Vancouver limits Airbnb in effort to combat housing crisis

Trying to ease its severe housing shortage, Vancouver has moved to limit short-term rentals, a measure particularly targeting Airbnb.

The new regulations, passed last week by the City Council, bar businesses from offering short-term rentals through Airbnb and similar services; individuals will be allowed to rent only their principal residences. Suites in basements, above garages or in coach houses can no longer be offered as short-term rentals.

The city, the largest in British Columbia, is struggling with both exceptionally high housing prices and unusually low vacancy rates for apartments and houses. Officials hope the restrictions will free up more housing for long-term rentals.

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But an analysis of the regulations city officials prepared for the City Council offers no hard evidence that more apartments will become available but it characterized the measures as a way to protect further losses of rental units. And San Francisco’s Airbnb said Wednesday that the company might challenge the new rules.

Some members of the City Council voted against the regulations, saying they will not ease the city’s housing situation.

“Vancouver has become more and more unaffordable, we all know that,” councilman George Affleck said during the debate. “This policy is not going to deal with that. It’s going to create a bureaucracy.”

The new regulations also require all people offering their homes for rent in Vancouver to be licensed and pay an annual fee of 49 Canadian dollars. Unlicensed property owners could face a fine.

Enforcement of the system will rely mainly on officials plowing through Airbnb listings to search for unlicensed operators, although officials acknowledged in a policy document accompanying the regulations that “this is an imperfect approach” as it may be difficult to coordinate the listings with license data.

“We have 6,000 illegal short-term rentals in the city,” Vancouver Mayor Gregor Robertson said during the City Council meeting Tuesday. “We have to respond with these kinds of actions.

“There’s lots of positives to the sharing economy, but it is creating other complications, and we need to figure out how to regulate that,” he added.

A booming economy, foreign investors and other factors have sent house prices soaring in Vancouver. The most recent Canadian Real Estate Association index price for a typical home in the Vancouver area was just over 1 million Canadian dollars in October.

But slightly over half the city’s households lived in rented accommodations, which developers have largely ignored in favor of condominiums. The city estimates its currency vacancy rate at 0.8 percent and Vancouver has some of the highest rents in Canada. That is increasingly making it difficult for people in lower-paying jobs to live within the city and for some employers to find workers.

At the same time, the city’s popularity as a tourist destination, and generally high prices for conventional hotel rooms, have made it a thriving market for short-term rentals — the overwhelming majority of which, the city believes, are offered through Airbnb.

The city estimates that 27 to 39 percent of places being rented through Airbnb are not people’s homes.

Alex Dagg, public policy manager for Airbnb in Canada, said the company would continue to push Vancouver to allow homeowners to rent secondary suites — separate units within an individual’s primary residence.

“We really think it’s going too far,” Dagg said from Toronto before making a presentation to a City Council committee.

Dagg said the company’s data indicated that most secondary suites listed through Airbnb were used by family members, like students returning from college in the summer, and would not end up on the long-term rental market anyway.

Though she said that the company preferred to negotiate with Vancouver, it would not rule out challenging the ban on suites in court.

Other cities in Canada are also trying to limit Airbnb. Under proposed rules unveiled in June, Toronto is taking a slightly less restrictive approach; though it will limit Airbnb rentals to individuals’ primary homes, it will allow them to also offer one secondary suite.

Toronto, which estimated that about 20,000 properties were listed through Airbnb and other services in April, will make its final decision about new regulations early in December.

This year Quebec began requiring that property owners renting through Airbnb and similar services collect a lodging tax, which has long applied to hotels. Dagg said Airbnb is working with British Columbia to collect similar taxes there.

Several U.S. cities have also adopted regulations governing short-term rentals. The new measures in Vancouver will sit somewhere between those of New York City, which bans rentals in apartment buildings and other multiunit dwellings, and Austin, Texas, which requires little more than licensing and rules requiring operators not to create a nuisance.

Ian Austen is a New York Times writer.