Efforts to crack down on illegal vacation rentals in Canmore are causing tension, as homeowners facing $2,500 charges for a first offence lose appeals against stop orders and fines issued by town officials.

After running an informational campaign to educate residents about the rules around short-term rentals, such as those advertised on websites like AirBnB and VRBO, the town of Canmore started issuing fines to first-time offenders.

Those fines are now being levied without a warning or grace period after the homeowners are caught.

John Borrowman, mayor of Canmore, says heavier-handed bylaw enforcement is working when it comes to short term rentals in residential neighbourhoods. (Anis Heydari/CBC)

"I know it feels very heavy handed to the residents ... but I'm certain it's going to focus the intent of the community, of the council to maintain compliance with our existing bylaws," said Canmore Mayor John Borrowman.

I know it feels very heavy handed... it's going to focus the intent of the community. - Canmore Mayor John Borrowman

Regulations around where tourist rentals are allowed in Canmore have been in place for years, but were typically only enforced on a complaint basis.

"[This changed] because of the various concerns within the community... around the impact to residential neighbourhood of having visitors on a nightly basis and the erosion to our long term rental inventory," explained the Mayor.

"A little more than half [of those ticketed] became compliant right away," he added.

Three of three appeals lost so far

However, several homeowners have appealed the stop orders and associated fines. Three of those appeals have been heard so far, in front of Canmore's Subdivision and Development Appeal Board.

"All three appeals were denied. The SDAB said the application of the stop order was appropriate," said Borrowman.

However, according to the mayor, the SDAB cannot address the $2,500 fines.

"Specifically to have the fines or tags removed or reduced ... it's the court system that will address that," added the mayor.

Bylaws in Canmore allow renting out properties to tourists in commercial and mixed-use areas, but vacation rentals are not permitted in residential zones.

Short-term vacation rentals in Canmore are only allowed in commercial or mixed-use areas. (Anis Heydari/CBC)

A search by CBC News on both AirBnB and VRBO showed hundreds of properties available for rent, with most in locations with the correct zoning.

AirBnB and VRBO hosts with properties that appeared to be in residential zones did not respond to or refused requests for comment from CBC News.

Bylaw may be working

Some observers of Canmore's real estate market say the bylaw enforcement could be discouraging residential purchases for the purpose of short term rentals.

"The amount of buyers we see that are looking to purchase properties that are zoned residential and rent on a short term basis is very low," said local real estate agent Devin Stephens.

Devin Stephens is a real estate agent in Canmore. (Devin Stephens)

"The illegal rented suites is in properties that have been owned for many years and I think it's many owners that are kind of looking to get on the bandwagon."

Land use bylaw changes coming

Changes to the rules may come later this year. According to Mayor Borrowman, town council will be looking at amending the land use bylaw so some short-term rentals may be allowed in residential areas.

Those changes won't include allowing residential properties to be continually available on sites like AirBnb.

"That's a commercial activity and there is long term impact to the neighbourhood, so there's a lot of discussion to be had around that," said Borrowman.