Officials in Canmore are trying to cut down on the growing number of illegal vacation rentals in the mountain town.

Mayor John Borrowman says hundreds of homes in residential areas are posted on websites like Airbnb and VRBO, making an already dire housing shortage worse.

"Effectively it's beginning to turn residential neighbourhoods into hotel districts," he said.

"What we're seeing now is some of those long-term rentals, basement suites or whatever, being flipped into short-term rentals — which is illegal — and reducing the inventory of long-term rentals for people who work here."

Under Canmore's land-use bylaws, operating a tourist home in commercial and mixed-use areas, with a business licence, is legal. But vacation rentals are not allowed in residential areas.

Disputes sometimes go to court

The town is launching an information campaign to get the message out, and is giving its planning department extra funding to address the growing number of complaints from residents about illegal rentals.

"And if it is true, then the staff will help the owner of the unit understand that it's not legal, and issue a cease-use order. And if that cease-use order is abided by … then the problem disappears," Borrowman said.

"On the other hand — and this often happens — homeowners will fight the cease-use order and sometimes take it to provincial court. We don't have the resources today to be fighting every single instance in the courts."

The fines for illegal rentals can be as high as $5,000.

'Fair playing field'

Andrew Shepherd, president of the Canmore Hotel and Lodging Association, is happy the town is going after illegal short-term rentals.

"The hotels have no problem with competition. But every competition should be on a fair playing field," he said.

"So if we're paying business taxes, they should too. If we have health and safety inspections, they should as well."

Borrowman says the town's housing corporation has recently built new, affordable rental housing. The town has also worked with the private sector on two housing projects that will add about 250 long-term units to the rental market.

"This is not a new problem in the town of Canmore, and it's very similar to what they experience in other tourism-based communities, particularly in the mountains," he said.