City’s plan to licence short-term rentals raises concerns from owners group, fed-up opponent

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This article was published 11/10/2023 (729 days ago), so information in it may no longer be current.

Some fear a new licensing regime proposed to govern short-term rental units in Winnipeg threatens to price folks out of the business, while others worry it won’t go far enough to crack down on problem properties.

The head of a local industry association said the annual licence fees are “astronomically high.”

“(The fees) are shockingly high. I just about collapsed when I read that,” said Melanie Mitchell, president of the Manitoba Association of Short Term Rental Owners.

If council approves, the business licences would cost between $260 and $1,560 per property, depending on the size and whether the owner lives on site. The least expensive option would cost $260 per residence where an operator lives.

For dwellings rented out by owners who live elsewhere, the fee would range from $260 per one-bedroom property up to $1,560 per six-bedroom property.

Rental platforms, such as Airbnb and VRBO, would pay between $1,000 and $5,000 per year, with the maximum fee applied to those with more than 500 listings.

Mitchell operates one four-bedroom and two three-bedroom rentals, none of which she lives in, which she said would cost her a total of $2,600 in licence fees each year.

By contrast, the City of Regina charges a $100 fee per principal residence (where the operator lives) and $300 per secondary property.

Mitchell said many other Canadian cities offer far cheaper rates than those proposed here.

“I may still be able to operate but it’s going to cut into my bottom line harshly. I know there’s probably a lot of operators who won’t be able to operate under this regime… It’s kind of like shutting them down without actually shutting them down,” she said.

For years, short-term rental businesses have sparked heated debate at city hall. Proponents claim they are valuable economic drivers that attract tourists, while some neighbours have demanded a crackdown on rentals they say attract rowdy parties, crime and noise violations.

A city staff report notes the licensing regime is meant to “set minimum standards for community safety, consumer safety, neighbourhood accountability, and to foster equity in the accommodations industry.” It estimates there are now about 900 short-term rental operators in Winnipeg.

Penalties for breaking the new rules would befines of $500 or $1,000, including a $1,000 violation for failing to license a rental unit. The city could also suspend or revoke a licence for more serious violations, such as health and safety concerns.

Craig Penner, a downtown condo owner who has reported many rowdy parties in neighbouring short-term rental units, said he remains concerned enforcement will fall short.

“For these things to be effective, they have to be enforceable. There’s too many gaps in the enforcement plan,” said Penner.

For example, he said noise complaints and provincial gathering complaints (during the pandemic) didn’t typically spark prompt action, so relying on existing laws to keep the peace may not be enough.

He would prefer the city restrict short-term rental operations solely to residences where owners live.

“There should be operators present if they’re going to be running a rental business…. (Otherwise) it becomes everybody’s problem to address except the people actually… profiting off the business,” he said.

City staff recommend hiring six new staff positions, including three enforcement inspectors, and buying three new vehicles, to ensure rules are followed. Businesses would be required to submit to inspections annually and upon request.

Coun. Markus Chambers, who raised a call for the city to regulate the industry, said he believes the plan offers a comprehensive response to a divisive issue.

“From what I see, (the fees are) quite reasonable,” said Chambers (St. Norbert-Seine River), noting he has asked for more information on how other cities compare.

He expects hiring new inspectors will also help curb neighbours’ concerns.

Short-term rental operators would also pay a five per cent tax on room rentals.

The city expects to earn about $566,000 per year through the licence fees and $900,000 per year from the tax revenue. The report indicates licence revenue will cover costs to regulate the industry, while tax dollars will help cover salaries and software.

If council approves the plan this month, it could take effect in March.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga