Restrictions loom for short-term rentals such as Airbnb

Municipalities, strata corporations respond to concerns about dwindling rental stock, unfair competition for bed and breakfasts   
Brian and Linda Cooper have operated the Stone Hedge Bed and Breakfast in Richmond since 2001 | Chung Chow

Metro Vancouver municipal governments are grappling with ways of dealing with the rapid rise in short-term rentals being offered via companies such as Airbnb and VRBO.

The rentals provide an opportunity for homeowners or tenants to make some quick cash by renting out their homes when they are on vacation.

But they cut into the region’s stock of long-term rental housing and unfairly compete with bed and breakfast owners, who must conform to strict safety regulations, inspections and business licence fees.

“We first complained to the City [of Richmond] about Airbnb three years ago, when there were 54 of them listed,” said Brian Cooper, who co-owns the Stone Hedge Bed and Breakfast in Richmond with his wife, Linda Cooper.

“Two years ago, there were 400 Airbnb homes listed, and at the end of last year, there were 800 listed.”

The Coopers have operated their bed and breakfast part-time since 2001 and full-time since Cooper retired two years ago. Their marketing on Booking.com and Expedia was paying dividends, and the venture was a success.

Unlike many if not most Airbnb hosts, however, the Coopers took food-safety courses and paid the City of Richmond for a business licence.

They have had fire inspections and met requirements to equip each room with a fire extinguisher and post on doors fire-safety procedures and fire-escape routes. Safety requirements also prohibit them from allowing guests to use cooking facilities.

Airbnb operations often skirt those safety regulations, Cooper said.

“Everything that the City of Richmond has done is excellent,” he added, referring to new regulations that the City of Richmond instituted in April that required all short-term-rental hosts to operate as if they were a bed and breakfast business.

“They’ve also put a buffer of half a kilometre between bed and breakfasts so there can’t be five on one block and ruin a residential neighbourhood.”

Richmond followed the lead of the City of Coquitlam, which also bans short-term rentals in secondary suites and investment properties and requires anyone who wants to rent out rooms in their primary residence to get a business licence and operate like a bed and breakfast business.

Richmond homeowners are not allowed to rent out their entire primary residence, even when they’re on vacation.

Other Metro Vancouver municipalities have rules on short-term rentals that range from no restrictions at all in the City of Surrey and District of West Vancouver to City of North Vancouver regulations that allow homeowners and tenants to rent out their primary residences but not secondary suites or investment properties.

The City of Vancouver is holding public hearings this fall on proposed restrictions.

With most cities only recently starting to implement restrictions, much regulation has fallen to strata corporations, many of which have placed restrictions on short-term rentals in strata bylaws.

A Supreme Court of British Columbia ruling in June gave strata corporations even more clout to restrict short-term rentals, although a lawyer who specializes in strata law told Business in Vancouver that there are still pitfalls that strata members should be aware of when drafting restrictions on allowable rentals.

For example, problems can arise when strata corporations allow owners to rent units but stipulate that rentals must be longer than 30 days, said Lesperance Mendes Lawyers partner Paul Mendes.

The June case (HighStreet Accommodations Ltd. vs. The Owners, Strata Plan BCS2478) upheld a strata’s right to pass a bylaw that banned short-term rentals in all units and rejected HighStreet’s argument that it should be grandfathered and exempt from new rental restrictions because it had been operating as a rental business before the strata passed new rental restrictions.

Mendes said that although the ruling affirmed strata corporations’ ability to restrict short-term rentals in the rental-restriction segment of its bylaws, he would still advise those corporations to put the restrictions in a different section of its bylaws.

“Put the restriction in the standard bylaw that deals with use of strata lots,” he said.

“That restricts a whole bunch of ways in which strata lots can be used. Hotel use is what people are usually concerned about so I’ve always advocated going with a use restriction as opposed to a rental restriction.”

Mendes said the nuance is key because of a B.C. government change to the province’s Strata Property Act in 2010. It allowed developers to put a notation on disclosure statements for units in new buildings preventing strata corporations from restricting rentals on any units.

A strata corporation unaware of the 2010 restrictive notation would therefore likely lose any court battle if it tried to enforce a bylaw restricting rentals.

Were the strata corporation instead to prohibit a unit from being used as a quasi-hotel room, Mendes said it would have a better chance of winning in court.

Here is how some Metro Vancouver municipalities are regulating short-term rentals:

City of Surrey:

There are no restrictions specifically aimed at short-term rentals in Surrey, according to acting general manager of planning and development, Ron Hintsche.

City of Richmond:

Home owners or renters must operate a short-term rental in a similar way to a bed and breakfast. They must pay a fee for a business licence and may not rent out their entire primary residence nor any part of a secondary suite or investment property.

Richmond Mayor Malcolm Brodie told BIV that city staff is proactive in checking listings to ensure compliance and that fines for breaking the city’s bylaw are $1,000 per day, although that fine has yet to be levied.

Corporation of Delta:

No regulations yet govern short-term rentals but Delta Mayor Lois Jackson told BIV that she plans to ask the corporation’s staff to draft a report on the issue.

City of Burnaby

No regulations yet govern short-term rentals but Burnaby Mayor Derek Corrigan told BIV that council has asked staff to investigate how other cities have approached the issue and what regulations have worked best.

“We’re hoping a report comes back soon,” he said.

City of Coquitlam

Home owners and renters in Coquitlam are allowed to host short-term rentals in their home as long as they are present in the home and the rental is for a maximum of 40% of the square footage of the dwelling, said the city’s general manager of planning and development, Jim McIntyre.

Short-term rentals are not allowed in secondary suites or investment properties in Coquitlam. Hosts must essentially operate as though they are running a bed and breakfast, and they must pay a $85 fee for a business licence.

City of Vancouver

The city's website says that rentals in the city are not allowed but thousands of short-term rentals operate openly with impunity. This has spurred staff to recommend regulations on short-term rentals and public hearings are planned for this fall.

The public can then give feedback on staff recommendations, such as to allow a home owner or renter to host short-term rentals of their entire primary residence when they are on vacation. That short-term rental could also be for part of the primary residence.

Staff is also recommending that laneway homes, secondary suites and investment properties should not be eligible for short-term rentals.

Another staff recommendation is that those who host short-term rentals pay a $49 annual fee to be licenced by the city.

City of North Vancouver

All short-term rentals in the City of North Vancouver must be at the host’s primary residence and not a secondary suite, lane-way home or at an investment property, Mayor Darrell Mussatto told BIV.

The city does not require that hosts get business licences or pay the city any fees. City staff are not proactive in inspecting short-term rental locations but rather patrol based on complaints from neighbours, Mussatto said.

City of West Vancouver

There are no restrictions specifically aimed at short-term rentals in West Vancouver, according to director of communications, Jeff McDonald.

“It is not a priority for council at this point,” he said. “That could change if we see similar impacts as those happening in other municipalities.”

gkorstrom@biv.com 

@GlenKorstrom 

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