Short-term rental boom disrupting peace in small communities, and some municipalities are pushing back

Theglobeandmail.com
June 6, 2022
Salmaan Farooqui

Every weekend, a new group of dozens of people arrives at the house next door to Jennifer Hierholzer’s. Once, it was a rowdy music video shoot. Another time, a wedding with 50 guests. The gatherings almost always involve noisy alcohol-related antics or screaming children.

It’s not what Ms. Hierholzer and her husband, Jurgen, signed up for when they purchased their beachfront property three years ago in Tiny, Ont. The house next door was sold shortly after they moved in, and it soon became a “ghost hotel” -- a short-term rental property where guests are constantly cycling in and out and the owners are nowhere to be found.

Ms. Hierholzer said making sure the guests next door aren’t mistakenly hanging out on her own property feels like a full-time job. The visitors leave trash on the street that ends up being picked up by the wind and cast about her neighbourhood. Last week, a group started a fire when they tried to burn charcoal in a gas barbecue.

“It’s a nightmare,” Ms. Hierholzer said. “We used to be able to have our windows open and hear the waves crashing into the bay.”

When she complained about the noise, the owner of the property next door suggested she buy ear plugs and noise-dampening curtains.

Small municipalities across Canada, including Tiny, are bracing for the summer peak season to once again usher in a boom in short-term rentals. Many local governments are drafting new rules for these dwellings in the hopes of curbing their effects on communities that weren’t popular tourist destinations before online vacation-rental platforms, such as Airbnb and VRBO, made them accessible to the entire world.

Some towns, such as Goderich in Southern Ontario, have made it illegal to rent out a whole house on a short-term basis. These places allow short-term rentals only in secondary suites, such as basement apartments.

“It’s absentee Airbnb landlords which are the largest threat. Those are eliminated entirely,” Goderich Mayor John Grace said of the town’s policy.

“We’ll see how it works in the next couple years. I’m sure it’s going to be revisited.”

In Tiny, which has a population of about 11,000, there are about 400 short-term rentals. The town’s mayor, George Cornell, said the number of properties listed as vacation rentals has increased throughout the pandemic, as domestic tourism has spiked and investors have looked to online platforms to capitalize on the trend.

Mr. Cornell said Tiny’s town council is working on a permit system that would cap the number of people who can stay at a given property based on the number of rooms it has. The town is also considering capping the total number of nights a home can be rented out each year. Another proposed measure would require visitors to stay for a minimum of six nights, in an effort to restrict the flow of new arrivals.

The town’s hope is that placing limits on short-term rentals will cause the noise and rowdiness associated with them to dissipate.

“Part of your experience here is getting to know your neighbours, but if your neighbours are changing every weekend, that doesn’t really facilitate ... a healthy community in many people’s opinions,” Mr. Cornell said.

He added that there are some benefits to short-term rentals. They bring in tourists, who spend money at local businesses, he noted, and they employ local cleaners and groundskeepers.

Ms. Hierholzer isn’t convinced the new regulations will work. The town’s current “zero-tolerance policy” for short-term rentals that cause noise issues or flout fire bylaws hasn’t solved her problem with the house next door.

Even municipalities that have long regulated short-term rentals have found them troublesome.

The Canadian Rockies town of Canmore, Alta., a perennial tourist favourite, has had short-term rentals on its radar since the 1990s, when the advent of the internet first allowed local homeowners to advertise their properties widely.

The town of roughly 14,000 people has a robust set of regulations, including a permitting system that only allows short-term rentals in specific areas.

But Marcus Henry, the town’s supervisor of planning and development, said platforms like Airbnb don’t check whether property owners have permits. People are constantly making illegal listings.

The requisite hunt to fine and shut down these unsanctioned short-term rentals is a huge drain on the city’s time and money, Mr. Henry said. When a neighbour makes a complaint about an illegal Airbnb, town officials sometimes have to spend weeks investigating. In some cases, the town has to pay legal fees when a property owner denies wrongdoing. The typical fine for a short-term-rental operator is $2,500.

“It’s challenging from a cost perspective,” Mr. Henry said.

Nathan Rotman, Airbnb’s senior campaign manager in Canada, said the company notifies new hosts about the need to follow local regulations when they sign up, but he added that it’s simply not possible for the company to check for compliance before allowing a property to be listed.

“It’s too big of a country, too big of a world for that sort of thing,” he said.

He said enforcement is a municipality’s responsibility, but that Airbnb is able to help with investigations in some cases. The company has placed a global ban on parties at Airbnbs, and has a 24-hour hotline where neighbours can report concerns.

In a statement, the company said its statistics show that Airbnb guests spend an average of $142 per person, per day in the communities they visit, and that hosts earned an average of $6,000 per year each in 2021. It added that Airbnb collected and remitted $54-million in taxes for various levels of government in Canada last year.

One way Canmore has responded to the cost of enforcing its short-term rental rules is by raising property taxes on residences that operate as short-term rentals. Owners of those homes have to pay at the same rate as owners of commercial properties.

Municipalities in other jurisdictions don’t always have that option, though.

In Rossland, a mountain community of just under 4,000 people in B.C.’s Interior, any change to how a residential-zoned property is taxed requires BC Assessments, a Crown corporation, to get involved, according to Rossland city councillor Janice Nightingale.

“We’ve tried before and run into the issue of, we can’t do that,” Ms. Nightingale said. The town has imposed restrictions on short-term rentals that have effectively limited them to one per street.

In many B.C. towns, the concern isn’t so much about rowdiness, but rather the impact short-term rentals have on extremely competitive property markets.

The average price of a home in Rossland jumped 33 per cent from 2020 to 2021 -- from $380,000 to $504,000 -- and the city’s rental market remains tight.

Back in Tiny, Ms. Hierholzer’s husband, Jurgen, said the summer season has only just started. The community’s new rules likely wouldn’t come into full force until the beginning of 2023.

In the meantime, all he can do is hope for bad weather on weekends.

“That way we know that they can’t go outside at night and we’ll get a nice sleep,” Mr. Hierholzer said.

“How’s that for a retirement dream? Hoping for bad weather.”