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Airbnb started to assume a more co-operative approach at the tail end of 2015.

AFP / Getty Images

Every now and then, a show of diplomatic excellence emanates from Vancouver city hall. Most recently, a deal was struck between city bureaucrats and Airbnb, the San Francisco-based, vacation-rental behemoth.

Under the agreement, a North American first, Airbnb has agreed to help the city enforce restrictions on short-term rentals that don’t meet new rules designed to protect scarce rental stock. As of April 19, Airbnb hosts are prohibited from renting space outside of their primary residence, a move the city expects will pare about 1,200 offerings from a roster of 6,600.

Airbnb has agreed to immediately block new listings unless hosts show a valid city business licence. Existing hosts have until Aug. 31 to comply or lose listing privileges.

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Now, this was likely not the easiest sell to a company that had operated unfettered in this market for nearly a decade. Like its contemporary Uber, which competes against the taxi industry, Airbnb hasn’t shied away from protecting its turf in court. The company has been embroiled in court cases with cities far larger than Vancouver, including San Francisco, New York and just last week Paris, which is suing Airbnb for failing to comply with local laws restricting rentals.

Airbnb started to assume a more co-operative approach at the tail end of 2015 with the release of its community compact, which stated, “We are 100 per cent committed to being constructive partners with regulatory agencies and policy makers. Our community wants to pay their fair share.”

Industry watchers noted the company began to muse about taking Airbnb, now valued at US$31-billion, public about a year later, but Airbnb’s Canadian public-policy manager insists the two things were unrelated. “For many years now, we’ve made it clear we want to collaborate,” Alex Dagg said.

Vancouver, faced with low vacancy rates and rising rents, started in 2016 to look for ways to curtail short-term rentals. Negotiations with Airbnb were under way when Kathryn Holm assumed her role as the city’s chief licence inspector in February, 2017.

A survey of Vancouver’s short-term rentals showed Airbnb controlled 88 per cent of the listings. “They are the major player here … so it was really important for us to keep having … conversations with them,” said Ms. Holm, who became lead negotiator.

This was no five-minute meeting. Negotiations, which Ms. Holm described only as “candid,” went on for months. Vancouver held fast on no rentals of self-contained suites; Airbnb defended its hosts, many of whom rely on the extra income to get by in an increasingly unaffordable city.

To sweeten the deal, Vancouver designed an online system to make it simple for Airbnb hosts to obtain a licence. This contrasted with San Francisco, which initially forced hosts to apply in person at city hall.

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Ms. Dagg says the digital licensing system was key to the deal. But she also credits the Vancouver negotiating team’s open-mindedness about a new business that some municipalities were quick to write off as an evil disrupter. “We didn’t agree on everything,” she said. “But they were always very thoughtful and understanding of the value home-sharing provides to Vancouver families.”

Toronto has recently passed a bylaw much like Vancouver’s, requiring hosts to be licensed and prohibiting rentals outside of primary residences. And Montreal is looking for ways to limit short-term rentals in its downtown core. Neither has reached an agreement yet with Airbnb, but Ms. Dagg says she’s willing to talk.

Meanwhile, there is no shortage of negotiating left for Ms. Holm. Other short-term rental listing services such as Expedia-owned VRBO have so far not signed agreements. So, will scofflaws simply jump to another site? The city will be watching. Ms. Holm points out a bylaw has been passed and anyone caught breaking it will be subject to fines of up to $1,000 a day.

Ms. Holm will continue to push for more agreements, but if negotiations break down, she has muscle to fall back on. It will be a different type of bylaw enforcement, she says − more computer terminal sleuthing than “boots on the ground.” And with a deal already signed with the biggest player in the vacation-rental game, there is a good chance Ms. Holm’s persuasive powers will soon bring the others in line.

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