Cherry blossom trees line a residential street in Vancouver, on April 4.DARRYL DYCK/The Canadian Press
British Columbia is bringing in new rules to strictly regulate short-term rentals, including requiring hosts to register with the province, giving municipalities the ability to raise fines for those that don’t and creating a team to enforce the proposed legislation.
The rules – effective next spring if passed – will set a “gold standard” for other jurisdictions grappling with the disruption short-term rentals have brought to cities in Canada facing a housing crisis, according to David Wachsmuth of McGill University, one of the country’s leading housing researchers.
Premier David 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.
He warned those who are using platforms such as Airbnb to run large commercial operations that they should be prepared for the new rules.
“The message is straightforward. For those who are operating multiple units, the rules are changing May 1 when this legislation passes and you should bring yourself up to speed,” Mr. Eby said, suggesting they either sell or rent their properties long-term to permanent residents.
A recent McGill study from a team led by Dr. Wachsmuth, a Canada Research Chair in urban governance, indicated that about 16,000 of the 28,000 units on short-term rental in B.C. appear to be whole homes being rented out repeatedly for short stays only – turning them into what one provincial document called mini-hotels.
About 10 per cent of the hosts take in 50 per cent of the revenue, the study found. In Vancouver, there is one operator with 123 listings, while 42 per cent of Victoria listings are owned by someone who lives outside the city.
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The proposed legislation will require everyone with a short-term vacation rental to register with the province. Those addresses will be cross-referenced with the databases the province now has on principal residences, which were 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. The fines cities can charge will be increased from $1,000 to $3,000 a day.
Hosts in any city with more than 10,000 in population will only be able to rent out their principal residence if they have an extra room or are away temporarily. Unless it’s banned in a particular municipality, the owner may also rent out one other unit, such as a basement suite or laneway house.
Mr. Eby acknowledged he has used Airbnb himself and insisted throughout that it is a benefit when people are genuinely sharing their homes as vacation rentals, which is why the province didn’t impose a complete ban.
Dr. Wachsmuth said he thinks it’s a good piece of legislation: “My impression is that B.C. has looked very carefully at what works and what doesn’t.”
He said B.C.’s proposed laws go further than Quebec’s, which only require registration with a provincial body but don’t restrict whether a rental must be principal residence. And it’s a more reasonable approach than the one that New York City took this fall, which was to ban everything outright, he added.
An outright ban would likely drive a lot of vacation rentals to the black market, Dr. Wachsmuth said. As well, he argued that home-sharing does have 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.
The proposed legislation is being welcomed by the Union of B.C. Municipalities. Mayors and councillors have become alarmed about how much short-term rentals were robbing housing from permanent residents.
“We’ve been asking for this for a while because it’s been hard for us even to have any bylaws that are effective,” said UBCM president Trish Mandewo, a councillor in the Vancouver suburb of Coquitlam, which has seen a 40-per-cent increase in short-term rentals in a single year.
Airbnb, meanwhile, says the new law will not help the housing crisis.
“Instead it will take money out of the pockets of British Columbians, make travel more unaffordable for millions of residents who travel within B.C., and reduce tourism spending in communities where hosts are often the only providers of local accommodations,” said a statement that was attributed to the company’s policy manager in Canada, Alex Howell.
Airbnb emphasized that a recent report from the Conference Board of Canada concluded that short-term rentals are not responsible for the significant rent increases in 19 of the country’s largest cities.