Vancouver has joined a growing list of cities around the world grappling with both the new sharing economy and housing crises, proposing new restrictions for short-term rentals through platforms such as Airbnb.
Mayor Gregor Robertson and staff outlined a proposal Wednesday for new rules that would restrict rentals to homes that owners or renters live in most of the time and only rent out occasionally. Full-time listings in otherwise vacant homes, which have been blamed for taking long-term, stable rental housing off the market, would be prohibited.
"At a time like this, when affordable and rental housing are in a crisis, it's incumbent upon the city to take bold steps," the mayor said.
Anyone renting short term would need to get a permit, post the number on the listing site and likely pay some equivalent of a hotel tax. There are 13 short-term-rental platforms now operating in the city, although Airbnb is the largest.
Staff won't issue permits for condos or houses that are investment properties designed to be rented out to short-term vacationers.
Nor will they give them for basement suites or lane-way houses, even if the owner lives full time in the main part of the house.
The move has prompted praise from housing advocates who say it will help ensure that desperately needed rental units aren't being turned into hotel businesses.
"It looks like the city is allowing housing to be the driver on this issue, rather than taxes or tourism," said Karen Sawatzky, a Simon Fraser University graduate student whose research on Airbnb for her thesis helped inform public opinion on the issue the past year.
And it is already generating criticism from those who see it as an ineffective effort to deal with housing problems caused by lack of supply or a bureaucratic intrusion on private-property rights, or both.
SFU business professor Andrey Pavlov said the new rules are an unneeded piece of micromanaging into something the city shouldn't interfere with – the agreement between two private individuals about renting a space.
He also said the city is using this inefficient tool to solve a problem of its own making – the lack of housing supply.
"The development process in Vancouver is incredibly cumbersome. It's the City of Vancouver that is in large part responsible for the housing crisis."
While some will agree with Prof. Pavlov, the political reality that Vancouver councillors are facing is that people are clamouring for instant action to solve a dire housing situation, which has seen real-estate prices rise by an astronomical rate in recent years, while rental costs are also skyrocketing at the same time that vacancies are near zero.
The city's report on the new regulations says there were about 4,000 Airbnb listings in Vancouver for entire units in June of this year, and it estimates about 1,000 of those could be prohibited under the new rules, potentially opening them up for long-term renters.
Airbnb has denied that its service is having a major effect on housing in Vancouver, suggesting that full-time listings that could otherwise be used as a long-term rental represent just a small fraction of its business. Instead, the U.S.-based company argues that Airbnb allows homeowners to help make ends meet.
The company says it's reviewing the City of Vancouver's proposed rules.
Vancouver is far from the first city to bring in new rules to deal with the sharing-economy platforms that have flourished in the past decade, allowing renters and landlords to connect directly for short-term rentals of anything from a bedroom in a shared apartment to a van to an entire house or condo.
This is the third new housing policy that Lower Mainland residents have seen in recent months, as both provincial and local politicians have bowed to popular opinion. The province introduced a stiff 15-per-cent sales tax for foreign buyers of residential real estate as of Aug. 2. And two weeks ago, Mr. Robertson announced the city would be implementing a tax as of 2017 on secondary residences left vacant for lengthy periods during the year.
Many cities in Europe and North America have been moving to regulate Airbnb-type platforms, demanding that they have special permits or limiting the number of nights per year a unit can be rented out.
Vancouver chose not to put a cap on the number of nights, although staff considered that seriously.
"Other cities we looked at said that it was difficult to monitor," said Kaye Krishna, Vancouver's general manager of development services.
Ms. Sawatzky said that, although the Vancouver policy is generally good, it did avoid tackling two problems.
The city's policy will allow someone to rent out a spare bedroom in their house or condo. That takes away much-needed, cheap space away from low-income workers, she said.
"Lots of people in this city are working full time for minimum wage and they can't rent something on their own. So where are those people supposed to live?"
The city also didn't propose fining the platform operators if individual owners don't get the required permit, something that Barcelona has done.