Here’s How Halifax Wants To Regulate Airbnb
HALIFAX — Halifax Regional Council has taken the first steps towards regulating short-term rentals listed through websites like Airbnb.
The council endorsed a plan from city staff that will create a registry of short-term rentals in the city and subject many of them to the same rules and taxes as commercial hotels.
The goal is to discourage people from turning residential homes into commercial accommodations, a trend that has helped contribute to rising rents and housing costs in the city.
“This is great,” Coun. Wayne Mason said of the plan. “[Short-term rental regulations] are certainly something my residents have been asking for.”
The city’s plans start with requiring all short-term rentals in the HRM to be registered. City staff say this move is “essential” to creating effective regulations. Staff say, however, it needs to be done cooperatively with the provincial government and, if possible, online short-term rental platforms.
Once they’re registered, most short-term rentals in the city would then be put under the same rules and regulations as hotels.
Right now, the city allows hotels, motels, and other overnight accommodations to operate in several commercial areas of the city. HRM would essentially add short-term rentals to that list.
This means they would, for all intents and purposes, be considered hotels and follow the regulations that come with that.
This, staff says, would ensure there are “no financial incentives to convert residential units to commercial STRs”
The city also hopes to apply a “hotel tax” to short-term rentals.
Right now, HRM makes commercial accommodations with more than 20 rooms charge customers an extra 2 percent “marketing levy fee” on the price of a room. Money collected through the tax is used for tourism marketing initiatives.
The city would get rid of the 20-unit minimum and apply the hotel tax to all commercial accommodations, regardless of their size.
This, staff says, would help ensure a “level playing field” between traditional hotel operators who run short-term rental operations like off-the-books hotels, with multiple units scattered throughout one building, or the city.
But not all short-term rentals would be considered full-fledged hotels under the new rules. In residential areas of the city, residents would be allowed to run short-term rentals (without the hotel-specific regulations) out of their primary residences.
That would mean no using backyard or secondary suites as short-term rentals. You could, however, rent out all or part of your own home (so long as you live there at least six months out of the year).
Taken together, the rules will allow people to leverage their own homes as a secondary source of income but discourage people from buying multiple properties for the sole purpose of turning them into short-term rentals.
Short-term rentals are driving up rent
That’s important because short-term rentals can have significant impacts on a city’s housing market.
In many cases, short-term rentals take homes that people would otherwise live in full-time off the market. This leaves fewer places for people to live, which drives up rent.
“It’s simple logic that that is affecting our housing,” Coun. Lindell Smith said.
This problem is particularly bad when people are buying condos, apartments, and entire houses for the sole purpose of turning them into short-term rentals.
Data from Halifax appears to show that exact thing happening in the city.
Staff found the number of listings in Halifax jumped from about 950 in the summer of 2016 to almost 2,600 in the summer of 2019.
Of those, about 80 percent are people listing entire homes.
Short-term rental operators in Halifax made a combined $31-million in 2019. Fifty-five percent of that went to the top 10 percent of hosts, who are almost certainly renting out multiple units they don’t live in.
“This is causing a lot of problems for the housing shortage, for the housing crisis we find ourselves in,” Coun. Paul Russell said.
He pointed out that someone turning seven apartments into short-term rentals will make more money even if they’re only 20 percent full, “but that still takes seven housing units out of the stock for the HRM.”
And in tight housing markets like the HRM, even a small hit to the number of available homes can have a significant impact on affordability.
Last November, a group of researchers found that a full 740 housing units have been lost in Halifax to short-term rentals. That’s about one percent of the city’s total rental supply.
One percent might not seem like a lot. However, the city’s vacancy rate currently sits at about 1 percent. Restricting short-term rentals and putting those units back on the housing market could potentially double the city’s vacancy rate.
Strong enforcement will be key
Council agreed to the rule changes almost unanimously, but deputy mayor List Blackburn did raise concerns about how the rules would be enforced.
Enforcement of short-term rentals is notoriously difficult, and Blackburn urged staff to follow the example of cities like Charlottetown when crafting an enforcement strategy.
“Make sure that the fines that you levy have teeth because otherwise it’s just not going to work,” she said.