In February, 45 short term rental operators in Nelson got a warning letter from the city. Buy a business licence within 60 days, it said, or risk being fined up to $500 for each day you continue to operate without one.
Since February the city has sent out second warnings to some operators and issued tickets to almost 20, most of whom have since applied for licences.
Currently 44 rental properties have been inspected and approved, five are waiting for an inspection, and there are 10 to whom the city has issued another warning letter, according to the city’s Alex Thumm.
Applying for the city’s new short term rental business licence triggers a visit from a bylaw inspection officer who checks on a substantial list of questions about the rental property. For example: does it have interconnected and wired-in (as opposed to battery operated) smoke alarms?
The initial group of 45 operators was identified for the city by the consultant Host Compliance, an American company that describes itself as “the leader in short-term compliance monitoring and enforcement solutions for local governments.” The company uses a variety of data sources and web tools to search out which listings are active, how active they are, and where they are located.
The head of the Nelson Short Term Rental Owners’ Association thinks the number 45 sounds about right.
“That is not far off from what we predicted a year and a half ago,” said Stephen Harris.
Some of the 110 short term rentals the city identified back then were outside the city, he said, and others were people not particularly serious about their operation or were not operating at all.
“They may have been people who said, ‘I’ve got a spare room so maybe I’ll throw my place on this Airbnb thing and if someone rents it, great, and if not, oh well.’
“Overall it is what we expected,” he said, “that this process would shake out some of those folks who were not quite as interested in the business side of operating a vacation rental.”
Harris said for such people the expense of upgrading their premises to conform to the city’s bylaw requirements would not be worth it.
Those requirements include a list of specific rules related to electrical and fire safety, heating, sanitation standards, cooking facilities and parking.
There is a limited number of licences allowed per block, a distinction between year-round and summer licences, a requirement that year-round licencees be the principal resident, a mandatory payment of the annual Kootenay Lake tourism fee of $150, a $500 security deposit, and requirements that operators keep a guest registry and other guest information.
Fees are $200 for an annual licence with one guest room, $350 for two guest rooms, $450 for 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.
The city’s guidelines also strongly suggest that short term rental operators should tell their house insurance company that they are renting out all or part of the insured premises.
The city’s focus on Airbnb and similar short-term rentals over the past two years has stemmed from concerns that the operators in Nelson are competing unfairly with hotels by operating without buying business licences, paying taxes, or complying with zoning. There were also questions. still unanswered, about whether more short-term rentals means fewer long-term rentals in a town with a near-zero rental vacancy rate.
Harris is optimistic about the city’s regulatory initiatives.
“I think it is a good start. You have to congratulate the city that they did not try to follow the model that some other cities are doing unsuccessfully, putting on a blanket ban.”