Developer Onni has paid $24,000 in fines after news reports surfaced in March that it was still running short-term rentals at The Level, located at 1022 Seymour Street, despite warnings from the city that date back to last year.

According to a City of Vancouver press release, Onni "has agreed to immediately stop short-term rentals and to pay fines related to activity over the past six months, the legal statute of limitations."

Two other companies, Vancouver Extended Stay and Carmana Plaza, were also found to be "operating short-term rentals at a commercial scale," and have been referred to prosecution.

Short-term rentals not permitted

Short-term rentals are not allowed in Vancouver. Currently, only hotels and licensed bed and breakfast operators can rent residential units for less than 30 days at a time.

On Facebook, Onni's The Level continues to advertise itself as a hotel.

On Facebook Onni's The Level continues to advertise itself as a hotel. (CBC)

Companies that run illegal short-term rentals in contravention of zoning and licensing bylaws have been cited as a contributing factor in Vancouver's extremely tight housing market, removing much-needed, long-term rental units from the market.

It's not clear why Onni persisted in operating short-term rentals at The Level, despite last year's warnings from the city. Email and phone interview requests made to Onni were not returned.

According to the City of Vancouver press release, Carmana Plaza has been operating short-term rentals in 96 suites at 1128 Alberni Street, but does not yet have occupancy permits or business licenses to do so, despite a zoning change that will eventually allow it to operate as a hotel.

The City of Vancouver is cracking down on operators running illegal short-term rentals in buildings at 1288 West Georgia Street (left) and the Carmana Plaza at 1128 Alberni Street (right). (Cliff Shim/CBC)

Vancouver Extended Stay has been selling property management services to owners of suites at 1288 West Georgia Street and 1200 Alberni Street in contravention of city bylaws.

Preserving long-term stock

City of Vancouver director of licensing Kathryn Holm said policies are in the works to legalize some short-term rentals, but the "primary goal here is to keep as much stock on the market as possible for long-term rental use.

"We want to ensure there is sufficient access for long-term renters in this city," she said.

Vancouver's housing crunch and the proliferation of Airbnb-type short-term rental services have contributed to making short-term rentals a more lucrative prospect for owners than renting out units long-term.

Onni's parent company RPMG Holdings donated $50,000 to Vision Vancouver in the run up to the 2014 municipal election, and is a major donor to the B.C. Liberal Party, contributing $100,000 in 2016 alone.

Last year Onni was asked to repay $1.5 million for a construction fee discount it received from the City of Vancouver in error related to the Charleson Project condo tower on Pacific Avenue.