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Vancouver's short-term rental fee was bumped to $1K. Has it made a difference?

The goal of the bylaw is to encourage homeowners to return their properties to the long-term rental market.
A new $1,000 business licence fee for short-term rental operators came into effect Jan. 1, 2024. The previous fee was $109.

The new $1,000 fee for a short-term rental business licence in Vancouver has been in effect for more than a month now but whether it is the sole reason the city has seen a slight drop in applications from homeowners is difficult to say.

That is the conclusion of Sarah Hicks, the city’s chief licence inspector, who noted not all homeowners seek licences at the beginning of the year, with the summer months being an attractive time to rent a property for a short-term stay.

At the same time, city hall processed 137 new business licence applications in January for short-term rentals compared to roughly 200 in January 2023, according to Hicks.

“I think it's a bit early to tell,” she said of the effect on city council’s decision to increase the fee from $109 to $1,000.

In addition, new provincial regulations for short-term rentals are in play this year.

Whether the new regulations, which include some requirements already set out in Vancouver’s bylaws, will have a cooling effect on homeowners wanting to share their homes is another unknown, Hicks said.

“If it's related to the fee, or if it's related to the provincial regulations, it will be hard for us to know,” she said.

ABC Vancouver Coun. Lenny Zhou successfully moved a motion to increase the short-term rental business licence fee to $1,000. Photo Mike Howell

Coun. Lenny Zhou

City council approved the $1,000 fee last fall after ABC Vancouver Coun. Lenny Zhou successfully argued an increase was warranted. At the time, Kelowna was charging $345, Squamish $500 and Nelson ranged from $200 to $800.

Vancouver’s short-term rental licence program has operated since 2018.

In an interview Monday, Zhou said he was pleased to see a drop in the number of applications but emphasized his goal was not to prevent homeowners from renting their homes via a home-sharing platform.

“We want to support our short-term rental operators because we know there's a big shortage of hotel space in Vancouver, and we need to support our tourism industry,” he said.

“We also know that owning a home is very expensive in Vancouver. So we encourage those people who are able to do the short-term rental — maybe as a mortgage helper — to follow the rules. That's the bottom line.”

Zhou has estimated revenue from the new fee would generate $2.7 million per year. He recommended the proceeds be used for enforcement of illegal short-term rental operators. Staff is expected to provide an update on the city’s short-term rental program in the spring.

Remove illegal listings

Some of the new provincial regulations include having all home-sharing websites provide data on listings to the provincial government. Vancouver already has an agreement with Airbnb to provide data but not all listings in the city are posted on that platform.

The provincial legislation, which also includes the creation of an enforcement team and a registry, will allow government to order home-sharing companies to remove illegal listings from websites.

“It's going to be great to have data across all platforms that are in the market,” Hicks said.

“We have the [memorandum of understanding] with Airbnb, but we don't get anybody else's. So having that data is going to be amazing. I can't even imagine how amazing that's going to be for jurisdictions that have zero data today.”

As of Feb. 1, there were 5,228 active short-term rental listings in Vancouver, according to the city’s website.

The City of Vancouver said in an email Tuesday that short-term rental operators will often list a property on multiple platforms, but only require one licence. So the number of licences issued — 2,115 as of Feb. 1 — will not match up with total listings.

"An STR operator can also use one licence and list multiple rooms in the same unit, but can only accept one booking at a time," the city said.

"It’s important to note that some online listings may fall out of the city’s STR regulations, and these operators may choose to list online without a business licence or use 'exempt' in the [application form for a business licence]."

Some of those listings include rentals that are longer than 30 days, hotels, and bed and breakfasts.

Listings outside of the city include those on University Endowment Lands, at the University of B.C. and on the reserve lands of the Musqueam, Squamish and Tsleil-Waututh nations.

The city reported almost 6,000 listings in January 2020, but that number dropped significantly when the pandemic was declared in March 2020.

“Short-term rentals are dependent on tourism,” Hicks said.

“So there was definitely a dip [during the pandemic] and it has certainly come back. Whether or not there will be continued growth, or if we'll see that interest plateau or even decrease — now that we're going to have provincial regulations coming in this year — it will be interesting to see.”

Airbnb most popular in Vancouver

Previous city staff reports have indicated Airbnb is the largest of the home-sharing platforms offering short-term rentals in Vancouver, accounting for at least 82 per cent of all active listings.

A city report released in 2022 showed the West End, downtown and Kitsilano were the most popular neighbourhoods for short-term rentals.

Since the city allowed homeowners in 2018 to obtain a licence to rent their homes for short-term stays, 1,550 licences have been suspended, 2,355 violation tickets issued and 210 listings referred to prosecution.

The city first began regulating short-term rentals in April 2018.

Under the bylaw, a person who provides temporary accommodation in a dwelling unit other than a bed and breakfast or hotel is deemed a short-term rental operator and is required to obtain a business licence.

The accommodation must be provided in the operator’s principal residence. The bylaw says an operator can rent their entire home, or a room within that home, for less than 30 consecutive days at a time.

The city's primary goal in bringing in the bylaw was to encourage homeowners to return their properties to the long-term rental market. Vancouver's rental vacancy rate has been below one per cent for several years.

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