Short-term rental license fee in Vancouver to be hiked from $109 to $1,000

Airbnb (Shutterstock)

The annual license fee within the City of Vancouver to use a home for short-term rental purposes, such as Airbnb, will grow exponentially by over 800%.

During Wednesday’s public meeting, Vancouver City Council unanimously approved ABC Councillor Lenny Zhou’s amendment to City staff’s recommendations on fee increases specifically for short-term rentals.

City staff had originally proposed hiking the fee from its existing rate of $109 annually to $450 annually starting in 2024. But Zhou said this is “not enough” and wanted to go even further, with City Council approving his proposed increase to $1,000 annually.

He estimates the increase in fees could generate roughly $2.6 million in new revenue for the municipal government per year, which could go towards offsetting the cost of improved enforcement of the regulations, cracking down on illegal short-term rentals, and improving public communications to homeowners who may not understand the regulations due to a language barrier.

With City staff’s original $450 fee hike proposal, they estimated it would generate $1 million in additional revenue per year.

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“In the past few months, I’ve been very concerned about illegal short-term rentals throughout the city. I strongly believe the fees must go hand-in-hand with stronger enforcement, otherwise, we risk encouraging more unregulated operators,” he said during the meeting.

“Many illegal short-term rental operators I’ve spoken to are unaware of the rules, and some of them may not speak English or have received incorrect information from their realtors. Allocating resources from public engagement and public education, especially to cultural communities to bridge the gap.”

According to ABC Councillor Peter Meiszner, Vancouver’s existing short-term rental license fee is amongst the lowest in the province, with many smaller communities charging much more, such as Kelowna’s fee of $345, Squamish at $500, and Nelson between $200 and $800.

“When you think about Vancouver and the challenges we have in terms of the housing crisis, I think that necessitates a higher fee for short-term rentals,” said Meiszner, before adding that there is currently a budget shortfall in covering the cost of short-term rental regulations and enforcement.

Green Councillor Pete Fry said he appreciates the intent of the amendment but found the $1,000 rate to be “arbitrary” as it was not produced through City staff’s analysis, and suggested such a hike might disincentivize some people who casually use their homes for Airbnb only when they are out of town.

ABC Councillor Sarah Kirby-Yung asserted the amended fee increase is “not dramatically bold” and “strikes a balance” when compared to the measures jurisdictions such as Quebec and New York City are taking to “effectively try to wipe out short-term rentals.”

Early this month, the Quebec provincial government’s new tourist accommodation law went into effect, creating fines of up to $100,000 for short-term rental platforms like Airbnb listing properties without a legal government certificate.

Also this month, New York City implemented new short-term rental policies that require property owners to register with the municipal government, with hosts also required to be physically present in the home throughout the duration of the rental — essentially sharing the live space with the paying visitors. As well, bookings with more than two guests at a time are no longer permitted, which eliminates Airbnb, VRBO, and others as overnight accommodation options for families.

Within Metro Vancouver, a shortage of hotel room supply has led to an increased demand for short-term rentals. But the leading concern for the growth of short-term rentals is that this much more lucrative and profitable opportunity is reducing rental housing supply for residents who live, work, and study in the community, which adds to the housing affordability and supply crisis.

The provincial government is also expected to roll out new policies regulating short-term rentals this fall.

City Council’s short-term rental fee discussions were part of a review of City staff’s framework for hiking various fees, including parking, rideshare, and permits. Through City Council’s previous direction, an increase in service fees is intended to reduce pressure on further major hikes to the property tax. Zhou’s amendment was the only significant deviation from City staff’s proposal.

The approved fee increases will be used as inputs for developing the municipal government’s 2024 budget, which is expected to be deliberated before the end of this year.

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