Nelson has hired Host Compliance, a Silicon Valley company, to help it monitor and enforce new rules for short-term rental operators.
“They are able to determine [not only] where there are short-term rentals that are actively renting but which we do not have a record of, and all of those will receive a letter from the city,” said Nelson’s head planner Megan Squires.
The letter informs operators that there are now regulations for operating short-term rentals in the city, explains the need to buy a licence, and explains how to do it.
“It gives them fair warning,” Squires said.
On its website, Host Compliance describes itself as “the leader in short-term compliance monitoring and enforcement solutions for local governments.”
“Our algorithms manage all listings for you,” the website states.
The company monitors not only Airbnb but also a number of other short-term rental sites and provides its clients, in this case the City of Nelson, with a monthly analysis of short-term rental activity, which listings are active, and how active they are.
This kind of compliance monitoring is a very new and specialized niche, and an internet search by the Star was unable to find any such companies operating in Canada.
The city will pay the company $9,175.00 for address identification and compliance monitoring for 2017. That’s a lot less than the cost of hiring a bylaw officer.
An additional half-time bylaw officer is, however, included in this year’s proposed budget, although it is not targeted specifically at short-term rentals.
So far, the city has received 27 business licence applications from operators of short-term rental accommodations such as Airbnb.
That’s a fairly small percentage of the number of people the city thinks are operating within the city limits, according to Squires.
Airbnb’s site currently lists 154 sites in Nelson but many of those are outside the city limits. Squires estimates there are about 110 within the city, plus some listed with other agencies like Flipkey and Vacation Rentals By Owner.
Stephen Harris, who heads the Nelson Short Term Renters Association, is not surprised at the small number of applicants.
“There was a over-reaction from the city. They saw there were 110 listed in town and the reality is there are a lot of those are very sporadic – someone who has got a spare room, or kids have left for university and they have a big house. They say, ‘Well maybe we will list it and if we rent it occasionally, great. If not, no problem.’”
Harris thinks many operators, when they look at the regulations and the licence fee, will decide not to bother renting any more.
Harris said the licence fee of $800 for a guest home or guest suite is the city’s third highest, behind the fees for chartered banks and pot dispensaries.
He said in his case, when he rents a whole floor of his house year round, the fees and regulations will be worth it, but for other more sporadic rentals it might not.
Harris’s association was formed last year so that short term renters could have some input in the new rules the city was contemplating.
The short-term rental regulations
The city’s licensing rules, which came into effect January 1, include:
• An operator may only hold one licence per dwelling unit, plus one additional licence that is less than six months (either a summer licence or a 31-day licence). There is a maximum of 110 annual licences and 40 summer licences at any one time. Existing business licence holders have until Dec. 15 to reapply for the following year, otherwise they will be subject to the quotas. There are no quotas for the 31-day licences, but you can only have one per property per year.
• Application requirements include proof of property ownership, proof that the applicant is the principal resident (not required for summer licences), and one or two local contact people.
• Annual licence holders must pay the annual tourism fee to Nelson Kootenay Lake Tourism that is currently paid by hotels (this is not required for summer or 31-day licences).
• New licensees must pay a $500 security deposit except grandfathered licences (grandfathered licences include any person or business that held a business licence valid prior to Jan. 1, 2016 and held a valid licence in 2016).
• Properties will be inspected every three years.
• Licences are not transferable in the event of the sale of the property, except for grandfathered licences.
• Licensees must maintain a guest registry with names, contact information and licence plate numbers, to be inspected by the city at any time.
• On all booking platforms, applicants must list their business licence number, the number of off-street parking spaces available to guests explicitly specifying that this number equals the maximum number of vehicles that paying guests of the property are permitted to bring, and maximum guest occupancy.
• The city will not grant more than three short-term licences (longer than 31 days) per block, which is understood to be the two sides of a single street that face one another.
• Fees are proposed to be $200 for an annual licence with one guest room, $350 for annual licence for two guest rooms, $450 for an annual licence three or more guest rooms, $800 for an annual licence for a guest home or guest suite, with a separate fee schedule for summer licences, and with reduced fees for people with an existing Bed and Breakfast licence. To all of those fees are added the $150 tourism fee (for annual licences only) and a possible building inspection fee of $30.
• Vehicle parking for short-term rental tenants or their guests will be restricted to the property and, where on-street parking is permitted, the portion of the road immediately adjacent to the property.