Is the City of Vancouver about to crack down on Airbnb?

City councillor Geoff Meggs says the company's impact on Vancouver's rental stock is clear. Now comes the tricky part—doing something about it

June 1, 2016

By Max Fawcett

Is the City of Vancouver finally cracking down on illegal Airbnb rentals? As Global reported on Monday, bylaw officers from the city have posted notices at a house in the West End that neighbours have been complaining about for the better part of a year. According to their story, the home at 1150 Comox St. was being rented out for $900 per night and claimed to have seven bedrooms—and their Freedom of Information request revealed that the homeowner has already been cited for a whole slough of related violations. “The attic was turned into a living space and that’s against the building code as well as the use,” Andreea Toma, the city’s chief licensing inspector, told Global.

Unfortunately—at least, for those concerned about the impact Airbnb rentals are having on Vancouver’s already stressed rental market—this probably isn’t the beginning of a major enforcement campaign by the city. Councillor Geoff Meggs, who’s taken the point on this issue for council, says that’s because enforcement itself is so challenging. “The problem is always establishing a burden of proof,” he says, “and the cost of enforcement is quite high. Airbnb and similar services put us into a completely new world where it’s relatively easy– very, very easy, in fact—and relatively difficult for enforcement to establish exactly what’s going on in the unit. The existence of a listing is not a violation, in and of itself.”

Berlin recently implemented a €100,000 fine for those found to be breaking the laws around short-term rentals, and it had the immediate effect of dramatically curtailing the number of properties being listed on the site. Meggs isn’t convinced that a major increase in the fine for people breaking the rules around short-term rentals is the right way to go, but he’s willing to consider it. “The size of the fine isn’t so critical, provided it’s paid and it’s effective. But if someone is making thousands of dollars a month from an apartment that’s illegally rented, then the fine may have to be much higher than it would be in current circumstances for a business license violation.”

Karen Sawatzky, the SFU master’s student who’s been writing her urban studies thesis research on Airbnb and its impact on Vancouver’s rental housing market, says that there are lessons that Vancouver can draw from Berlin’s experience regulating Airbnb. “Fines have to be enough to be a disincentive, because otherwise they’re just going to be considered a cost of doing business. Berlin and Santa Monica are the only two places I know of, as of now, where either new regulations or enforcement of existing regulations—which is the case in Berlin—have resulted in a drop in the number of short-term rental units. And I think there does need to be a drop in the number of short-term rental units in Vancouver.”

But as San Francisco has learned, creating a regulatory framework that’s designed to more closely monitor Airbnb and other similar services is no guarantee that it will actually work. According to an April report from the San Francisco Budget and Legislative Analyst’s Office, non-compliance is rampant in the city by the bay. Nearly 80 percent of the city’s unique Airbnb hosts had not registered with the newly created Office of Short-Term Rentals, while an estimated 26.2 percent of the city’s 4,033 entire home listings were in breach of the 90-night cap. According to the BLAO, those listings had a median occupancy of 176.4 nights per year.

That’s why David Campos and Aaron Peskin, members of San Francisco’s Board of Supervisors (the legislative body within the government of the City and County of San Francisco), tabled proposed legislation in late April that would see booking platforms like Airbnb penalized $1,000 per day for each unverified listing. The City of Los Angeles is also considering a regulatory approach that targets the platforms as well as the individuals who are actually breaking the law, and Sawatzky says this is an approach that Vancouver ought to look hard it. “Los Angeles is saying that the platforms have to supply monthly booking logs, and if the city asks them to remove a listing because it doesn’t have a permit or it’s illegal they have to do that within a certain amount of time—and if they don’t, there’s a fine on the platform. Those are the kinds of provisions that I think we’re going to need.”

Councillor Geoff Meggs has asked City of Vancouver staff for a report by this fall on the matter, one that would include substantive recommendations on how to tackle the challenges posed by Airbnb and other similar sites. And while there’s been plenty of attention on the soaring cost of buying a house in this city, he says the rental side of things has been largely ignored. “There’s an obsession in this city with empty condos, but there’s been very little discussion so far—except among renters—about apartments that would be available for permanent residents if they weren’t being used by tourists. To me, there’s an opportunity to make an immediate positive impact in our accommodation market if we free up units that are improperly used for tourists.”

He knows there will be pushback against anything the city does to regulate the short-term rental market more stringently. Yes, there will be the direct lobbying that a company like Airbnb, which has been given a $20-billion plus valuation, can easily afford to fund. But there will also be resistance from local homeowners who have been using Airbnb to subsidize their massive mortgages, not to mention people who have had positive experiences using the service while travelling to other cities. If and when that comes, though, Meggs sounds like he’s ready. “There’s been some resistance from people who want to rent their suites out and say that it’s an income inequality problem for them, but I don’t have any patience for that argument. They’re violating the law, and taking the opportunity for affordable housing away from other people. In my view, there’s a right to housing in society—not a right to illegal rental income. If people want to get into the tourism market, there are legal ways to do that.”

The challenge is that even if the City decides to pursue a more hands-on approach to the short-term rental market, it will need to find the resources—fiscal and physical—to do the job. That won’t be easy, Meggs says, given the demands that are already being placed on the city’s enforcement staff by marijuana dispensaries and the ever-present possibility of ride-sharing apps like Uber re-entering the market. “Licensing in the municipal field is turning out to be quite a challenging area these days,” he says. Still, if it really wants to free up some of the units in Vancouver’s accommodation market that are currently being set aside for tourists, Karen Sawatzky says it’s going to have to put its money where its mouth is. “The City of Vancouver is not eager to take on those kinds of expenses, but without some proactive enforcement I don’t see much hope for the situation getting any better.”

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