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City of Richmond staff urge legalizing illegal hotels

City lawyer and chief license inspector contend enforcement of short-term rentals is difficult
Investigation: Inside Richmond's burgeoning illegal hotel and guest house operations _0

The City of Richmond wants to move ahead with new regulations that will allow for the conversion of single-family homes into legal hotels.

A staff report that recommends regulating short-term rental units was tabled at a city council committee Tuesday evening, where councillors were to decide on what to do with what staff claim is a growing number of illegal house-hotels and short-term rental suites sprouting up in the city.

City solicitor Doug Long and chief licence inspector Carli Edwards contend in their report that banning the practice is “very challenging” and regulations may be more practical.

Coun. Harold Steves took to Twitter ahead of Tuesday’s meeting, stating he is “fed up” with the lack of bylaw enforcement by the City of Richmond on illegal house-hotels, which number in the hundreds — and that’s just the ones that are known. Steves said he was concerned about the impact they were having on long-term rental stock.

The report notes nuisance complaints, (traffic, noise, poor guest behaviour) as well as lack of regulations surrounding health, fire and safety, are among some of the concerns.

Furthermore, none of the short-term rentals operate within the parameters of a business licence and fall into a grey area of taxation.

The city contends the concerns about short-term rentals must be weighed against some positive aspects, such as their ability to generate income for a homeowner and provide more affordable accommodation to tourists.

Steves and others on council will need to decide whether or not they will continue to ban house-hotels or try and bring them into the light and under a regulatory regime. The city is asking for public consultation on the matter.

While recommending regulations, Long and Edwards have also tabled an option to prohibit all short-term rentals.

“However, staff anticipate that if this option was selected, non-compliance would be significant and, therefore, enforcement would be difficult,” states the report.

The report does not suggest increasing the number of city inspectors under the existing regimen of prohibition.

In terms of enforcement, the report contends prohibition is challenging given the nature of the operations.

“If the threat of bylaw enforcement is perceived, the operator may simply choose to stop renting and resume again when the threat has lessened. Further, building and prosecuting a case requires the application of significant staff time and resources.”

The city has received about 100 citizen complaints this year related to illegal accommodations. It has not issued any fines.

Staff propose that short-term rental operators require a new business licence. Under the licence, the operator must be a primary resident of the home and comply with fire and building regulations.

A homeowner would not be allowed to host more than six guests, much like the existing bed and breakfast rules. Also, notice of operations are to be provided to neighbours.

For strata units, a business licence would have to be signed off by the strata council. It is recommended that stratas with four or less units be banned from short-term rentals.

It is suggested that online booking websites require a local permit as a condition of use for the booking platform. 

The Richmond Hotel Association has suggested that city staff advocate for the provincial government to lift existing tax-collecting exemptions for short-term rentals (ie. bed and breakfasts) that have fewer than four rooms.

Presently, bed and breakfasts do not charge PST, for instance. Lifting the exemption would theoretically facilitate better enforcement through information sharing between the municipality and provincial government.