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Nelson’s rental housing market take hit from AirB&B

Timothy Schafer
By Timothy Schafer
April 28th, 2016

The city’s already narrow housing rental market is being further constricted as illegal AirB&B accommodation providers are rapidly cropping up in Nelson, city council was told recently.

Kevin Megale spoke to city council last week about the disparity occurring between what is available for rent in the city, and how many Internet-booked, home-based providers of short-term accommodation have appeared in the city.

The single father of two boys — that rents in the city — said the community is experiencing a housing crisis, and in the last five years it has grown worse, due in part to the growing effect of AirB&B.

“As a renter, I have personal experience with the difficulty finding long-term rental accommodation,” he said. “And I know four families among my personal friends who have been struggling to find a place to rent for the past year.”

However, over the same time period, Internet-booked, home-based providers of short-term accommodation, such as AirB&B and vacation rental by owner (VRBO), have increased in Nelson.  

Megale said there were seven, two-bedroom places for long-term rent on a local classified ad website — ilovenelson.com — and there were 175 two-bed vacation rentals listed at AirB&B for Nelson.

“Many of these listings are entire houses, secondary suites and apartments,” he explained.

With more than 150 beds for rent at AirB&B that means that AirB&B is the newest player and the largest provider of short term accommodation in town, Megale said.

“Unregulated, the sharing economy has unfair advantages over licensed business: less overhead, less red tape, lower safety standards, less insurance,” he said. “We are witnessing the development of an uneven playing field for legitimate hotels and B&Bs.”

As a direct result, families and low wage earners are moving away from town because they can’t afford to live here, Megale explained.

“Long term community members who contribute actively are being displaced by low-budget tourists,” he said. “And they are being replaced by little cohorts of temporary workers accommodated in staff housing situations.”

And AirB&B is contrary to the Official Community Plan and zoning bylaws, Megale noted.

“The OCP includes definitions for ‘bed and breakfast” and “tourist accommodation,” and I’m certain that AirB&B must fit into one of these categories,” he said. “That means it is a prohibited use in most neighbourhoods.”

With more than 150 AirB&B’s operating in the city, and the city’s bylaw complaint-driven process proving onerous and daunting for most people, Megale called for a city “persistent investigator” to identify every single one of the AirB&B operators in Nelson.

“That’s the city’s job, but it doesn’t have to cost the city money,” he said. “New revenues from business licenses would be enough to cover the cost of hiring someone to prepare and implement a compliance plan this summer.”

The idea struck a chord on council, but the matter could only be dealt with at a future council regular business meeting, not in the committee-of-the-whole venue Megale appeared in,

“Municipalities from Vancouver to right across B.C. are struggling with this issue and how to deal with it, and how to enforce it,” said Coun. Robin Cherbo. “So there is still work to be done, and we are working on it.”

But no new laws or regulations are required in Nelson, Megale added, since the city just needs to enforce the bylaws that are already in place.

By implementing a gentle and conciliatory compliance program this summer, Nelson could raise $24,000 selling business licenses to the 150 or so AirB&B operators in the city in 2016, and would be in line to receive at least another $20,000 or so if operators started to collect the two per cent MRDT and the eight per cent PST.

Although most operators are likely declaring their AirB&B income for income tax purposes, if they are not registered as either a B&B or a tourist accommodation, how many of them know that they are also required to collect and remit the GST, PST and MRDT (hotel tax), Megale asked.

“I understand that guests pay AirB&B directly online, and AirB&B pays directly to the host’s bank account,” he said. “I believe that both the city and the province might be failing to collect significant revenue from AirB&B operators here in Nelson. This comes at the same time as we face cuts in core services.”

Coun. Michael Dailly invited Megale to the upcoming Nelson Affordable Housing Committee meetings, and wanted to hear more about the situation and how the city could move forward with some action.

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