Across North America, most jurisdictions have a rule similar to Nelson’s: that ‘short-term rentals’, defined as one month or less, are subject to different zoning and regulatory rules than long-term rentals, which are generally permitted in any residential unit in any residential zone. Municipalities have implemented a wide range of policies, from requiring neighbour notification or business licences to limiting the number of days per year one individual may rent their home short-term, to essentially banning short-term residential rentals.
Some cities have imposed legal restrictions that make short-term rental (e.g. “Airbnb”), especially in single-family zoned areas, effectively illegal – for example: Atlanta, Denver, Oklahoma City, Miami Beach, and Tiburon (California).
Many cities have taken a more nuanced approach. The following is a brief overview of examples of regulatory approaches from near and far.
Gabriola Island, due to an increasing number of complaints, began discussing the implications of short-term rentals in 2004, well before the creation of today’s popular online platforms. It requires potential hosts to go through a longer approval process than a typical business licence and imposes numerous requirements, from a 24/7 local contact person to a “written water supply plan” to proof of parking and a fire inspection. Some Gulf Islands require a temporary use permit (TUP), which is valid for three years at the cost of $1,100 and a renewal for another three years is just under $200.
Kaslo’s chief administrative officer has stated that the “Village would also support greater business licensing and other bylaw compliance for [short-term rentals]”.
Pemberton passed a motion in December of 2015 to direct bylaw enforcement to visit local short-term rental listings to “explain and educate that they are operating in contravention of our zoning bylaws and must cease operating immediately.” The approach is mostly about “education” for now. There are three hurdles for any short-term rental listing to pass through in order to be considered legal: commercial zoning, a business licence, and meeting parking requirements.
Penticton requires a $175 annual business licence and a $200 tourism fee. A safety inspection is required. Fines for illegal short-term rental operations run up to $500.
Revelstoke has a vacation rental bylaw which permits short-term rentals in all single-family residential zones. Home owners apply to the city and the neighbours are notified so they can have their say at a public hearing. Once approved, a home can be operated as a vacation rental for 120 nights per year. A cap on guests is stipulated and no signage is permitted. “Vacation rentals” are responsible for ensuring guests park within the allocated parking areas and they must provide 24/7 contact information to the city and to guests. Uptake on licensing has been slow, according to media reports. After the bylaw was passed in July 2014, the city sent out letters to all known vacation-rental owners asking them to legalize. Only eight applications came forward and six were approved. One was turned down after unanimous opposition by neighbours and another was withdrawn.
Saturna Island issues a short-term rental permit valid for up to three years at a time.
Sechelt requires a short-term residential licence. Conditions for approval include a local contact (which may not be the same person for more than two separate properties, unless the local contact is also the registered property owner), a written record of all guests, notification of all neighbours within 100 meters (including informing them about the local contact person), and a $1,000 deposit.
Squamish announced in March of 2016 that it would be investigating the effects of short-term rental. That area, similar to Nelson, has very low rental vacancy rates and thus a similar need to replenish the long-term rental housing stock, while balancing a continued reliance on tourism.
Sun Peaks conducted extensive public consultations and found that the majority of property owners were in favour of short-term rentals being subject to noise and parking management as well as verification of fire insurance. Most Sun Peaks residents were opposed to allowing them in all residential areas. Council’s response was requiring spot rezoning, entailing a building and fire inspection, a small performance bond, a public hearing process, and a 24/7 complaint telephone contact.
Tofino has set out to educate property owners, modify zoning, and most significantly to require a business licence for anyone who rents properties on a short-term basis. The city may also limit the number of licences provided, which vary from $150 annually for a one-bedroom and $375 for a three-bedroom, the largest STR permitted. They stipulate that not more than one secondary suite per lot may be rented short-term, that there be not more than three sleeping units, and not more than six guests per property. One parking space per sleeping unit is required (in contrast, one space per three bed spaces in a ded and breakfast is required). “Short-term rental” has been defined and introduced into the city’s zoning and there are multiple zones (covering “most” neighbourhoods) where it is permitted, but traditional bed and breakfast businesses are not. Short-term rentals are not permitted in single-family only zones, but only in zones where two detached dwelling units are allowed on one lot.
Vancouver is currently undertaking an investigation of short-term rental and a potential shift in regulatory approach. The Vancouver zoning bylaw stipulates “No person shall use or permit to be used any sleeping unit for a period of less than one month unless such unit forms part of a hotel.” Little enforcement has taken place, hence the review of short-term rental impacts.
Victoria announced in 2014 that it was in talks with Airbnb to explore the possibility of imposing a lodging tax.
Whistler requires short-term rental hosts to comply with its zoning and parking bylaw. Most residentially zoned properties do not permit short-term rentals. Fines of up to $1,000 per day may be issued to the property owner. When an illegal rental property is discovered, a letter is sent requesting a 30-day window for compliance, after which a second letter is sent, followed potentially by a fine. Mayor Nancy Wilhelm-Morden confirmed to media that, in 2014, there had been 66 illegal rental properties identified by Bylaw Services, 45 of which were quickly brought into compliance.
Rest of Canada
Nova Scotia announced in March, 2016, that it would launch a study of the impacts of “Uber” and “Airbnb” and potential regulation thereof.
