THE CORPORATION OF THE CITY OF NELSON

REQUEST FOR COUNCIL DECISION

DATE:
July 18, 2016 Special
TOPIC:
Short-Term Rentals
PROPOSAL:
To provide direction on desirability of specific policies
PROPOSED BY: Staff
______________________________________________________________________
ANALYSIS SUMMARY:
The purpose of this report is to hold a discussion between Council and Staff on regulation
of the short-term rental (STR) market in order to provide Staff with clear direction on how
to proceed. The presented recommendations (see Background and Appendix) are based
on the premise that STR is not, as-of-right, a residential use, the precedence of municipal
regulation and enforcement of land use and business licencing, and the Citys statutory
obligation to enforce safe short-term accommodations.
BACKGROUND:
Since May, Development Services has employed a dedicated researcher for short-term
rentals (STR) in order to redress the gap between the Citys policies and the actual STR
market. The vast majority of Nelsons estimated 120 STR listings are considered illegal
by virtue of a lack of business licence (most private room rentals would be eligible for a
Bed & Breakfast licence) or non-compliance with zoning (entire dwelling unit rentals,
which constitute the majority of STRs). However, only a handful of voices have
demanded that STRs (continue to) be banned. STR bans in other jurisdictions have
proven unenforceable and potentially detrimental to the tourism industry.
Central policy objective have been compliance and enforceability, which are intimately
connected with general community support of relevant regulations. The more voluntary
compliance achieved the less of a demand on Bylaw Enforcement. Experience
elsewhere reveals the relative complexity of STR enforcement. The majority of the 50
STR operators surveyed, out of an estimated 100 to 110 individual operators in the city,
were supportive of some form of regulation. A number of them have expressed general
agreement with the recommendations brought forth by Staff (see Appendix).
Data collected on Nelsons STRs indicate that this industry has unique nuances. Most
STRs are listed as available for rent for less than 70% of the time; many are much more
occasional. Out of 87 Airbnb listings reviewed in May, 14 had no reviews, indicating that
they possibly have not yet been rented. Most only accept multi-night bookings. 77% are
entire dwelling units. A number are listed on multiple online platforms. The average
nightly rate for an Airbnb in Nelson is $107, well below the average rate in Tofino,
Kimberley, and Sechelt and half of that of Revelstoke and Fernie. Self-reported safety
data illustrate that fire safety is not a given. Out of 87 listings, 53 self-reported having a
fire extinguisher and 69 a smoke detector.
Key ideas
The vast majority of the city would be eligible for STR under these propositions, but only
roughly 3.3% of dwelling units could ever be used simultaneously as an STR. They
propose that residential areas be preserved primarily for residential usedefined as
occupied for over 30 days by the same householdwith allowance for home-sharing

with paying guests, which, admittedly, constitutes a commercial use and has proven to
pose some nuisances, and sometimes benefits, for neighbours.

STRs would be allowed almost everywhere, however City-wide caps and a density
cap are proposed in residential areas, in light of general support for this through public
consultation
o
This is intended to maintain the integrity of residential neighbourhoods. Any
property owner is free to apply to rezone to commercial, if that is their intention
for the property.
o
A density cap would help ease on-street parking competition without requiring
new off-street parking to be built at great cost to resident-operators and
Nelsons natural capital.
Distinguish between rooms for rent (such as a conventional B&B) and entire dwelling
units.
A new business licence category of up to $800 for a year-round, entire-dwelling unit
rental.
The availability of monthly and summer-only licences to facilitate occasional homesharing and to enable landlords of student housing to create needed summer tourist
accommodation supply.
Year-round licence-holders to contribute to funding tourism marketing.
Fire safety inspections and a one-time proof-of-insurance requirement.
Allow for the short-term rental of multifamily building units for the first time, provided
that the property owner/manager or strata council has no objection.
A principal residency requirement, supported by public consultations; applicants must
demonstrate that the property is their principal residence
o
A new zone is proposed to allow for the possibility of a non-resident property
owner to rezone a secondary residence for STR purposes. Nelson already
requires potential B&Bs outside of commercial areas to rezone if they wish to
have more than two guest rooms.
Initial priority to existing STRs and B&Bs, but licencing requirements will still be
obligatory.
A process to revoke a licence in the case of a problematic STR.
An online, publicly-accessible directory of all licenced short-term rentals and their 24/7
contact

BENEFITS OR DISADVANTAGES AND NEGATIVE IMPACTS:

Benefits of regulating STRs include ensuring a fair, level playing field and retaining the
ability to protect the integrity of residential neighbourhoods by imposing certain
restrictions. Another is higher-quality accommodations. One local host claims that
operators who pay for a business licence will be more serious about hosting than those
who casually give it a try. Staff believes that Nelson is in a position to achieve a superior
compliance rate than other cities have achieved by introducing dynamic regulations and a
realistic enforcement strategy.
The status quo carries the disadvantage of a lack of clarity. Currently, the public is not
clear on what is and is not permitted. Enforcement has been complaint-based and
property owners have been unhindered in illegally transforming residential properties into
STRs and subsequently requesting that the City legitimize and regulate their activity. This
encourages a precedence of 'buy property first, push the land use parameters later'.

Actively prohibiting STRs has not been advocated for by the community or tourism
industry. Enforced prohibition would be resource-intensive with limited revenue generated
through licencing. Other cities have not succeeded. A negative impact on tourism,
particularly in the summer, would be a possible consequence. Anecdotal evidence from
STR operators and visitors suggests that the local STR market is composed primarily of
visitors of friends or family in residential areas who thus do not wish to be downtown.
The benefits and disadvantages of the specific policy options (see Appendix) will be
discussed in this workshop.
LEGISLATIVE IMPACTS, PRECEDENTS, POLICIES:
The Zoning Bylaw and Business Licence Bylaw do not recognize or permit the short-term
rental of Guest Homes. Guest Suites are only permitted in R6, which covers two
properties in the City of Nelson.
The Official Community Plan does not provide for the possibility of permitting the majority
of the currently illegal short-term rental stock, which mostly consists of entire dwelling
rentals. It states: Residential neighbourhoods will accommodate bed and breakfast type
accommodations, and all other tourist accommodation types will be located in the
Downtown and Waterfront neighbourhoods.
Municipalities carry a statutory obligation to ensure the fire safety of hotels, lodging
houses, and any other building, except a private dwelling, where lodging is provided by
means of regular inspection (Fire Services Act, s. 26).
A legal paper on short-term rentals issued by Young Anderson Barristers & Solicitors
indicates that the Hotel Keepers Act strengthens the commercial expectation that a hotel
is expected to have management on site at all times to ensure that guest behaviour does
not disturb neighbouring guests and property owners. This strengthens the argument for
on-site owner-operators of STRs.
The British Columbia Court of Appeal has confirmed the authority of Council to revoke a
business licence in response to poor management of a motel (377050 BC Ltd. Dba the
Inter-City Motel v. Burnaby (City of), 2007). A process to revoke the licence of a
problematic STR is widely considered an essential best practice.
COSTS AND BUDGET IMPACT - REVENUE GENERATION:
Short-term rental business licencing will generate new revenue that can be used to
increase general Bylaw Enforcement capacity. A significant number of short-term rental
operators have indicated their desire to be regulated and licenced.
The proposed $100 triannual inspection matches the Building Inspectors current costrecovery charge for ad hoc building inspections.
IMPACT ON SUSTAINABILITY OBJECTIVES AND STAFF RESOURCES:
The public hearing process invoked by amendments to the Zoning Bylaw and the Official
Community Plan would require Administration and Development Services staffing.
Development Services staff time would also be required for preparing informational
material for the public and enforcement strategies for Bylaw Enforcement.

The processing and inspection of short-term rental business licence applications would
add to the workload of front counter staff, Development Services, and the Building
Inspector. Two hours of staff time are anticipated per application. Staff estimates that
there are 120 short-term rentals in the City of Nelson, although many are seasonal or
occasional and it is anticipated that some may cease operation if a licencing regime is
implemented.
Increased Bylaw Enforcement capacity is required to enforce compliance.
COMMUNICATION:
Extensive consultation has taken place so far, both within the city and beyond. Further
public communication will be hosted on the str.nelson.ca website.
OPTIONS AND ALTERNATIVES:
1. That Council direct staff to prepare recommendations for bylaw amendments based
on the direction provided by Council and return with a report in August 2016.
2. That Council receive staffs report and will provide further direction to staff at a
future date.
3. That Council direct staff not to proceed further with work on short-term regulation at
this time.
ATTACHMENTS:
Memo of policy options for discussion
Licencing and enforcement costing
Summary of correspondence and public input
Letter from the Nelson Short-Term Rental Owners Association
Correspondence from an informal group of Short-Term Rental Operators
Letter from the Town Manager of Fincastle, Virginia
RECOMMENDATION:
That Council passes the following resolution:
THAT Council directs staff to prepare recommendations for bylaw amendments based on
the direction provided by Council and provide a report at the August 8th Regular Council
meeting.
AUTHOR:

REVIEWED BY:

____________________________
STUDENT RESEARCHER DEVELOPMENT SERVICES

____________________________
CITY MANAGER

____________________________
MANAGER OF DEVELOPMENT
SERVICES

City of Nelson Short-Term Rental Project July 2016

Possible Business Licence Types

Nelsons business licence fees have not increased for a number of years. Considerations
include:

Inflation
The need for greater capacity in bylaw enforcement for all issues, including to proactively
enforce business licence compliance for all business in order to ensure fairness
The resource-intensiveness of enforcing on STR compliance compared to other
accommodations
Input received from some STRs requesting a licence of $500-$1,000 annually
The need that business licence fees be levied on a cost-recovery basis, including
enforcement
Findings on cost-recovery for licencing from other jurisdictions
That conventional accommodators such as hotels have a direct stake in ensuring STR
compliance
Type of Rental

Licence
Validity

Basic
Cost

2 rooms and under

Year-round

$350
$110

3 rooms and over

Summer
only (May August)
Year-round

$450

$700

Year-round

$800

$1,050

Summer
only (May August)
One month
(one per
year)

$400

$500

$150

$250

Guest House or
Suite

Building
Tourism
Total
Inspection* Membership Cost*
($100)
($150)
X
X
$600
$210

*It is proposed that building inspections only occur every three years. The $100 cost-

recovery charge would thus only be charged once every three years.

What is an inspection? A building inspection ensures that basic safety, fire safety, and public
health standards are met. The inspector also verifies that parking requirements are met and
that the site is as described.
It is proposed that other accommodation licences (hotel, hostel, and motel) be increased by
$100-$200.
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City of Nelson Short-Term Rental Project July 2016

It is proposed that all other licence categories be increased by up to $30, except for
Carnival/Circus (a daily licence), Street Performer (an annual licence), and Busker (a daily
licence).

