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Why not everyone is so cozy with Airbnb rentals

A lakeside Airbnb retreat in the Okanagan.
Image Credit: Airbnb
April 10, 2016 - 11:30 AM

THOMPSON-OKANAGAN - With its lakes, wineries and attractions, of course homeowners in the B.C. Southern Interior will take advantage of vacation rental services like Airbnb.

A quick search on Airbnb — a home-sharing service for property owners to rent out anything from a one bedroom unit to an entire home — brings up some 100 listings in the Vernon area, 250 in Kelowna and roughly 250 around the South Okanagan, including Penticton, Naramata and Osoyoos. Kamloops has roughly 60.

Rentals range in price from as low as $50 for a ‘cozy bedroom’ to $1,500 a night for a condo in Kelowna. For a sampling of some of the more intriguing rentals in the Okanagan, check out our story from yesterday. 

But these home vacation rentals are not all sunshine and rainbows for municipalities, renters or the tourism industry.

Airbnb rentals are kind of like jaywalking; technically illegal, but everyone’s doing it and no one’s really enforcing the rules. In Vernon, for example, Airbnb owners need to be licensed as bed and breakfasts to be authorized but the city has only four licenced.

Craig Broderick, an economic development planner at the City of Vernon, says the rules are typically enforced on a complaint basis and so far, hardly anyone has made a fuss.

“I don’t think it’s been a real big issue in the city yet, but may be in the future,” Broderick says. “The closer you are to an amenity, on the lake, a great view or close to Silver Star, the more likely people will say ‘okay, let’s do this, there’s demand for it.’”

But while Airbnb certainly helps with paying off the mortgage, and offering tourists a unique experience, effectively turning your home into a hotel can have its impacts on the wider community.

“If it’s a suite rented out constantly all summer, and they come in with five to ten people, by nature people are on holiday, they’re up late — not being crazy, but doing normal holiday things that might be irritating, or something a neighbour may not like,” Broderick says.

Vernon city planner Craig Broderick
Vernon city planner Craig Broderick

The requirements for bed and breakfast licencing would likely serve the entire industry, not to mention neighbours and neighbourhoods. It would require safety standards and enforce owner occupancy so someone will be around to keep a lid on rambunctious vacationers.

But the draw with many Airbnb rentals, is you’re left alone to live like a local and the only time you see the owner is when you get the keys.

Broderick points out that licensing helps owners ensure their rentals are safe and up to code, and also opens the door to promotion at local visitor centres. But even if an Airbnb owner decided to get licensed as a bed and breakfast, they might not fit cozily inside the criteria, which calls for breakfast to be served and for owners to be on site.

“I think the bed and breakfast model is a bit dated,” Broderick says. “People don’t always want to have that interaction with the owner — they want to walk into their unit, unpack and go to the beach or go biking.”

Like Vernon, the City of Kelowna enforces rules for short-term rentals (anything less than 30 days) on a complaint basis but hasn’t received many calls. Staff say it hasn’t been a big issue, but they are looking into best practices in other jurisdictions to bring before council later this year.

The City of Penticton has taken a slightly stronger approach by implementing a licensing structure specifically for short-term vacation rentals, which entails a $175 annual licensing fee plus a $200 tourism fee. The city also has a fine of up to $500 for anyone operating a short-term vacation rental without a license.

“The benefit is that with those fees, the city does a safety check to ensure those people are renting safe spaces,” communications officer Tina Lee says.

The city has authorized roughly 60 vacation rental licenses this year, Lee says. That’s compared to some 250 Airbnb rentals in the Penticton area.

“We do know we need to be more proactive in enforcing those rules. We have them in place. At this point it’s a complaint-based system as well,” Lee says.

On its ‘responsible housing’ page, Airbnb says hosts should be mindful of local municipal regulations, taxes and business license requirements. It’s perhaps because of local regulations, and the general lack of compliance, that none of the hosts we contacted readily agreed to interviews. One told us ‘low key was the operative word.’


Will short-term vacation rentals add to the issue of affordable housing in the Okanagan?
Will short-term vacation rentals add to the issue of affordable housing in the Okanagan?

