On Monday, Nelson City Council held a meeting to sort through a multitude of issues presented to them by urban studies graduate student Alex Thumm, hired for the summer to do research and public consultations on Airbnb and other short-term rental operations in the city.
Thumm told council that most of the approximately 120 Airbnb operators in Nelson were agreeable to some sort of regulation, especially with regard to business licences and fees. But some issues remain problematic, namely parking, insurance and density limits.
Thumm’s memo to council (attached below) outlined how the short-term rental industry, although it is a worldwide phenomenon, has some unique features in Nelson. For example:
“Most STRs are listed as available for rent for less than 70 per cent of the time; many are much more occasional. Out of 87 Airbnb listings reviewed in May, 14 had no reviews, indicating they possibly have not yet been rented.
“Most only accept multi-night bookings. Seventy-seven per cent are entire dwelling units. A number are listed on multiple online platforms.
“The average nightly rate for an Airbnb in Nelson is $107, well below the average rate in Tofino, Kimberley, and Sechelt and half of that of Revelstoke and Fernie.
“Self-reported safety data illustrate that fire safety is not a given. Out of 87 listings, 53 self-reported having a fire extinguisher and 69 a smoke detector.”
Thumm and the city’s Director of Development Services Pam Mierau proposed the following ideas to council as a basis for regulations, based on extensive data collected by Thumm in Nelson since May, all of it set out in detail on his short-term rental website at www.str.nelson.ca.
• Short-term rentals would be allowed almost everywhere, however city-wide caps and a density cap are proposed in residential areas. This is intended to maintain the integrity of residential neighbourhoods. Any property owner is free to apply to rezone to commercial, if that is their intention for the property. A density cap would help ease on-street parking competition without requiring new off-street parking to be built at great cost to resident-operators.
• Rooms for rent (such as a conventional B&B) would be distinguished from entire dwelling units.
• There would be a new business licence category of up to $800 for a year-round, entire-dwelling unit rental.
• Monthly and summer-only licences would be available to facilitate occasional homesharing and to enable landlords of student housing to create needed summer tourist accommodation supply.
• Year-round licence-holders would contribute to funding tourism marketing.
• There would be fire safety inspections and a one-time proof-of-insurance requirement.
• Short-term rental of multifamily building units for the first time would be allowed for, provided the property owner/manager or strata council has no objection.
• A principal residency requirement would be instituted, supported by public consultations; applicants must demonstrate the property is their principal residence. A new zone is proposed to allow for the possibility of a non-resident property owner to rezone a secondary residence for short-term rental purposes. Nelson already requires potential B&Bs outside of commercial areas to rezone if they wish to have more than two guest rooms.
• Initial priority would be given to existing short-term rentals and B&Bs, but licensing requirements will still be obligatory.
• A process to revoke a licence in the case of a problematic short-term rental would be instituted.
• There would be an online, publicly-accessible directory of all licensed short-term rentals and their 24/7 contact.
Licence fees and enforcement
Three licence types were proposed: two rooms and under ($350 per year), three rooms and under ($450), and guest house or suite ($800). There would be lower fees for summer-only rentals. In addition to those fees there would be a one-time building inspection cost of $100 and an annual tourism fee of $150.
The tourism fee would answer the criticism of hotel owners who pay a tax that goes directly to Nelson Kootenay Lake Tourism for tourism marketing and who have requested that short term rental operators also pay, creating a level playing field.
At Monday’s meeting, Councillor Anna Purcell proposed that there be an additional category for one-room rentals for $250. It was pointed out by others that at the average Airbnb price of $107 per night in Nelson, it would take only a few nights’ rental to pay the $350 fee.
Thumm said the proposed fees are higher than in many communities because they have the cost of enforcement built in. He said many municipalities bring in short-term rental regulations but can’t afford to enforce them, resulting in very low compliance rates.
Also to contribute to enforcement costs, business licence fees for hotels and other accommodations would be raised by $100 to $200, and the fees for all other business licence types (with the exception of buskers) by about $30.
Council discussed whether to require proof of insurance because of the likelihood that short-term rental operators’ home insurance may be invalidated by the presence of renters. They were concerned about the possibility that if the city inspects an operation and condones it as safe, and then an accident happens, the city may be liable.
Council talked about whether to require a short-term rental operator to provide off-street parking. There are a number of variables including need to provide enough parking for guests, the operator, and the neighbours; the fact that at some residences it would be impossible to provide off-street parking; the variation across the city in the amount of on-street parking available; and the lack of similar requirements for secondary suites or for long-term rentals.
Thumm’s materials also propose a density limit of no more than three short-term rentals per block in residentially zoned neighbourhoods, and a total of no more than 110 across the city. (He defines a block as both sides of the street directly facing each other including alleys).
The material presented to council by staff for this meeting is attached below.