Short-Term Rental (STR) Caps

It is proposed that the following caps be imposed on STRs in residentially-zoned
neighbourhoods:
Type of cap
Year-round licences, of all types, in residential
zones
Summer-only licences (May to August)
One-month licences (1 per address, per year)

Recommended limit
110
40
None

Caps are not imposed on other businesses such as hotels, however other permit types are
greatly restricted geographically, by zoning. This document assumes Nelson will allow STRs in
nearly the entire city, but the entire city should not become STRs. Without going through
rezoning and a public hearing, hotels and most retail, for example, are confined to the
downtown core and along the highway.
In the first two weeks of each calendar year, to ensure continuity for those who have been
operating, it is proposed that the City only accept renewal applications for a property that has
been issued an STR licence within the previous calendar year. This nuance is not required for
other business licences because they are not subject to a cap.

Density cap
A block is defined as the two sides of a street directly facing one another, including alleyways.
Typically, blocks in Nelson have between 12 and 16 lots. Staff are recommending no more than
3 STRs per block at any one time.

What could STR licencing require?

1. A mandatory STR business licence for each dwelling unit. If both a primary dwelling unit
and a secondary suite are let on a short-term basis on the same property, require two
licences.
2. Create a new STR application form, separate from the general Business Licence form.
Differentiate between new application and renewal. Allow space for applicant to provide
a 100-word project narrative describing the intent of the application; this project
narrative will be publicly available online. This idea is borrowed, with modifications, from
Portland, OR.
3. A $500 deposit to be held during the first year of a licence as security against any costs
incurred by the City as a result of investigations, hearings, or other enforcement actions.
The City could choose to return this deposit after one year, under the pretext that if an
STR is problematic for the neighbourhood, this should show within the first year. In BC,
Sechelt and Sun Peaks require a deposit; however, they hold the deposit for as long as
2

City of Nelson Short-Term Rental Project July 2016

the permit is valid.

4. Within the first 30 days of the issuance of the new STR licences, only accept applications
from short-term rental operations that operated between October 1st, 2015, and June 1st,
2016.
It is proposed that those operators that can prove they were in operation between
October 1st, 2015, and June 1st, 2016, be exempted from the density cap and residency
requirement. This is to acknowledge the significant investment that many operators have
already undertaken to upgrade their accommodation.
5. A person-limit on the number of guests per rental unit allowed. A common figure is six;
wording could be found to allow for flexibility with small children.

Possible licence application requirements

a. Triannual building safety inspection
a. Make available a pre-inspection checklist outlining some of the requirements
of an accommodators licence to help applicants prepare for the inspection
b. Proof of property ownership
a. Issue the licence, and any renewal, only to the property owner
c. Proof of principal residence (at the same address; not necessarily same suite/dwelling
unit)
a. This means requiring that the applicant prove, with documentation, that the
property is their primary, not secondary, residence
b. Exemption for summer licences
c. If a property owner does not meet this requirement, but still wishes to rent
short-term, they will have the option of applying for a rezoning
d. 24/7 local contact person(s) one or two
a. The applicant may assign themselves or someone else to be a 24/7 contact
person to be available to answer phone calls at any time, within 15 minutes,
during a guest stay
b. One person may not be the contact person for more than two properties
c. The contact would be expected to reside within a 30-40 km distance of the
property
e. Proof of valid Nelson Kootenay Lake Tourism membership
a. Exemption for summer and monthly licences
f. Certificate from a broker licenced to sell insurance in the Province of British Columbia
a. Could be a one-time requirement for new applications and not necessary at
renewal
b. Liability insurance covering bodily and personal injury arising from the
commercial use conducted pursuant to the licence
c. It would be within the Insurers discretion whether third-party insurance, such as
from a listing service, suffices to provide confidence that the property is insured
at all times
g. In multifamily dwellings, require support from the building corporation/strata
3

City of Nelson Short-Term Rental Project July 2016

a. For strata, the letter must be signed by the president of the strata council
b. For rental housing, the letter must be signed by the property manager or
owner(s)

Parking Options
Type of residence

Stalls required*

Apartment/multifamily suite (residence)

Secondary suite or detached dwelling
unit

1 stall as per bylaw

Entire house (primary residence)

Guest room(s) in primary residence

2 stalls as per bylaw (except in R3 zoning: 1 stall)

1-2 stalls as per bylaw (rounded to the nearest number: if 1.52,
rounded up to 2)

Option 1
1 stall per guest room, as per
bylaw

Option 2
Eliminate parking
requirement

Pros
Maintains current requirements
Same as current B&B
requirement

Pros
Increases compliance
Potential to conserve green
space

Cons
Many sites do not have capacity
for more on-site parking
Eliminates on-site green space

Cons
Potential for conflicts with
neighbours
Adds to parking congestion

Potential to decrease
compliance
*The intent is that guests will only park in front of the house they are staying at
and it will be required that this be made explicit in any online listing.
In certain residential areas where parking is limited, there are 2-hour parking zones
where residents are entitled to one residential parking permit per house, however
guest permits are currently unregulated. In these areas, consideration should be
given to limiting the number of guest permits to 1 per property to alleviate parking
congestion. As well, charging short-term rental operators for their guest parking
permit could also be considered.

Enforcement Options
Objective

Ideas

Grace period

Unlicensed accommodators will have 60 days from policy adoption to apply for
a licence or cease operation. This notice will be widely advertised and
electronically sent to all listings on known platforms, including Airbnb, VRBO,
and others. Clear information on STR regulation will be made available online.
4

City of Nelson Short-Term Rental Project July 2016

After 60 days, Bylaw Enforcement will follow-up on any complaints received

and have a proactive enforcement mandate for STRs.
What constitutes Illegally advertising a space for short-term rental will be considered a violation
a violation
of bylaw, regardless of whether a booking is made. For example, if an STR is
found to be accepting bookings for the month of April, but the operator only
has a licence valid for May to August, this is a violation. Furthermore, a listing
on an online booking platform must include the business licence number, the
amount of off-street parking, and the maximum number of guests, as stated
on the issued licence.
Neighbourhood Information will be maintained online indicating the number of licences issued
awareness and
at any one time as well as indicating where they are and providing each
transparency
licences 24/7 contact information. Anyone may sign up to receive email
notification of any new permit application and/or approval within the City.
Inspections in
Allow the City to inspect an STR, upon giving at least 24 hours written notice to
case of
the owner.
complaint
Guest registry
Require operators to maintain a guest registry. If a complaint is received, the
owner, upon request from the City or police, shall provide the guest registry
for inspection.
Discretion with
The decision to renew an STR licence should, at the Manager of Development
renewals
Services discretion, take into consideration any complaints that have been
made about the property within the previous year.
Process to
Any listing of the property on a booking website omits the maximum
revoke a permit,
number of off-street parking spaces or the maximum guest-occupancy as
if:
stated on permit
Three fines have been issued to the property owner within the previous 3
years
Change of property ownership (permit is non-transferable)

Changes for current Bed & Breakfasts

Under this concept, existing B&Bs would be licenced under the proposed licence types, namely
two rooms and under and three rooms and over. The current regulations already use the
two-room mark as a cut-off point.
It is proposed that annual licence costs be increased as noted in the table on Page 1 in order to
fund enforcement of the STR market
A proposed requirement of proof of insurance and Tourism membership; it is expected that
most comply already.
It is proposed that existing B&Bs not be subject to permit caps and thus not be denied a licence
on that basis.

City of Nelson Short-Term Rental Project July 2016

Additional considerations
It is recommended that regulations, including cap limits, be reviewed biannually.
Council may wish to consider reforming development and utility fees levied on rental housing
providers with the goal of encouraging and incentivizing long-term rental housing.
Strengthening the Noise Control Bylaw.
Working with the Province to incentivize the creation and preservation of long-term rental
stock.
Encouraging the Province to enforce fair taxation for tourist accommodations and specifically to
equalize the market between conventional accommodators such as hotels and short-term
vacation rentals.
As incentive for compliance with accommodation licencing, the City of Nelson may wish to work
with BC Transit to pilot free public transit service to guests of municipally-licenced
accommodators. To be successful, such a pilot project would benefit from increasing the
accessibility of information on local transit by distributing easy-to-understand schedules and
maps to all accommodators. This is inspired by a long-running program in Konstanz, Germany,
(population 80,000) where a 2 Euro per day, per visitor tourism tax is levied. In return, visitors
are given a bus ticket valid for the duration of their stay.
-

Anticipated benefits include: increased compliance with licencing in order to access the
benefit, transit route and schedule improvements induced by increased use,
mainstreaming or increased awareness of local transit, and alleviating downtown parking
demand
Funding could be achieved via the City, provincial reform to allow the MRDT hotel to cofund the project, or a low-cost opt-in system that is advantageous for accommodators:
participating accommodators could agree to levy perhaps $1 per day, per guest towards
improving local transit and granting their guests free access to public transit. 1

Downtown businesses may also be interested in participating in an opt-in transit program for their employees, to
encourage their employees to leave downtown-area parking for customers. Even if only three downtown
employees gave up off-street, alleyway parking for public use, given the average turnover of downtown parking, a
significant number of customers would be able to find parking over the course of the day, without increasing
parking supply. If a critical mass of downtown employers and employees opt-in, transit service is anticipated to
improve significantly. Many businesses in Canada and the US do this and some American jurisdictions incentivize
employee cashing out of parking in favour of transit commuting.

Short-Term Rentals New Licencing Revenue

Source of new
revenue

Number of
licences

Cost

Guest Rooms

12 new
year-round
12 new
summer
9 existing
B&B
licences
30 new
year-round
30 new
summer
20 new
monthly

$350- N/A
$450
$110 N/A

Guest
House/Suite

Increased
licence fees
other
accommodators
All other licence
fees (except
buskers,
performers)

Increase
(each)

New
licence
revenue
$4,200

New inspection
fee revenue
(tri-annually)
$1,200

$1,320

$1,200

$350- $270$450 $290

$2,430

$900

$800

N/A

$24,000

$3,000

$400

N/A

$12,000

$3,000

$150

N/A

$3,000

$2,000

10

SUBTOTAL $46,950
$150*
$1,500

1298

$25*

New funding for

Nelson Kootenay
Lake Tourism
$1,800

$4,500

$11,300

$6,300

$11,300

$6,300

$32,450

SUBTOTAL $33,950
TOTAL
$80,900
These are considered to be conservative estimates.

* These numbers were chosen to simply calculations. The current recommendation is to potentially
increase hotel/motel/hostel licences by $100 to $200 and other licence types by $10 to $30.

Short-Term Rentals Enforcement Costing

Increased Bylaw Enforcement

Host Compliance annual service fee*

Extend the contract of the current 6-month Bylaw

Officer to 12 months
Hire a new year-round, part-time Bylaw Officer
Hire a new year-round, full-time Bylaw Officer

* There is a six-month satisfaction guarantee.

^ Approximate cost based on the current CUPE contract.

$41,000^
$41,000^
$82,000^
$12,000

Summary of Input on Short-Term Rentals

Accommodators have consistently been asking for a level playing field. Some have indicated that STRs
are increasing the proportion of one-night bookings that they receive. There is a huge benefit to
accommodators of having stay-over guests as it reduces both housekeeping and front-desk (checkin/out) costs. We suspect, without any empirical evidence, that longer-stay guests are more attracted to
STRs, which often have minimum multi-night stay requirements.
Out of the 297 responses to the public survey:

84.7% agreed that Residents should be free to rent part of their homes on a regular basis or
their entire home on an occasional basis (e.g. when the family goes on vacation) in order to help
pay the rent or mortgage.
60.9% agreed that It is a problem when someone has multiple Airbnb/STR listings and acts as a
professional Airbnb/STR landlord.
70.3% agreed that Building and fire safety are serious concerns with Airbnb/STR properties.
The City must inspect them as it does hotels and bed and breakfasts.
73.4% agreed that Airbnb/STR hosts must be held to the same off-street parking requirements
as bed and breakfasts: one parking spot for each room for rent.
70.8% agreed that Airbnb/STR guests on-street parking must be regulated and controlled.

Only 29.9% did not want to see a primary residence requirement for STRs.
Only 21.7% believed that there should be no regulation of STRs because it is a homeowners right.
Under 12% asked that the City prohibit STRs.
The most frequent response to the question on being personally affected by STR in Nelson was that it is
hard to find a rental home. The other most common types of answers, in order, were that no, it has not
affected me, that it benefits tourism, that it benefits locals (by providing a source of revenue),
complaints about noise and other neighbourhood impacts, and finally that it is unfair for other
accommodators.
Complete survey responses are available for your review:
http://str.nelson.ca/wp-content/uploads/2016/05/Public-survey-report-web.pdf
One page of highlights: How have you personally been affected or impacted?
http://str.nelson.ca/wp-content/uploads/2016/05/Highlights.pdf
Of the 50 responses to the survey for STR hosts:

Only 25.5% say that they rarely or never live on-site during guest stays
76.6% only have one listing
Five are themselves renters
74.% claim they have sufficient off-street parking
56.3% say that all of their neighbours are aware of their STR; 31.3% say some are

Most say that their listings are active about half of the year. Many of them are previous landlords refuse
to have to deal with the residential tenancy board. Most say either that they would rather leave their
properties empty than rent to long-term tenants or that their STR is not suited to long-term rental
because of its design or because the family uses it frequently for other purposes. Answering why they do

STR, the most frequent response was the extra income, followed by bad experiences with tenants, fun,
and flexibility.

Key quotes from hosts:

[I do it] to help be able to afford my home
To share a place I love without the hassle of opening a BnB which I wouldnt be able to work.
I see that there are concerns regarding safety and health in STRs. And it makes sense, but Airbnb for
example has the review way of evaluating the quality of accommodation (and travelers are demanding)
and it is very effective to make owners offer excellent conditions.
I think the city is lagging behind on how it develops and implements its city bylaws. [] the relaxed
enforcement of the rules has allowed many people to take liberties, I guess in part, myself included.
It is CLEARLY filling a massive market demand, and there is a huge benefit to the region in doing it:
thousands of tourists, spending here, that otherwise wouldnt come, and making housing affordable for
current residents. The City should ABSOLUTELY NOT get into the idea of limiting the number of licenses.
The market will determine the right size
This is to me a very intrusive and authoritarian type of attitude on the citys behalf, creating a witch
hunt of ordinary people trying to up their income a bit.

Complete survey responses are available for your review:

http://str.nelson.ca/wp-content/uploads/2016/05/STR-host-web.pdf

Sample of Correspondence on Short-Term Rentals

Email to Alex Thumm and Pam Mierau on June 27 t h , 2016:
Not yet having a family of my own, I am the organizer of our group of friends to get to new places to
spend a long weekend together. Its usually a group of at least 6 people for several days, and renting a
whole house is the only thing that works. Well do group skiing or hiking trips, on a rainy day we might
stay in and play games, and we love to cook together. The only choice for us is a vacation rental. If we
had to do it in hotels, we just wouldnt do it at all. Meaning lost tourism dollars for your community.
Email to Alex Thumm on June 26 t h , 2016:
Hi Alex
I attended the STR forum last week and had a few thoughts following the meeting. I am an owner of an
Airbnb as well as a long term 4-plex rental, in which I have great tenants and an appreciation for how
difficult the rental market has become in Nelson.
Like others, I invested a significant amount of money in the creation of the Airbnb suite in my basement,
roughly $70,000, all locally hired labour as I have no skills in that department. Its unlikely I would
recover the costs of that apartment as a long term rental (its a small space) especially factoring in the
increase in city taxes and water/sewer for a legal suit, let alone realize an income- which after all is the

goal of a rental unit. That income is an integral part of our household income, and one of the ways living
in Nelson was made possible following our move here 3 years ago.
So the point made by Mayor Kozak that developers have found construction costs prohibitive to the
building of apartment buildings, also holds true for many homeowners whove invested in suites in their
homes. For that reason, I feel that the problem of long term rentals in Nelson should not be placed
solely on home owners to solve.
I am in agreement that regulations and fees are necessary, and in many cases welcome as a way to
legitimize our businesses.
You were seeking input into the various proposals other cities have enacted. I didnt get a chance to
absorb them all, but one stuck out for me. The idea of limiting the number of days a vacation rental can
be available for rental presents bigger problems for a small unit like mine which is at the lower end of
the price range. A bigger unit is able to earn much more income in a short period of time since they are
able to charge more for more occupants. I make my income through a year round rental.
Airbnb owners are quintessential Nelsonites- small business owners cobbling together several sources of
incomes in a limited job market. They are part of the vibrant, eclectic offerings that is such a important
part of this wonderful city. Im glad the city is open to how best to solve the problem and hope this
process results in a fair outcome for everyone.
Many thanks for the opportunity for feedback,
Email to Alex Thumm on June 22 n d , 2016:
For me personally I can't accept the idea that someone who's currently deeply invested in airbnb would
be unable to obtain a permit because of something impossible to fix that isn't really causing a real life
problem right now. (Their zoning, lack of living nearby, or inability to make new land for a parking
space.) I really hope the city will use discretion and compassion to enable these current hosts to
continue rather than shut them out. This would show the city genuinely cares about each individual
person and this is a small enough town that it would be possible to do.
Email to Alex Thumm and Pam Mierau on June 20 t h , 2016:
Hello;
I am writing on the matter of vacation rentals, as I understand this a topic your local government is
currently discussing within the community.
Over the past seven of years, I have used a vacation rental in Nelson on three separate occasions and I
have stayed in hotel for twice. For reference, I live in Victoria. When traveling on my own for work, I will
use a hotel in town. However, when we travel as a family, its me, my wife, and our two children. Our
dog usually comes too. And has been the case in the last few visits, we have had some family friends join
along as well. Were we not to have access to a vacation rental in Nelson that would mean at least few
hotel rooms, plus meals out three times per day. For us, its a matter of cost and also experience. Its
simply not feasible for us to spend $600/night on hotels plus meals. And without a vacation rental, we
wouldn't have the same experience as family and friends were we not able to reside in the same
accommodation. Without a vacation rental for our group, its probably not a trip we would make to be
honest.

I look forward to continued visits to Nelson. As you consider the various viewpoints on this matter, I
hope you also consider those of the visitors to your beautiful community.
Much appreciated Email to Alex Thumm and Pam Mierau on June 18 t h , 2016:
I have recently become aware of the issue surrounding short term rentals (STR) in Nelson. As someone
who regularly travels to Nelson to visit family, this issue is near and dear to me. Because of my
circumstances, staying in a B&B or hotel accommodation is not an option for me. I travel with either a
special needs child, or with a multi-generational family group. In both situations open living spaces,
home like accommodation and amenities, kitchens, and more than one bedroom are required,
something a B&B or hotel rooms cannot provide.
If there was a ban on STR in Nelson, or they were taxed exorbitantly, we would be deeply disappointed
and would be forced to look for accommodations in surrounding areas such as Kaslo or Christina
Lake. The nature of travel has changed significantly, STR allow people, like my family and I, the ability to
travel to Nelson, contribute to the local economy, and advocate positively for tourism in the Nelson
area.
It is my hope that will not change in the future.
Sincerely,
Email to Alex Thumm on June 6 t h , 2016:
First, I am a HUGE fan of this model, have used it successfully in many cities.
I am, however, very concerned about the impact of these on Nelsons vacancy rate and availability of
housing. I have heard that there are a huge number of listing in this small city. And I know from
personal experience that all rental housing - not just at the affordable end, is in demand.
Word on the street is that people are converting their spaces to Air B & B rather than putting them into
the rental market.
Thanks for this work. A valuable contribution.

NSTROA

nelson short-term rental owners association

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819 Houston Street, Nelson BC V1L 5J3

T 778.350.5800 E nstroa@gmail.com

Alex Thumm, B.Soc.Sci. (Hon.), M.Urb. (Candidate)

Student Researcher, Development Services | City of Nelson

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July 7, 2016
Dear Alex:
Thanks for the opportunity to respond to your stakeholder policy review document. Here are the comments
from our association:

General:
The general consensus from the Town Hall meeting from both STR owner/operators and others (Hoteliers,
NKLTB, etc), was that vacation rentals form an important part of the accommodation service in Nelson, but
that operators should pay their fare share. We couldnt agree more. There currently isnt a mechanism for
us to pay our share; if there were, we would be paying it.

City Council has a discretionary budget of perhaps $60,000 per year for any and all items not in the annual
budget. Why not use this new type of business called STR as a means to increase that discretionary
budget? Collect appropriate license fees, but dont pre-commit those same dollars to an expensive
enforcement regime that consumes all of the monies collected.

Start from the assumption that Nelson is different from downtown Vancouver. Were not a city of 1,000-unit
high-rises with hundreds of STRs operating as an off-the-books hotel room. Were a tourist town that is now
attracting a new type of tourist that is a net increase to the total tourist population. We are accommodating
families with multiple small children along with an ageing grandparent; were accommodating family reunions
for kids who grew up in Nelson but moved away and are now coming home to visit parents and
grandparents and who need a larger space. The typical guest profile of a STR is someone for whom
traditional hotels or B&Bs dont work. If it werent for our STRs, these tourists simply wouldnt come.

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Lets work on supporting and building on this economic driver for the City of Nelson.
Business Licencing fee amendments: (pages 1-2)
- Rather than take a punitive, presumption-of-guilt approach to business licence enforcement, (and incurring
huge expenses in human resources, negating any net benefit from the revenue collected from those
licenses), begin with a voluntary approach to assess how many STR will naturally comply. This can be
reviewed after a year to determine whether or not an expenditure for additional by-law enforcement is
required. I believe that through our Association, we can compel almost all STR operators to purchase the
appropriate licence.

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- proposed new types of licenses and rates look fine.

- I would be cautious around inspections and what that means. If the goal is to bring people above-ground
in this business, we should make it as easy as possible. I dont know of very many homeowners who would
want an inspection to take place in their homes; the fear is that the inspector might write-up a list of tens of
thousands of dollars worth of requirements. What specifically would be inspected? Since these are also
family homes, and not a purpose-built commercial enterprise, applying commercial inspections seems
heavy-handed and unnecessary. Clarification on inspections would be helpful. A fire/safety inspection is fine.

A building inspection seems a bit much since all homes would have already been granted an occupancy
permit upon construction completion. This may also be redundant since home insurance requires fire/safety
issues to be addressed.

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- Tourism membership is fine.

Short Term Rental Licencing Bylaw - New (pages 2-4)

- The $1,000 deposit may be onerous and excessive for the shared room STR. There were two young
women at the Town Hall who occupied a 3-bedroom home, and rent their spare room on Airbnb to
occasional guests to help with costs. If they were told they had to pay a $1,000 fee, they may instead
choose to just stay underground and not participate in the process. Like the licensing fee schedule above,
being reflective and adaptive to the different types of accommodation makes sense, particularly for the first
year while we all gain an understanding of the market, the business, the costs and benefits and drawbacks.

Application requirements: (page 3-4)

A. Building safety inspection (see above)

B. proof of ownership - this is fine

C. proof of residence - this is fine

D. 24/7 contact - we all do this anyway, but its probably moot with (c) above.

E. Tourism membership - fine

F. Insurance - fine, however this seems to be outside the scope of the Citys responsibility.

G. R2 R4 zones - fine


Conditions that applicant must agree to (pg. 4)

a. Number of guests: This should be revised to reflect Adult guests. For example, were currently
hosting a family of Mom, Dad, Grandma, and 4 children under the age of 12. I dont think the intention of this
item is to restrict these people; youre probably trying to prevent renting a house to 15 adults. Fair enough,
but lets describe the actual guests accurately.

b. Advertising = offering: fine

c. License number - fine

d. parking - fine

e. transferability - fine

f. address transferability - fine

g. guest registry - fine

Parking (page 5)
- Fine, however it should be noted that outside of the downtown core and a few blocks south, parking
enforcement is practically non-existent. For example, my property has off-street parking for 6+, so we dont
have an issue. But technically, the block is marked as non-parking for much of our adjacent area, but our
neighbours (long-term renters) have multiple vehicles out there all the time, illegally.

Zoning Amendments (pages 5-7)

- No concerns with any of the proposed amendments, other than to suggest that before you lock yourself
into a by-law that caps the number of licenses available, we should consider including language to review
after a year. The current number of STRs is a good place to start, but the right number will be determined
by the market and it would make sense to allow the market time to indicate what that number should be.
Particularly in the case of owner-occupied STR/Guest House, a restriction on rentals seems heavy-handed.
For example: if we currently have a license and our block is now at the maximum of three STRs and a new
owner would like to get into the business, they could potentially lodge unwarranted complaints in an effort to

cause us to lose our license. I dont think the City wants to get into a situation where theyre pitting
neighbour against neighbour. Again, owner-occupied STR could be perhaps exempted from many of the
proposed regulations.

Ocial Community Plan amendments (page 8)

- Fine

Enforcement (page 8-9)

- As stated in the introduction, I would caution against immediately creating a very expensive and
cumbersome enforcement regime before its clear that its warranted. Approach this from a voluntarycompliance model, and adjust as necessary. As you clearly heard at the Town Hall, the operators of STRs in
Nelson are community residents who want to operate legally, contributing their fair share. The very nature of
a hospitality business demands that operators have customer service, respect for neighbors, and all other
issues discussed here, top of mind. Immediately moving to a punitive approach that presumes wrong-doing
feels contrary to the spirit of what STR operators already do. I would suggest that Nelson create its own
recommendations and policies (like youve done here), and not start from a negative place as if we are in
Vancouver, or Berlin, or NYC.

Additional policy considerations and Intergovernmental work (pages 8-9)

- This is a key piece for our association. We agree completely that there needs to be more long-term rental
housing in Nelson. You also heard clearly that none of the STR operators at the Town Hall will go back to
(or into) that business because of the challenges and expenses.
- By using the business license fee as a way to fund additional by-law enforcement before its known
whether or not enforcement is even needed, the City will be giving away tens of thousands of dollars that
could be used to incentivize or support Long Term Rentals.
- For example, the STR License Fees could be directed to a special fund that is held in reserve to assist with
development of long term rental units (i.e. a developer building a rental apartment building could apply to
the fund to waive development cost charges, or water/sewer hook up fees, etc. This would then incentivize
the private sector to invest in rental housing.
- Lobbying the Province to revisit the Residential Tenancy Act to give power back to landlords would also
encourage more long-term rental stock. With the current wording of the Act and the current operation of
the RTO, I simply would not ever risk my mortgage with a long-term tenant. If I knew that I was actually
protected and had the ability to manage my property without undue and unfair dictates from the RTO, I
would likely have a more positive opinion on using my space for long term rental.
- Encouraging BC transit use for tourists staying with licensed accommodators is exactly the type of action
that makes sense along with this policy review. Id wholeheartedly agree with that move, and would be
happy to work with a committee on how it could work.

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Alex, Id happily volunteer my home as a test case or pilot project to go through the proposed steps to see
if this all works in reality as well as on paper. Let me know.
Cheers,

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Stephen Harris
NSTROA

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An Airbnb viewpoint
Primary problems as we see it
* Airbnb stealing business from approved accommodations and reducing long term rentals
available
* Existing Airbnb hosts are afraid we will not be able to get licences and will have to shut
down. (We are content paying for business licenses etc.). Weve put incredible effort into our
accommodations and it has become part of our lives.
Side issues - largely speculative and technical issues that aren't actually causing many real life
problems right now. We feel these issues are being used to bully us and create restrictions so
we can't compete with hotels and to force us to rent to locals.
Zoning how many real life complaints have been made about an existing Airbnb in wrong
zoning causing problems because its in the wrong zone?
Parking - how many real life complaints are there that Airbnbs are preventing people from
being able to park?
Tax evasion - we can report income on line 104 or use the statement of real estate rentals
just like any regular landlord. We are willing to pay hotel tax if it could be done.
Housing shortage for locals - there will always be hundreds more people who want to live
here than rentals available no matter how many we make available. Converting some Airbnbs
to rentals might alleviate pressure for a few weeks but then the shortage would continue.
Many of us have permanently rejected local renters and will not rent to them again.
Quality control - Airbnb reviews weed out poor quality very effectively.
Insurance solved between homeowner and insurance company.
What wed like to say to Nelson residents:
Tourists WANT Airbnb options! Hotels can't provide the types of accommodation and
experiences people are now looking for. We bring additional tourists to this area who would
not come otherwise. Many people now use only Airbnb when travelling. Although hotels
suffer somewhat, just as many local people and businesses are benefiting. We offer
accommodation diversity, diversity being something our city embraces and is known for, and
feel our impact in the community is a net benefit.
A SOLUTION IDEA
We would be happy to accept all reasonable terms and restrictions the city has for any new
starting Airbnb from this day onward. But wed like to see compassionate discretion used for
those existing Airbnbs that wont be able to meet all criteria. Wed like those STRs to be
grandfathered in and able to get licences so nobody currently hosting is left out. (Some
mandatory safety and insurance requirements would be fine.) In cases where a genuine
complaint is made to the city by a neighbor that has been affected by an Airbnb because it
hasnt met all requirements it would be possible for the city to revoke the license.

RESULT
The city would have control over all new starting Airbnbs and they would need to meet all
criteria. Licences to nonconforming STR's could be revoked if a problem came up.
For this idea to work its important to understand that Airbnb has a fairly high host dropout
rate. Lots of folks try it for a while but its not for them. Over a period of months to a
year+ many existing Airbnbs - who may not have met every requirement - will fizzle out. Once
they leave and let their license lapse they then would have to meet all requirements to renew
in the future. This approach would cause a gradual transition from our current state to one
where the city fully controls STR's, and how many there are, without shutting out anyone
currently involved with sudden changes.
We feel this is a solution that would be reasonable for all parties at the table.
Deborah Nasmyth
Residential Landlord and Airbnb Superhost
Follow-up email from Deborah Nasmyth responding to the stakeholder review:

Hi Alex,
Thanks for sending this its a bit complex to me, particularly zoning, but most of it makes
sense. I super appreciate the grandfathering elements.
My feedback is that $800 plus other costs will be too expensive for many. I know Stephen
proposed up to $1000 on behalf of the NSTROA group but its important to realise (and some
hosts are upset) that he created the group and then presented the groups ideas at Town Hall
prior to inviting anyone to join his group or having any sort of meeting. So the ideas of the
NSTROA group are not really a good refection of Airbnb hosts and I dont think anyone else
supported a $1000 business licence idea. Maybe Stephen can afford it but most hosts operate
on a smaller scale than he does. A business licence fee of a few hundred dollars I think most
people would be ok but I wouldnt go over $500.
Having a licence cost higher than the fine for being caught may motivate people to try and hide
and wait until they get warnings from the by-law officer before they comply or shut down.
If I remember correctly other Nelson businesses get licences for is it $130 or something? And
they may be making tens of thousands of dollars a year. Meanwhile Airbnb hosts will be paying
$800 plus extra costs and, although a few are bragging about exceptional earnings, I think many
are pretty small scale and likely only make a few thousand a year. It would be nice if the cost of
business licences in Nelson was related to the scale/earnings of the operation rather than the
type of industry.
Thanks for your work on thislooking forward to seeing the final product.
Letter in support of this proposal from June 22 n d , 2016:

Hello Alex;

I just wanted to take a minute to write and express say that the consensus amongst people
operating STR's seems to be that your work in this regard seems organized, respectful and openminded.
The last week there has been a flurry of emails as the informal group we started tried to develop
ideas or proposals. I am encouraged to learn from Debra that some of these may be given
consideration and that the tone of your meeting was not the strident anti-Airbnb one I have heard
of late in the media and in town. She and I discussed at length the idea of grandfathering or
other flexible means of bringing people into conformity so that the impact is less drastic.
Obviously any of these future rules are going to exclude a few, many or all of the people doing
this type of rental, and I recognize I may be one of them.
In that regard, as you probably already know, I don't live in BC, although it is my plan to move
back there in retirement. I recognize that this is self-promotion, but if you would permit me to
speak to the idea of absentee landlording, I'll say the following: it is a source of stress and I don't
like doing things this way, but I'm stuck with it. For 15 years I was an absentee landlord for full
time tenants and even with great ones it was not easy. With some of the negligent ones it was
terrible. Even if I am barred from STR'S I will not go back to full time renting in that space,
since I will never be able to stay in my own house and after a major restoration I don't want it to
get run down again. Problems with renters were the biggest reason I hired a caretaker and
became a member of Airbnb - managing the property is now to a much higher standard because
my agent is inside the unit on a regular basis, something that was impossible with full time
renters. Almost everyone who runs a STR has said it: this type of guest is generally more
respectful and appreciative of their stay and the property.
As far as not contributing to the community, I suppose I take issue with that since I my house has
been made available to the community for 25 years, including the many family and friends of
locals that I rent it to on Airbnb. In the Kootenays like everywhere else in BC (i.e. lower
mainland anyone?) there are "outsiders" and many foreigners who buy properties to sit on the
them for investment or to holiday for two weeks a year, leaving them unoccupied for the rest.
That, in my opinion, is the definition of not giving back to the community. I have long term
friends and contacts in Nelson and feel a sense of belonging there in a way that makes me not
want to sell the house for any price.
Thanks for your consideration of my comments. Best regards in your deliberations and my
hopes that Debra's proposal of designing a gradual application of rules that takes into
consideration current operators vs any future ones will meet your approval
Sincerely,