Vancouver mayor predicts new Airbnb rules will free up 1,000 units

TheGlobeAndMail.com
July 5, 2017
Frances Bula

About 1,000 apartments are expected to return to the rental market for long-term tenants once Vancouver’s new rules about short-term accommodations such as Airbnb come into force next April, Mayor Gregor Robertson says.

Mr. Robertson, who provided an update on the regulations on Wednesday, said 1,000 units is almost as much as the number of apartments that currently come available for rent in any given month in the city, so it should help boost availability for new renters.

“The priority here is to make sure we’re getting units back into the market,” he said after announcing that council will vote next week on the proposed new rules.

The mayor noted that about 30 per cent of all tourist accommodation in the city is now coming from Airbnb-type listings.

Vancouver has about 6,000 listings currently on Airbnb, Expedia (which also owns VRBO and HomeAway) and other platforms.

Airbnb has about 5,100 of those and Airbnb and Expedia account for 90 per cent of all listings in the city.

“Airbnb is effectively Vancouver’s largest hotel,” Mr. Robertson said.

However, despite the proposed new rules , the mayor said about 70 per cent of people now renting out space as short-term rentals will be able to continue.

That’s because the city would allow rentals if people are renting out a room in their house or apartment, or if they’re renting out their whole unit while they are out of town or on vacation. Airbnb has become a source of considerable debate in Vancouver amid speculation that such short-term rental services have exacerbated the city’s high rents and extremely low vacancy rates. The average rent for a two-bedroom unit in the City of Vancouver was about $1,750 in October, 2016, according to Canada Mortgage and Housing Corp., which put the city’s vacancy rate at 0.8 per cent.

The restrictions also come as the city begins taxing vacant homes – defined as units that aren’t occupied for at least six months out of the year. The empty-home tax, which took effect on July 1, amounts to 1 per cent of the assessed value of an empty home.

The short-term rental rules being put forward by city staff in a report going to council next week haven’t changed much from what was proposed last year.

Commercial operators – people who rent out whole units that are used only for the purpose of vacation rentals – won’t be allowed. People who own a vacation home in the city also can’t rent it out during their time away as a short-term rental. That means second-home owners trying to avoid paying the city’s empty-homes tax won’t be able to use Airbnb rentals to get around it.

Homeowners or renters who want to rent out their own space can do so as long as they get a business licence, pay a $49 fee and add a 3-per-cent charge to their room rental, which will be remitted back to the city.

That last charge is similar to the extra tax that hotels have to pay on each room rental; that money goes to Tourism Vancouver. However, the short-term-rental tax will go back to the city to pay for the costs of the program.

Staff did not relent on the issue of renting out secondary suites or laneway houses as vacation rentals. That will not be allowed and owners are expected to keep those as long-term rentals.

That is in contrast to what Toronto staff proposed recently in initial recommendations on regulating short-term rentals. There, staff and politicians have taken the position that the city shouldn’t dictate what people do with any part of homes they own and live in.

Mr. Robertson said the housing situation in Vancouver is just too dire to allow secondary suites to be exempted.

“If we see the vacancy rate change, council will consider making adjustments [to the bylaw],” he said.

About 145,000 of the city’s 284,000 dwellings are occupied by renters. Secondary suites account for about 30,000 units of that number.

The vacancy rate in purpose-built apartments is 0.8 per cent and the most recent CMHC report indicated that the vacancy rate among investor condos rented out is 0.3 per cent.

The fine for violating the new rental rules will be $1,000, but Kathryn Holm, the city’s chief licence inspector, said that the city might choose legal prosecution rather than a fine for some cases.

Airbnb’s Canadian public policy manager, Alex Dagg, said in an e-mail statement that “Airbnb welcomes the City of Vancouver’s move toward regulating home sharing. We continue to recommend fair, easy-to-follow rules that support our responsible host community.”