Operators of unlicensed short-term rentals in Vancouver will face a C$1,000-a-day ($795) fine starting in September as part of an agreement with Airbnb Inc. to tighten regulations on home sharing in Canada’s most expensive property market.

The city’s deal with Airbnb will require hosts to display a business license number on ads showing the unit is legally approved for short-term rentals. The San Francisco-based operator accounts for roughly 88 percent of Vancouver’s 6,600 short-term rental listings, according to city officials.

The steps are intended to crack down on an unregulated market that has been blamed for stoking a housing crisis in the Pacific Coast city, where the supply of homes for long-term tenants is near zero even as vacation rentals thrive. The move is the result of a two-year effort by the city, during which it reviewed policies in 14 other North American cities, as well as Berlin, to arrive at rules it believes are enforceable.

Calling the pact “the first of its kind” at a press conference on Wednesday, Mayor Gregor Robertson said, “we’re making sure that our housing functions first and foremost as homes for people who live and work in Vancouver.”

Beginning April 19, Airbnb will include a field on its site for all hosts to list their business license number, obtainable from a new online portal to be launched by the city on the same day. New hosts won’t be able to list a unit without a license number, while existing hosts will have until Aug. 31 to get one.

Pursue Violators

Vancouver plans to aggressively pursue violators. Under the agreement, Airbnb will provide the city with all Vancouver listings and their associated addresses on a quarterly basis to be cross-referenced with licensing records to identify illegal operators, according to a statement. Airbnb will also collect provincial and municipal taxes from its hosts. The city is also appointing a new enforcement officer to analyze data to help identify violations and send inspectors for audits.

Earlier, the city relied on complaints from the public to spot violators and was hamstrung from taking action because it’s nearly impossible to distinguish a short-term rental from a long-term lease from a visual inspection. The new approach lowers the burden of proof — all that’s needed is a listing without a license number to prompt a fine.

Those seeking to skirt the rules by moving to other home-sharing websites may be stymied. The city expects to reach a similar agreement with Expedia Group Inc., which together with Airbnb would comprise 95 percent of short-term listings in the city, said Kaye Krishna, the city’s general manager of development and licensing. Expedia has already begun encouraging hosts using its HomeAway and VRBO sites to apply for business licenses, she said. Meanwhile, the city is also in talks with TripAdvisor Inc.

Business Licences

Vancouver will still only allow short-term rentals of principal residences — either part or all of the homes occupied for at least 180 days of the year. Officials believe such units account for about 80 percent of the 6,600 listings and will be eligible to obtain business licenses for a one-time registration fee of C$56 ($44) and an annual fee of C$49 ($38).

It’s still illegal to rent investment properties, laneway homes, or other secondary units for less than 30-day stays because the city seeks to direct such properties into the long-term rental market.

Those caught renting ineligible properties — including hosts running multiple listings on Airbnb — will begin facing the $1,000-a-day fine immediately, officials say.

This article was written by Natalie Obiko Pearson from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: Vancouver short-term rental owners, like the ones pictured here, could face new penalties starting later this month if they don't comply with new city regulations. Natalie Obiko Pearson, / Bloomberg