Ontario recently launched a pilot project with Airbnb that will see the online platform informing its 11,000 Ontario hosts to pay taxes. Finance minister Charles Sousa said the “voluntary” goal is to get Airbnb to comply with Ontario’s laws and regulations. Ontario law has long stipulated, however, that a renter may not sublet for a price higher than their own rent.
Québec (the Province of) requires a Ministry of Tourism certificate renewed annually for $250 and the payment of a 3.5% lodging tax. Inspections are required. Fines can be as high as $2,250 per day.
Toronto laid its first charge against a short-term rental host in March of 2016. Under a bylaw from the former municipality of North York, short-term home rentals are required to be seven days or longer.
Austin, Texas, has a relatively complex set of short-term rental regulations based on a hierarchy of three types of short-term rental scenario. An operating licence is required, incurring an application cost of $235 plus a $50 neighbour notification fee. Proof of insurance, inspection, and tax payment is required. The city limits the number of licences it issues per census tract.
Chicago passed, on June 22nd, 2016, the first regulations in the United States to require short-term rental listing companies, like Airbnb, to regularly share data with municipal officials.
New York State prohibits the short-term rental (fewer than 30 days) of an entire dwelling, unless it is a one- or two-family home. Government has the power to issue fines as high as $50,000.
Portland, Oregon has required that a host must reside in the property for at least 75% of the year. An over-the-counter permit of $180 is required, as well as an inspection and neighbour notification. The payment of a lodging tax is required, and this is collected by some web platforms; hosts using other platforms must self-report. Airbnb has called Portland’s legislation “sensible”, but compliance has been low.
San Francisco is perhaps the mostly highly cited and studied instance of short-term rental regulations and politics, particularly after a referendum on the matter solicited multi-million dollar campaigns. It has a ban on listing multiple homes for short-term rent online. Hosts must be full-time residents of the property in question, they must register with the city, and they may not rent for more than 90 days per year. Proof of insurance of over $500,000 and of primary residence is required to register. The city’s rules have been critiqued by commentators as quite complex. The San Francisco Chronicle reports that only a fraction have registered.
Santa Monica, California “banned” short-term rental in 2015 unless the host resides in the unit with their guests during the guests’ stay – in other words, the host must not be out of town. As of February 2016 it has issued 650 violations with fines of up to $500. In 2015 it dedicated $410,000 towards an enforcement unit with three full-time staff. “Staff will look at photos and drive the city’s streets trying to identify people who are breaking the law.” “Home-sharing”, when a portion of a home is rented for fewer than 30 days, is permitted, but taxes are required. Hosts earning less than $40,000 may apply for an exemption.
Seattle’s 2016 policy research project is under way, but the mayor and one councillor have proposed rules that primarily regulate STRs that are not primary residences. See this article.
Sedona, Arizona prohibits the rental of single-family residences for fewer than 30 days. To advertise or facilitate the rental of a residence for fewer than 30 days is also prohibited. Fines may be as high as $2,500 per day.
Amsterdam recently dedicated one million euros towards enforcing its short-term rental regulations via high-tech digital investigation. Media reports indicate that nearly 75% of Airbnb listings in Amsterdam violate that city’s rules. Hosts are required to live in the residence that they rent out short-term, not rent more than one property, not rent for more than 60 days per year, and not rent to more than four people at once. It established an agreement with Airbnb in 2015 that requires Airbnb hosts to acknowledge that they have read the rules before posting a listing, the collection of taxes, and a semi-annual email reminder of Amsterdam’s rules and regulations.
In 2014, Berlin passed a motion to adopt new short-term rental regulations which would take effect two years later in May 2016. Widely reported as an outright “Airbnb ban”, Berlin in fact placed a ban on renting out entire residences (i.e. a whole apartment or home). The legislation is called the “Zweckentfremdungsverbot von Wohnraum”: prohibition of the misappropriation of living space. Only individual rooms may be listed, and no more than 50% of a residence may be rented short-term. For example, the occupant of a two-bedroom unit may only rent out one bedroom on a short-term basis. Neighbours can file violation complaints anonymously and fines can be as high as €100,000. Within a month, Airbnb listings dropped by 40%. Anyone wishing to rent out more than 50% of a home must apply for a permit, but a city representative said that 95% of cases would be rejected because only applications that demonstrate a “public interest”, such as a rental beside a children’s hospital, may be approved. A released Airbnb economic impact study found that 76% of Airbnb hosts simply occasionally share only a home that they live in – they are not running a business.
Dubai requires hosts to obtain a licence, which can be paid for online. The home owner must meet “quality standards” including amenities, health and safety standards, insurance requirements, a code of conduct, and the respect of “wider community integration standards”.
Hamburg has legalized short-term rental of a private room or to occasionally rent out one’s primary residence. No licence is required for short-term rentals in a primary residence, but should one wish to rent out a secondary residence or several properties, a municipal licence is required.
Paris requires that hosts rent out only their primary residence, and this for not more than four months per year. Anything else requires a permit and registration as a commercial property. Fines can be as high as €25,000.
For additional information, you can visit a December 2014 summary of over 45 cities that have taken steps to regulate short-term rentals. Roomscore.org, published by a free-market lobby in the United States, has year-2016 information on 59 American cities’ approaches. CityLab has a brief overview of policies in European cities.