a government certificate. As of this past June, Airbnb listings are required to have a registration number and certificate issued by the province. But unlike B.C.’s proposed law, Quebec does not restrict the kinds of residences that can be rented out.

Last month, New York City began enforcing strict regulations that Airbnb has derided as a “de facto ban” on its platform. Hosts must register with the city to enable them to rent short-term. The registration must be vetted by the platform for authenticity. The platform must also ensure hosts are not violating existing rules, which restrict people from renting out homes for less than 30 days unless the host is present and that no more than two guests are permitted to stay at a time. Those rules, the city has argued, have been repeatedly flouted.

B.C.’s legislation is slightly different, with one observer calling it “gold standard.”

As Frances Bula writes this week, the proposed legislation will require everyone with a short-term vacation rental to register with the province. To ensure people are renting out only their personal residences, registrations of rentals will be cross-referenced with the databases the province now has on principal residences, databases created as part of the province’s vacant-tax policy. There will be an enforcement team created similar to the Residential Tenancy Branch.

Platforms such as Airbnb and VRBO will be required to take down any listing that can’t be confirmed as legal, instead of the current system where cities have to undertake laborious and expensive investigations and court actions.

David Wachsmuth of McGill University, one of the country’s leading housing researchers, said the legislation strikes the right balance. He said an outright ban would likely drive a lot of vacation rentals to the black market. As well, he argued that home-sharing has a benefit for cities, providing places for visitors who spend money in the local economy, if people are truly renting something that is temporarily unused.

The new rules also do not immediately ban short-term rentals in smaller resort towns that have seen a proliferation of them, although those municipalities can choose to opt into the provincial system.

On Wednesday, federal Finance Minister Chrystia Freeland applauded B.C.’s move, saying her government is also considering its options.

“We are looking around and are saying, ‘What can we do right away that makes more homes available for Canadians?’ And … short-term rental is one of those spaces.”

This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.