As it has long proposed, the City of Yellowknife could soon begin regulating short-term rentals and charging a fine of $1,000 per day for those that remain unlicensed.
City documents note "rapid growth" in the number of short-term rental properties in Yellowknife (defines as rentals where clients book for 30 consecutive days or fewer).
Under the proposed new rules, to be debated at a noon meeting of mayor and council on Tuesday, rental operators and property owners would require a business licence to rent "part or all of their property" short-term.
Research and consultation about the regulations, governing rentals on Airbnb and other websites, has been ongoing over the past year. The City identifies 206 separate Airbnb listings within the municipality, alongside more on sites like Homeaway, Flip Key, and Craigslist. By comparison, there are 27 licensed bed-and-breakfasts.
The city's hotel industry has been pushing for short-term rentals to be regulated. A resolution adopted by the NWT Tourism board this week – brought forward by the Explorer Hotel – urges the City of Yellowknife to adopt bylaws for the regulation and inspection of short-term rentals. Those bylaws would address "the unlevel playing field for accommodation providers" in Yellowknife, the resolution states.
The regulations City Hall has drafted for councillors are described as a "light approach," intended to strike a balance between allowing residents to be part of the sharing economy while ensuring safe neighbourhoods and a "fair playing field" with other businesses providing accommodation.
Under the proposed regulations, people who have not yet rented their space will be required to get a business licence before advertising it. Those who already operate short-term rentals will have until May 31, 2020 to get a business licence.
As of June 1, 2020, any rentals without a posted business licence could be fined up to $1,000 per day. While fines and legal action are possible, City administrators expect to reach most operators through "voluntary compliance, education, and awareness" without things escalating to that point.
The City is proposing a $200 fee for a short-term rental business licence.
'Outside legal parameters'
The proposed regulations show the City intends to allow short-term rentals in all parts of Yellowknife and in all housing types.
The sticking point for current or future Airbnb hosts, if they themselves are renters, will be to get permission from their landlord. Anyone wanting to rent out a vehicle or an "unlawful dwelling," as defined by the City's zoning bylaw, won't be able to do so under the new rules.
Residents who both live in a suite and then rent out all or part of the unit as an Airbnb offering, or similar, will need to obtain a development permit for a home-based business. This would not be needed if the person doesn't live in the short-term rental they are operating.
The City states short-term rentals will be allowed in a "non-principal residence," in other words places which people own but don't normally live in. Other cities across Canada, suffering from low rental vacancies and high rental rates, have either proposed or gone ahead with banning short-term rentals in secondary or investment homes.
Some cities have also faced issues with entire homes being rented out on Airbnb, becoming "de-facto hotels". Under Yellowknife's proposed definition of short-term accommodation, renting out an entire home would be classed as operating a short-term rental, provided it is a "private residence."
In an October 2018 letter to the City, Yellowknife Hotel Association president Joey Cruz feared the City's definition would allow operators renting out whole units or multiple rooms to function as home-based businesses – when, Cruz said, those operators should be subject to more stringent regulations governing fire protection, employment standards, and safety regulations. The hotel association singled out "numerous" short-term rental providers in Old Town as an area of concern.
"We certainly hope that ... providers located in Old Town are indeed home-based businesses and not inns or hotels operating outside of established legal parameters," Cruz wrote.
A briefing note for councillors says moving ahead with a bylaw change is necessary before the City puts in place a tourist accommodation tax.