Municipal leaders will next month debate what to do about online accommodation booking services like Airbnb, which are blamed for shifting part of the long-term rental supply to more lucrative vacation rentals while dodging the taxes that existing hotel and B&B operators pay.
Four resolutions will be before the Union of B.C. Municipalities convention in Victoria in September to seek provincial government regulation of short-term rentals to “level the playing field” with conventional operators.
People renting out rooms, suites or entire homes through Airbnb avoid paying a variety of taxes – from higher commercial property tax rates to sales and room taxes – that represent up 25 to 30 per cent of a regular room’s costs, according to one resolution from the Sun Peaks mountain resort municipality.
It demands “taxation fairness” and an equitable competitive environment between all providers and notes local tourism promotion may also be harmed because those marketing campaigns are often funded by a two to three per cent room tax.
The City of Vancouver’s resolution warns the “explosive growth” of online accommodation platforms has created an urgent need “to protect affordable housing stock for long-term residents.”
Vancouver urges the province to collect all applicable sales taxes at point of purchase on daily private room rentals. It notes that provincial regulations already require operators with four or more units to collect and remit PST and hotel room taxes but the government hasn’t yet enforced that against online booking operators.
There are nearly 5,000 Airbnb listings within the City of Vancouver – which city councillors say often consist of homes that have been taken out of the long-term rental supply.
The rental vacancy rate is under one per cent in both Metro Vancouver and the Fraser Valley.
The tracking site Inside Airbnb shows nearly 1,700 listings are in Victoria and the Capital Regional District.
But smaller B.C. municipalities as farflung as Tofino and Nelson have also been grappling with how to respond, sometimes facing resistance from locals who want to keep earning extra money from bookings through Airbnb or VRBO.
The provincial government has been consulting with municipalities and other stakeholders about potential regulation of so-called sharing economy services such as Airbnb, and particularly the ride-hailing app Uber.
Community Minister Peter Fassbender has yet to report his findings or issue recommendations, and an official in his ministry said the consultations are ongoing.
Another housing issue before the UBCM is the use of “renovictions” by landlords to evict tenants on the pretense of major renovations in order to charge much higher rent to a new tenant.
A New Westminster resolution would ask the province to give renters the right of first refusal to return to their old unit at a rent no more than what could have been charged had they stayed.
Langley City wants the province to create two separate residential property tax classes for single family homes and multifamily strata units.
The municipality argues single family houses have risen much faster in assessed value than condos and house owners as a result have ended up shouldering a much greater share of local property taxes. Creating a new multifamily class would let cities charge different and presumably higher rates to condo dwellers to narrow that difference.