Nelson city council agrees on short-term rental rules

Council will create a new short term rental business licence

Nelson council will create a new short term rental business licence

Nelson city council took further steps Monday night to regulate short-term rentals, including Airbnb, by amending its business licence, zoning, and off-street parking bylaws. This followed two months of investigation into the issue by summer student Alex Thumm.

Mayor Deb Kozak said the issue of regulating short-term rentals proved to be more complicated than she thought.

“We thought it would be straightforward people wanted to share their homes and thought we needed a few rules around that. But Alex Thumm has uncovered a hugely complex issue that affects the community in many ways.”

Thumm’s discussions have shown short-term rentals to be an issue of parking, business licencing, neighbourhood quality, and the long-term rental housing market.

At Monday’s meeting, council agreed to create a Short-Term Rental Business Licence that will also apply to existing bed and breakfast operators, who will be brought under the umbrella of short-term rentals.

The proposed licence requirements, approved by council on Monday, will now be vetted by the city’s lawyers and then brought back to council for adoption later in the year.

Starting in 2017, short-term rental operators must have a business licence that would include the following conditions:

An operator may only hold one licence per dwelling unit, except for an additional 30-day licence in the summer that must be applied for by December.

Application requirements include proof of property ownership, proof that the applicant is the principal resident, and two local contact people.

Licence holders must pay the annual tourism fee to Nelson Kootenay Lake Tourism that is currently paid by hotels.

New licencees must pay a $500 security deposit except those already in possession of a 2016 Bed and Breakfast Licence.

Properties will be inspected every three years.

Licences are not transferable in the event of the sale of the property.

Licencess must maintain a guest registry with names, contact information and licence plate numbers, to be inspected by the city at any time.

The city will not grant more than 110 short-term rental licences, and 40 additional summer licences, across the city at any one time.

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.

Holders of existing bed and breakfast licences will be grandfathered into a number of these provisions.

Fees are proposed to be $200 for a licence with one guest room, $350 for two guest rooms, $450 for three or more guest rooms, $800 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 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.

A previously reported suggestion that proof of insurance be required for a licence has been dropped based on legal advice that the city would not face a liability risk, but the city will encourage applicants to get appropriate insurance.

Council passed a motion to have those and other provisions included in amended zoning and business licence bylaws. Thumm’s full presentation to council and the draft bylaws are attached below.

Councillors Michael Dailly and Janice Morrison recused themselves from the meeting because of a potential conflict of interest: they or their families are short-term rental operators.

Thumm says  the provisions of the new bylaws are based on best practices elsewhere. His research and the responses to his Nelson surveys and public meetings can be found here.

In addition, council passed motions that city staff are directed to:

Investigate ways to incentivize long-term rental housing by waiving fees to providers and builders of long-term rental housing and secondary suites, and by adjusting parking rules for secondary suites.

Review staffing for bylaw enforcement and business licencing and consider increasing staffing levels in time for the preparation of the 2017 budget.

Review business licence fees across the board in time for the preparation of the 2017 budget because fees have not been increased since 2005 and the Bank of Canada reports that inflation over the past 11 years is 20.77 per cent.

Review parking requirements for all secondary suites and detached accessory dwelling units and report back to Council by March 31, 2017, to assist illegal suites to gain legal status.

Look into providing free transit service to guests of municipally-licenced accommodators to “create an incentive for compliance, make compliant accommodators more attractive to guests, promote transit use, and take pressure off of downtown parking demand.”

Short Term Rentals August 2016

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