Short-term Rentals: Legal but Limited

Despite Airbnb ads popping up all over the internet, short-term rentals (defined as rentals for less than 30 days) are not allowed in Vancouver except for hotels or bed and breakfasts (B&Bs) that have been properly zoned and licensed.

However, this has not stopped an estimated 6,000 illegal short-term rentals from operating around the city. Homeowners complain that a blanket ban on short-term rentals will deprive them of much-needed income, and there has been heavy resistance by many homeowners to any type of regulation.

In an effort to find a balanced approach, which aims to respect the rights of homeowners amidst Vancouver’s housing crisis where rental rates are less than one percent, the City of Vancouver
has introduced new regulations they believe are a fair solution to all parties concerned. Beginning April 2018, short-term rentals will finally be legal in Vancouver.

Does this mean it’s time to move to France and list your Vancouver vacation home on Airbnb? Not so fast. Vancouver has placed several stringent limitations on short-term rentals:

1. The rented property must be your principal residence.

This limitation is more complex than it first appears. The principal residence exemption means that you, as a homeowner, can only rent the property you are currently living in, as proven by the address on your mail, your bills and other similar items. Since the property must be your principal residence, you are not allowed to rent your second apartment or vacation home in Vancouver as a short-term rental. You are also not allowed to rent your laneway house, lock-off unit or basement suite as a short-term rental, even if it is within your property, unless you are actually living in that suite or laneway house (as a tenant, for instance). This means you are limited to either renting your entire house, if  you’re away, or individual rooms within your house if you are living there.

2. You will need a short-term business licence.

Purchasing this new class of business licence will cost you $49 a year plus a one-time administration fee of $54. Each business licence will come with a unique number, which must be displayed on all online listings. If authorities find your property listed online without a licence number you can be fined $1,000 per violation. To enforce this new policy, the city plans to improve its enforcement mechanisms, including a dedicated enforcement coordinator and an additional inspector to support complaint-driven and auditing inspections. Platforms like Airbnb will also be required to charge and remit PST and a 3% transaction fee, which will go to administration and enforcement of the licensing regime

3. You will need to be authorized.

In order to secure a business licence, you will need to be properly authorized either by your strata council, if you live in a strata unit, or by your landlord, if you’re renting out your principal residence.

4. You need to follow the new rules.

Your short-term rental property must comply with all applicable regulations including those relating to building codes and fire safety. You will also have new duties, such as posting a safety plan by all entrances and exits of the rented room and producing inspection, maintenance and construction records regarding the fire alarm system and fire separators.

The city projects that about 1,000 units will be freed for long-term rentals with these new regulations. It has also promised to reassess the ban on secondary suites if Vancouver’s rental vacancy rate reaches four percent.

We will have to wait and see how the rules affect the rental market and whether the city will loosen the tight restrictions on short-term rentals in response. Until then, you may wish to rethink your move to France.