The consequences of leaving services like Airbnb unchecked have been widely outlined in the City of Vancouver. One of the main issues is the loss of long-term rental units when landlords choose short-term visitors over long-term leases.

This week, a Vancouver city councillor called for more research on the impact of home-sharing services like Airbnb and said he’d like to see the rules toughened up. Also this week, the Fernie Chamber of Commerce issued a press release stating an explosion of un-regulated Airbnb and other vacation rentals is having negative impacts on the community, including loss of rental housing and the dissolution of tourism tax dollars.

The Okanagan already suffers from a lack of affordable housing but so far no alarm bells are ringing. Municipalities are, for the most part, simply monitoring the potential impacts for now. No hard data is available to measure the effect of short-term vacation rentals on the overall rental market.

According to a rental market report, there are just over 1,500 rental units in Vernon with a vacancy rate of 3.4 per cent and housing outreach workers have repeatedly bemoaned the lack of affordable housing.

But with many luxury Airbnb rentals charging hundreds of dollars a night, Vernon city councillor Juliette Cunningham isn’t convinced they’re doing that much damage to affordable housing.

“I would expect a lot of that housing is not affordable anyways. A lot of times, they tend to be view properties, places on the lake. I believe those places could garner pretty high rents regardless so they’ll always be people that can pay those higher rents,” she says, adding Vernon council is tackling the affordable housing issue with grants for residential developers.

In Kelowna, where there’s an estimated 13,000 rental units and a vacancy rate of about 1.5 per cent.  City planning manager Ryan Smith says 250 Airbnb units ‘is not really a game changer although it doesn’t help.’


A car pulls in to the Vernon Atrium Hotel in Vernon.
A car pulls in to the Vernon Atrium Hotel in Vernon.

Airbnb rentals might operate like hotels, but it don’t always behave like them.

Claus Larsen, the general manager at the Vernon Atrium Hotel and chair of the tourism advisory council for the City of Vernon, says short-term vacation rentals ‘conveniently circumvent’ taxes that hotels have to pay.

“Why should they get a free ride?” Larsen says.

If Airbnb rentals were licensed, they would have to pay an annual business license fee and those with four or more sleeping units would have to pay the city’s hotel tax which pays for tourism marketing.

Larsen believes there’s a big benefit to providing travellers with variety.

“There’s certainly a need for this type of accommodation. The valley is so populated in the summer,” Larsen says, adding big families may prefer to rent out an entire house rather than several hotel rooms.

“I don’t think the way is to ban it, but to regulate it,” he says.

And that, he says, is something municipalities should consider sooner than later.

“It’s only going to get bigger. Theres a need to nip it in the bud rather than let it grow into a big problem,” Larsen says.


Walt Judas, CEO of the Tourism Industry Association of B.C., says services like Airbnb are talked about every day in his line of work.

“People have been renting out cabins and rooms for a long, long time but not to this magnitude,” Judas says. “The extent to which this is happening now, it’s pretty pronounced. The magnitude of it is certainly ramping up.”

The issues of depleted rental stock — particularly for workers in resort towns — and the loss of tourism tax dollars hasn’t gone unnoticed by the association or its members. At the same time, the association acknowledges home-sharing is here to stay, and if regulated, can bring benefits to communities.

“For a certain segment of the market it really appeals to consumers. Those under 35 particularly would be more apt to use Airbnb,” he says.

Regulation appears to be the key to maximizing the benefits and minimizing negative impacts on communities, but while most local governments have bylaws and regulations restricting room rental operations, there is typically little enforcement, Judas says.

The tourism association has made several policy recommendations for local governments grappling with this new phenomenon, including prosecuting offenders, urging compliance with local regulations, implementing regulations where no rules currently exist, having all operators register with the municipality and pay appropriate taxes.

The association also suggests municipalities consider restricting nightly private rentals and encouraging landlords to enter into long term leases, potentially through property tax breaks or other incentives.

“(Vacation rentals) may not be an issue today in parts of the province, but we’ve seen how quickly the sharing economy catches on and it will be only be a matter of time before communities that aren’t worried about it today will be worried about it,” Judas says.


10 local Airbnb rentals that will make you dream of a staycation

To contact a reporter for this story, email Charlotte Helston or call 250-309-5230 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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