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MoneyAirbnb regulations coming as hospitality revenue declines

08:30  11 september  2019
08:30  11 september  2019 Source:   globalnews.ca

Airbnb hosts, short-term rental critics facing off over regulations at appeal hearing

Airbnb hosts, short-term rental critics facing off over regulations at appeal hearing A years-long battle over how to regulate short-term rentals in Toronto is continuing this week at the province's Local Planning Appeal Tribunal, with some arguing the city's proposed rules are a "deflection" from policymakers' attempts to fix an ongoing affordable housing shortage. The regulations, which focus on the short-term rentals available through companies such as Airbnb and Vrbo, were approved by council in 2018. Multiple hosts appealed the rules before they could be put into place.

Airbnb regulations coming as hospitality revenue declines© Derek Putz / Global News Dragon's Nest Bed and Breakfast owner Rick Urbanski says the business has seen a decline as Airbnb surged in popularity.

Dragon’s Nest Bed and Breakfast has been a staple of Regina’s Cathedral neighbourhood since 2004. The three-storey character home is hard to miss with metal dragons on the property’s gates and 600-pound Chinese dragon statue greeting guests.

In the past three years, however, co-owner Rick Urbanski has noticed a drop off in business.

“In 2016, we generated just over $57,000 in revenue. An average decline of about $25,000 from the last five years - on average,” he said.

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Could new Airbnb rules discourage legal secondary suites? Desiree Narciso bought her late-1800s house in 1992. She and her family live on the second and third storeys. The first floor is rented to a long-term tenant for $2,700 a month and the basement operates as an Airbnb that can be used as one apartment or separated into two units that rent for between $90 and $160 a night each. The rental income has helped Narciso recover from devastating flooding and structural problems that have forced her to practically rebuild the place in recent years, she told a provincial tribunal that is hearing an appeal of the city’s approved short-term rental accommodations.

He looked at his business to see what was going on and linked the decline to the growth of Airbnb and similar short-term rental services.

Dragon’s Nest is staying afloat, but Urbanski said he’s relying on returning guests and not seeing many new faces.

“Just over the weekend was the Queen City Marathon. Normally I'm full during an event like that and I had two people that weren't even running in the marathon,” he said.

Airbnb has seen major growth – just last week the company announced Regina saw more growth than any other city worldwide last year.

READ MORE: Regina sees largest increase in Airbnb bookings across the globe for 2019

Now a firmly entrenched business in many urban centres, Airbnb is drawing increased attention from regulators.

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As first reported by the Regina Leader-Post, the Saskatchewan government is talking with the Airbnb and similar companies about introducing PST.

“We're hopeful that we can get compliance. You've probably heard from the hotel and hospitality associations, and they want a level playing field,” finance ministry spokesperson Jeff Welke said.

A level playing field is exactly what Regina Hotel Association president Tracy Fahlman is looking for.

“Our hotel industry to date, this is 2019, is running about 56-57 per cent occupancy,” she said.

“That's down two per cent compared to last year. So has the AirBNB, home-sharing sector taken a chunk out of that? Absolutely it has.”

Welke said talks on adding PST to Airbnb are going well, and charging the tax isn’t new for the company.

Airbnb rentals are subject to PST in B.C at eight per cent. Quebec charges a 3.5 per cent lodging tax. Some Ontario cities, including Ottawa, Barrie and Windsor all include a four per cent municipal tax on bookings.

New rules would put a third of Airbnb listings out of business, and boost housing supply, tribunal told

New rules would put a third of Airbnb listings out of business, and boost housing supply, tribunal told More than a third of the city’s 21,000 Airbnb listings would disappear if the city’s short-term rental bylaws take effect. Those are the units operated by landlords with multiple listings that violate a key provision that would require hosts of short-term rentals to be the principal occupant of the home, according to the testimony of a McGill University researcher, who appeared before a tribunal considering an appeal of council’s approved rules. Planning professor David Wachsmuth, who holds a Canada Research Chair in Urban Governance, has led academic studies of the impact of Airbnb in several cities, including Toronto.

Global News reached out to Airbnb for comment but did not receive a reply.

READ MORE: “It’s been an absolute nightmare”: No vacancy in Regina for Heritage Classic

There is no public timeframe on when Saskatchewan may begin charging PST. Welke said there is no estimate on what kind of revenue this could bring in.

According to Fahlman, the Regina hotel sector will pay about $200,000 to $250,000 less PST to the province this year. She said that could be an indication of revenue lost to untaxed rentals.

That’s not the only area the conventional hospitality industry wants to see the playing field levelled.

Urbanski said he pays about $5,000 annually in licensing, safety, insurance and inspection fees. Dragon’s Nest has looked at posting their rooms on Airbnb, but runs risks of moving their established business to the platform.

“If I stop doing those kind of things, code-wise and everything, I don't know what would happen. I could lose my operational licence, I could be fined. I don't know I haven't tried it,” he said.

The City of Regina does have rules for Airbnb hosts on the books. They are supposed to register and get approval from the city, however only one has. A second is currently going through the process.

With upwards of 300 Airbnb accommodations in Regina, the city is looking at revising rules, and those are expected to be brought to council later this year.

READ MORE: Saskatoon starts looking into Airbnb regulations

The City of Saskatoon has been working on a report to inform local bylaws for a number of years. It was originally expected to be released in June. A city spokesperson said the report has faced some delays, but should be coming out this fall.

Until then, Urbanski is left working by the book. He’s checked out a few Airbnbs, and said some don’t even serve breakfast. He wondered how you can be a bed and breakfast without the breakfast.

Read more

Airbnb a disrupter in small Saskatchewan towns, lake communities .
Airbnb a disrupter in small Saskatchewan towns, lake communitiesA curling competition was taking place in town, and a team had booked two or three double rooms at The Pioneer Hotel & Motel, a family-run business built by Wittke’s father in 1966 and passed down to him. The brick building has the stylings of a classic Saskatchewan hotel from decades past, but provides a nostalgic sense of comfort.

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