Introduction

In a significant move aimed at regulating short-term rentals (STRs), Calgary city council has approved new rules that may reshape the local rental landscape. These regulations, set to take effect in the spring of 2025, have sparked both support and backlash from various stakeholders.

New Licensing Fees

The city has proposed increased licensing fees: owners of primary residences will pay $172, while those renting out non-primary residences will see fees soar to $510—with renewal costs set at $260. This financial adjustment could discourage multiple property owners from entering the short-term rental market, particularly in times of low vacancy rates.

Temporary License Freeze

A crucial element of these new regulations is the introduction of a temporary freeze on approving new STR licenses if the long-term rental vacancy rate drops below 2.5%. This measure aims to preserve the availability of affordable housing amidst Calgary's growing demand for both long-term and short-term accommodations.

Council’s Balance

Councillor Jasmine Mian emphasized the council's intention to strike a balance between fostering the short-term rental market and safeguarding community housing needs. "We recognize the value and utility of short-term rentals," Mian stated. "We want them to continue, but we also want to ensure that they do not exacerbate our housing crisis."

Criticism from Industry

However, not everyone is on board with the new regulations. Alex Howell, Airbnb’s policy lead for Canada, criticized the council's decision, claiming it could negatively impact Calgary’s economy without effectively addressing housing issues. In her view, the council’s actions could hinder the city's ability to attract significant events, which rely on the availability of both hotels and short-term rentals for accommodation.

Market Dynamics

Interestingly, a report cited by Howell indicates that a small percentage of hosts—only 11%—account for nearly 41% of all STR listings. This highlights the potential influence of a handful of multi-listing operators on the overall rental market, thus raising the stakes for future discussions on STR regulation.

Growth of STR Market

Moreover, the STR market in Calgary has seen remarkable growth, with revenue soaring from a mere $1 million in January 2017 to an astounding $22 million by July 2023. This surge underlines the economic impact of short-term rentals, which Howell claims support over 10,000 jobs in the province, generating substantial spending in local restaurants, retailers, and other tourism-related sectors.

Conclusion

As the community braces for these changes, the effectiveness and repercussions of the new regulations will be in the limelight, potentially influencing other cities grappling with similar housing dilemmas. Will these measures strike the right balance, or will they be seen as a stumbling block for Calgary’s economy? Stay tuned as the story unfolds!