HAC: Eight tools to modernize short term rentals

OTTAWA — Alana Baker and Alison Evans of the Hotel Association of Canada, and Xavier Gret of Association hôtellerie Québec went to Parliament Hill on Aug. 16, to release the HAC's best practice guidelines for regulating Airbnb. The paper is titled, “Developing a Modern Approach to Short-Term Rentals in a Digital Economy.” 

HAC has long contended that the short-term rental industry operates with limited regulation and online platforms are being used to operate commercial accommodation businesses, resulting in unintended consequences. Their new research gives Canadian municipalities an analysis of regulatory developments worldwide and best practice approaches to developing a local framework. 

“Governments at all levels are grappling with the
implications of the growing short-term rental
industry,” said Baker. There is an acute need for federal,
provincial, and municipal governments to put in
place a modern regulatory framework to address
the stresses and unintended consequences
created by short-term accommodation rentals. 

THE HAC'S OBJECTIVES

— Minimize the displacement of affordable and
accessible housing

— Minimize community nuisance while protecting
public safety and with adherence to municipal bylaws

— Ensure a level competitive playing field
Collect appropriate taxes and tourism levies

— Enable voluntary compliance while minimizing the
administrative burden for hosts, home-renting
platforms and governments. 

ROADMAP

The HAC provided a five-step roadmap for local governments that included: research regarding the impact on communities and neighbourhoods; a review of existing regulation, consultation with local partners including hosts; application of regulatory tools; and monitoring and assessment of the reported results against expected outcomes.

Alison Evans, Alana Baker and Xavier Gret on the Hill.

Alison Evans, Alana Baker and Xavier Gret on the Hill.

REGULATORY TOOLBOX

Following a scan of the regulatory approaches taken in communities and cities around the world, the
following 8 elements have consistently been applied: 

1. Host Registration and Fees

Requires that any property offered for home-renting be
registered with the local government. For the benefit of hosts
and municipalities, platform companies should facilitate the
registration process. Along with the collection of an annual
fee to recover costs, registration enables the monitoring and
reporting of rental activity.

2. Platform registration and fees

Require registration of the rental platform companies along
with a significant annual fee and an ongoing fee for each
booking. Rental platform companies must be prohibited
from listing any property that is not properly registered.

3. Principal residence restriction

Limits home-renting to a principal residence only. This
prohibits the operation of ghost hotels and/or large scale
commercial enterprises operating under the veil of home
sharing. A significant issue remains in that short-term rentals
are permitted in areas without proper zoning but with some
limitations.

4. Cap on usage

Limits the number of days that a home can be rented
through a home-renting platform. This helps to moderate
the decline in available housing stock and the nuisance
factors associated with the conversion of ordinary residences
into commercial operations. Caps typically run from 30 to
180 days per year. Some condominium boards put the cap
at zero days and some regulations require explicit approval
from homeowner’s associations before short-term rentals can
be offered.

5. Health and Safety Standards

Regulations that require certain standards for safety (e.g.
smoke detectors, fire extinguishers, pest control). This
provides some minimal level of protection for guests.

6. Reporting

A requirement at the platform and host level to report to
government on all home-renting activity. This includes
mandating that platform companies issue annual
information slips to hosts on rental income with a copy
to government authorities.

7. Taxation and Levies

Special provisions at the platform level
to conveniently collect and remit various taxes and/or
levies on behalf of hosts. This creates a more level playing
field with commercial operators and provides revenue to
government to cover the costs of managing home
sharing activity.

8. Enforcement/Penalties

Mechanisms to ensure regulations are applied and
enforced (e.g. confirm principal residence with a driver’s
license). Effective enforcement can only be achieved with
reliable and timely reporting of activity from the
platform. Penalties help to ensure the system is operat-
ing as intended through voluntary compliance.

Read more and download the full report.