Similar to a proposal recently made in Toronto, the City of Vancouver will vote this week to adjust the rules on short-term rentals.
The city is proposing regulations that only allow homeowners and renters to list primary residences on sites like Airbnb and Expedia’s HomeAway. Those who qualify would be required to pay an annual licensing fee of $49, a one-time activation fee of $54, and as much as a three per cent transaction fee on all stays.
Under the new rules, secondary residences, basement apartments and laneway homes, would not qualify for a permit, and violators could face legal action on top of a $1,000 fine.
Another attempt to cool down the market
As Canada’s priciest housing market and one of the hottest markets in the world, Vancouver is currently experiencing a near rock-bottom supply of long-term rental units, with a 0.8 per cent vacancy rate.
“Short-term rentals have gobbled up a lot of the long-term rental supply,” Mayor Gregor Robertson said. “Right now there’s not enough rental housing to keep the city functioning as it should.”
There has been speculation on what caused Vancouver’s housing market to become so unaffordable and competitive, with the finger being pointed at foreign investment, as well as short-term rental services like Airbnb.
In response, the British Columbia government introduced a vacant home tax back in January and a foreign buyer’s tax last August. However, the foreign buyer’s tax was scaled back this past March as it didn’t yield the results the province expected.
The majority of short-term rentals will still qualify
The city estimates that there are currently over 5,000 active short-term rental listings in the Vancouver area and of these it’s estimated that 70 per cent will qualify for the short-term rental business permit. The city projects the new rules will force over 1,000 units back into the long-term market.
Back in June, the City of Toronto also proposed regulations to limit short-term rentals to only principal residences. If approved, the city expects over 40 per cent of the estimated 7,600 active rental properties on Airbnb in Toronto to no longer qualify.
If the proposal in Vancouver is approved at this week’s council meeting, the new rules will take effect April 1, 2018.