Vancouver to raise short-term rental licence fee almost tenfold to $1,000

Vancouver councillors will increase the licence cost for short-term rentals in the city from $109 to $1,000 next year.

The nearly-100-per-cent increase will mean property owners — behind close to 4,500 active rentals on sites such as Airbnb — will face a further barrier to earning revenue from suites in the rental-strapped, high-cost city, whose leaders say they're struggling to finance city services.

Patrick Baldwin, who has been an Airbnb host for the past five years, says the new licence fee will affect his family's ability to live in Vancouver, as the income through Airbnb has made his mortgage affordable.

"In a city where home ownership is nearly impossible for young families, we have been able to make that work, but these new changes are going to make it even harder for people like us to achieve or maintain home ownership," said Baldwin, a software engineer, in an email to CBC News.

"It really does feel like a slap in the face."

Effort to ease property taxes

The hike was part of a suite of fee increases approved Wednesday at city hall in an attempt to raise revenue to offset a proposed property tax increase of over nine per cent forecast for the 2024 budget.

At a meeting Wednesday, two reports went before a finance committee about proposed fee increases, with one outlining initiatives that could cut the property tax hike currently needed to balance the 2024 budget by 1.4 per cent, or $15.2 million.

The other report sought approval for increases to a variety of fees, including a hike in business licences from $171 to $250 and a $12 increase to the dog licence fee.

For short-term rentals licences, such as those for people renting their suites on Airbnb, staff recommended increasing the fee from $109 to $450.

Coun. Lenny Zhou successfully amended the motion to increase the short-term rental licence fee to $1,000.

On X, formerly known as Twitter, Zhou said the additional revenue from the hiked fee will be used to "improve enforcement, invest in technology and promote public education" over illegal short-term rentals in the city.

"Raising fees and strengthening enforcement must go hand in hand," he wrote. "The signal is clear: we're taking illegal STR [short-term rental] seriously."

Short-term rentals have been controversial for a number of reasons, including noise issues from rentals used for parties, potential safety issues, and contributing to a depletion of housing stock in cities with low rental vacancy rates.

Part of Zhou's amendment included staff to find "the potential for additional enforcement activity to combat illegal and non-compliant STRs."

Sarah Hicks, Vancouver's chief licence inspector, said in an email to CBC News that the city's STR enforcement team is comprised of six enforcement clerks, one enforcement co-ordinator and one dedicated property use inspector.

She said the team does mostly digital-based enforcement by reviewing online listings and responding to complaints through 311 and the Van311 app.

Vancouver, Kelowna and Victoria, among other jurisdictions, restrict short-term rentals to units where owners can prove either they or someone else lives on the property as a primary residence, with possible fines for infractions.

In the spring, the B.C. government said it was working on legislation to allow communities to "better regulate" services like Airbnb. It follows a directive in Quebec to require the Airbnb app to only list rentals that have been registered with the province.

'Dramatic and unnecessary': Airbnb

In a statement, Airbnb said the new licence fee would be prohibitive for its hosts in Vancouver.

"With a primary residence restriction already in place, this dramatic and unnecessary fee increase hurts regular Vancouver citizens who are trying to make ends meet in an already expensive city to live in," said the statement from Nathan Rotman, policy lead with Airbnb in Canada.

An Airbnb pin is held up against the backdrop of Ottawa City Council as councillors in that city looked at ways to regulate short-term rentals there in early 2023. (Kate Porter/CBC)

Airbnb said the fee for 2024 far outstrips what's being charged in other jurisdictions such as Toronto and Quebec, where fees are $53 and $50, respectively. Short-term rental licence fees in Whistler are $190 plus $25 per room, it said.

Coun. Adriane Carr said she voted for the amended increase in Vancouver because hosts have the ability to generate revenue to offset the licence fee.

"So, the ability to recoup those increases is higher than any other fee," she said, while agreeing that city staff needed more resources to enforce short-term rental rules in the city.

Airbnb told CBC News it would not disclose the average daily rate for properties listed on its website for Vancouver, but said the global average daily rate is $224 CAD.

Short-term rentals by the numbers, according to the City of Vancouver's website:

• There are currently 4,439 active short-term rental listings in Vancouver.

• 3,084 business licences were issued for short-term rentals in 2023, up from 2,557 the previous year.

• Since 2018, when Vancouver introduced short-term rental regulations, 2,253 licences have been flagged for investigation and audit.

• Since 2018, 1,010 legal orders were issued over short-term rentals (131 were issued in 2023).

'Balancing act'

Overall, the fee increases approved Wednesday are mostly of six per cent and include vehicles registered under the city's vehicles for hire bylaw, when they're used for services such as Uber or Lyft.

That could equate to about 15 cents more to hire a ride for the average trip.

In discussing the proposed fee hikes, some councillors said surveys of residents showed an appetite for upping fees to offset property tax increases. Others said raising fees was regressive and punitive.

Vancouver Mayor Ken Sim and his ABC slate want the city to find ways to raise revenue beyond annual property tax hikes. (Ben Nelms/CBC)

Councillors also approved other revenue-generating initiatives, such as opportunities like sponsorships, advertising, naming rights and even donations to the city.

"It's a balancing act. Where do we get the money from?" said Carr. "Given that our tools are basically fees for service and property tax, we don't have a lot of choices — and ... the public is saying we'd prefer to see fee hikes."

For 2023, city council endorsed a 10.7 per cent property tax increase. At the time, Mayor Ken Sim said increases in that amount could not become the norm.