City to regulate, tax short-term rentals

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This article was published 23/02/2023 (987 days ago), so information in it may no longer be current.

Hotly debated new rules are on the way for short-term rentals in Winnipeg, such as those listed on Airbnb.

After extensive debate and last-minute changes, council approved a new plan Thursday to regulate the industry. Such businesses will pay a five per cent accommodation tax and be subject to new limits on the number of properties they can own.

After raising some successful changes to the plan, Mayor Scott Gillingham said it should address complaints that some short-term rentals repeatedly disturb their neighbours, without punishing responsible operators.

“(This aims) to seek a middle ground and to seek some balance… In the absence of regulations, many Winnipeggers made significant investments in short-term rentals. I don’t want to see the new regulations unfairly wipe out the investments that they’ve made… At the same time, we also want to eliminate ghost hotel operators,” said Gillingham.

City staff proposed allowing individuals to operate just one rental at their primary residence and one other at a secondary property (where they don’t live).

The latter rental would only be allowed downtown or within a multi-family or commercial zone. A partnership or corporation could get one licence to operate a secondary residential property, again restricted to downtown, multi-family or commercial areas.

A previous executive policy committee vote amended that plan to ensure downtown rentals faced the same limits as those in other areas.

The majority of council also voted Thursday to allow each individual or business to continue to rent out up to three existing non-primary residential properties through a grandfather clause, once the rules take effect. To be eligible, the properties had to be owned by Winnipeg residents or corporations, as of Thursday’s date.

An amendment added to the final vote will allow those units to be located in residential areas, as well as downtown and commercial zones.

That change was deemed a good “first step” by short-term rental owners, some of whom own units in residential areas that would have been prohibited under the original plan.

“Things were up in the air for my husband and I as to what we were going to do with (our rental) if this didn’t go through. Now we’re going to do some upgrades… I’m very pleased, personally, with (the decision) today,” said Michelle Finley, a member of the Manitoba Association of Short-Term Rental Owners, who operates one rental unit in a residential area.

However, a resident who said he has endured sleepless nights, witnessed violence and repeatedly coped with excessive noise due to multiple short-term rental units in his downtown condo building, said he fears the plan will let that continue.

“By allowing these businesses to be grandfathered (in multi-family buildings), it’s not going to stop the violent incidents and parties … that we get exposed to, that (short-term rentals) invite into the building by not having employees monitor their sites, not being available 24/7,” said Craig Penner.

Penner said the units don’t belong in condo buildings.

“I don’t think they should be allowed … with short-term rentals, the whole business is based on short turnaround of their customer base… They’re not really affected (if the) neighbour can’t get any sleep,” he said.

Thursday’s vote also commits council to ask the provincial government to review its condominium law to add a conflict-resolution mechanism for grievances linked to short-term rentals.

Finley said efforts to address short-term rental operators who disturb their neighbours is welcome.

“While most of us play by the rules, there are a few bad apples out there that (don’t) and we really need some regulations and guidelines in place. We’ve heard from residents in those buildings and they are suffering,” she said.

Not all councillors agree the industry should be as limited as the proposal requires. Coun. Matt Allard made a failed attempt to have council reassess the number of units allowed.

Allard said the strict cap on rental units, especially new ones, will limit the tax revenue council can raise from the industry.

“I don’t see why we would arbitrarily cut out a whole potential segment of the market. We have lost revenues for the City of Winnipeg. We have lost opportunities for people who want to visit the city,” said Allard.

City staff will propose bylaws to implement the new rules within about six months, which will take effect following that process.

Council also cast a few other key final votes on Thursday. One decision will preserve the Leacock House (442 Scotia St.), which was built in 1878. Marymound Inc., a social services organization that owns the building, asked to remove it from the city’s list of historical resources so it could be demolished to make room for a transition home for youth.

Council rejected that request, however, with some arguing the transition home could be placed elsewhere.

Council also voted to ask the Manitoba government to change its employment standards code to let employees substitute existing statutory holidays for days that are most meaningful to them.

A call to move part of Smith Street to create new park space next to Burton Cummings Theatre was also approved.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga