Calgary city council will consider proposed changes to the way short-term rentals are regulated, in an attempt to stave off some of the problems seen in other Canadian jurisdictions.
The proposals include a moratorium on licensing some new properties when the vacancy rate drops below 2.5 per cent.
City administration put forward several proposed changes at Thursday’s executive committee meeting.
A briefing note said that, while short-term rentals are not a significant issue at this time, “administration recommends adopting some proactive measures to ensure short-term rentals do not become a concern in the future.”
The proposals follow a University of Calgary study on short-term rentals commissioned by the city.
That report found the number and economic value of short-term rentals has grown significantly since 2017 but still represents only a small fraction of total rentals in the city.
In September 2023, there were 4,950 active listings for short-term rentals in Calgary, a number that represents less than one per cent of the total number of residential properties.
Gillian Petit, a senior research associate with the University of Calgary’s economics department and one of the report’s authors, told CBC News that number is still much too low to have an impact on housing affordability.
“If the city hypothetically were to go out and completely ban short-term rentals, of those 5,000 listings, maybe a maximum of 400 might be returned to the rental market,” said Petit.
“Given what the city needs to build to address the affordability issue, it’s a dime in the bucket.”
The report describes Calgary’s short-term rental market as a seasonal one that peaks over the summer during Stampede. Most rentals are not permanent, the study said, and there is no statistically significant correlation between the increase in the number of short-term rentals and the cost of long-term rentals.
The recommendations proposed Thursday include the introduction of a moratorium on new non-primary residence licences when the city’s rental vacancy rate is below 2.5 per cent, extending the definition of short-term rentals to 180 days, the introduction of licensing for short-term rental platforms, and a restriction on short-term rentals in affordable housing developments.
A ‘nuanced approach’
Ward 3 Coun. Jasmine Mian said the city was spurred to study short-term rentals after concerns were raised by the hotel industry about competitive fairness. While the number of listings is still low, there has been concern expressed by residents that the number could start to spiral out of control — especially with outside investors.
She describes the proposed changes as a “nuanced approach,” which responds to constituent concerns about short-term rentals without over-regulating them.
“I’m really happy with where this landed,” Mian said.
As far as the moratorium on new licences is concerned, Mian points out it would not apply to Calgarians who are renting out part of their home.
“If you want to use your residence that way and you follow the rules, you can do it,” she said at Thursday’s executive committee meeting.
“But what it is meant to do is to dissuade people that do live in different provinces from purchasing Calgary real estate with the explicit intention of just putting it on the market here, when they could be providing it for the long term when we have such a low vacancy rate.”
Petit said that, currently, there is no comparison between the situation in Calgary and the situation in places like Toronto and Vancouver, where the short-term rental markets are very large and municipalities have brought in restrictive regulations.
“They are magnitudes bigger than Calgary, so they have problems,” she said.
She agrees with Mian that these proposals suit the situation.
“I think they strike a nice balance … between where we are with housing affordability and the state of the short-term market right now,” she said.
But Duncan Haldane disagrees. He is the CEO of Your Key Management, Calgary’s largest short-term rental management company.
Haldane says, given the negligible impact short-term rentals have on the overall market, restricting new listings is an overreaction, particularly with the vacancy rate now sitting below the 2.5 per cent threshold.
He and his staff manage about 100 short-term rental properties. He describes the restrictions on new licences as “grim,” and something that may force him to reduce his workforce by as much as 50 per cent.
“We rely on new licences. We rely on new properties coming in,” said Haldane.
“When you don’t have that growth coming in, you don’t necessarily need the same amount of people.”
The proposals will go before city council on Dec. 17.