$1,000 daily fine proposed for unlicensed Yellowknife Airbnbs

The City of Yellowknife has revealed its initial proposals for new regulations governing local Airbnb operators.

At the moment, none of the City’s bylaws cover the operation of so-called short-term rentals – residents opening up rooms, or entire homes, to travellers using online services like Airbnb and its rivals.

More than 140 properties in Yellowknife are currently listed on Airbnb. Owners of those properties don’t presently have to meet municipal conditions like those imposed on licensed bed-and-breakfast operators.

Since last year, City Hall has been studying how other Canadian cities deal with short-term rentals, talking to Yellowknifers, and working to draw up regulations of its own.

On Monday, Kerry Penney – the City’s director of economic development – presented a series of suggested regulations that could take effect from January 2019.

Penney told councillors most people consulted about short-term rentals, including Airbnb operators themselves, felt a licensing system was the way forward.

Under the system, operators would have to acquire a business licence before advertising their property on Airbnb or a similar service. The business licence number would have to be included in any online listing.

Anyone found listing a property on a website like Airbnb without also listing their business licence number would face a fine of up to $1,000 per day “and potentially other enforcement or legal action,” reads a City briefing document.

The document also states: “All residences must meet the requirements of applicable legislation prior to a business licence being issued.”

Reflecting reality

Some councillors expressed concern that if new regulations demand significantly higher standards of Airbnb operators, they may simply close – depriving residents of revenue and Yellowknife of tourist capacity.

“I can envisage this becoming incredibly restrictive,” said Councillor Julian Morse. “These are things we do impose on current BnBs, they have to comply with all these regulations, so what’s going to happen with Airbnb?

“Quite a large proportion of the people running Airbnbs informally would not meet that kind of criteria. Are we just pushing all of them out of that market or are we going to bring our standards down to reflect reality?

“I would like to see a ‘hands-off’ approach as much as possible by administration in rolling this out.”

Councillors Niels Konge questioned how City administrators envisaged the business licensing system being enforced, beyond the threat of significant fines.

“Is our senior administrative officer going to direct municipal enforcement that, three times a month, they have to go surfing for Airbnbs … then drive around issuing tickets?” Asked Konge.

Penney said staff needed to know whether councillors even wanted Airbnbs to be regulated before deciding “those minor details” around enforcement, but Konge responded: “In order for me to make the decision, I need administration to tell me how the whole thing’s going to roll out.

“I don’t want to have another bike helmet issue where we make this bylaw and absolutely nobody enforces it in any way, shape, or form. I want to see the City’s whole plan.

“I believe the Airbnbs are really bed-and-breakfasts. For five years we’ve absolutely done nothing about regulating or enforcing it, anything. This is good information but not enough, from my perspective.”

‘Level playing field’

Approaches to Airbnb and the like vary across Canada.

In Iqaluit, for example, simply requires the acquisition of a business licence according to the City’s research, while Whitehorse does not regulate Airbnb operators at all.

In Vancouver, a more restrictive system exists – including fines for unlicensed operators similar to those proposed in Yellowknife. In Toronto, legislation to legalize short-term rentals is pending; currently, they are technically not permitted.

In Yellowknife, Konge said issues like property tax groups required more investigation before council decides on a way forward.

“If the property is being used for an Airbnb, even if it’s only one night every month, I think it still changes the tax group that property belongs in and is perhaps something council should be looking at,” he said.

“If I owned a home and wanted to Airbnb a few times a week and all of a sudden my property taxes would double, I might want to have a good, hard look at whether I wanted to Airbnb.”

The City’s research so far suggests residents believe short-term rentals are exciting for their potential to grow tourism and connect visitors with locals, but could also threaten the number of long-term rental properties available in Yellowknife if operating a service like Airbnb proves more lucrative.

“We really need to maximize the benefits of short-term rentals, create a level playing field for everybody, and manage the impact on neighbourhoods, current hotels, and BnBs,” said Sheila Bassi-Kellett, the City’s senior administrative officer.

Councillors will now be asked to endorse the proposals – or send them back for more work – at a future meeting, after which City staff will embark on more consultations before drawing up final plans ahead of a proposed January 2019 start date for licensing.