Calgary’s Short-Term Rental Study: Recommendations for Future Regulatory Frameworks

Calgary’s short-term rental (STR) market has grown steadily over the years, so the City has initiated a two-year study, conducted by the University of Calgary, to assess the regulation of this key market and gain input on it. The study aimed to learn more about this market and how it impacts housing, neighbourhoods, and the city’s economy. The findings, which included input from surveys and public consultations, will be used to guide potential updates to Calgary’s short-term rental regulations. 

Calgary’s STR market, which includes platforms like Airbnb and VRBO, has been steadily expanding since 2017. As of September 2023, there were about 5,000 active listings, making up less than 1% of the city’s roughly 540,000 residential properties. Most listings are concentrated in the Centre City and developing neighbourhoods, with demand peaking during the Calgary Stampede each July. While Calgary isn’t considered a year-round tourist hotspot, STRs are used for a wide variety of purposes, including housing for people transitioning between homes, visiting for medical reasons, or working in the city temporarily. This diverse demand adds to the appeal of STRs as an investment option. 

General Perception of STRs

The public’s opinions on STRs are mixed. Some participants in the engagement process expressed concerns about nuisances like noise, disruption, and the impact on neighbourhood character. Others pointed to broader issues like housing affordability, suggesting STRs could be limiting the availability of long-term rental units. Meanwhile, supporters emphasized the benefits STRs bring, such as filling gaps in accommodation options, boosting tourism, and providing income for property owners.

It was also noted that STRs are not solely limited to tourism but also serve other key needs, such as medical travel, relocation, and temporary housing. Host-occupied STRs or those with high operational standards are generally viewed more favourably by the public.

Public feedback emphasized that better licensing and regulation could help address concerns while still allowing STRs to benefit Calgary’s economy. Suggestions included treating STRs more like hotels by applying similar taxes and fees and enforcing stricter accountability for absentee owners.

Suggested Regulatory Changes From the Study

The study collected a range of opinions on potential changes to Calgary’s STR regulations, reflecting the needs of investors, renters, and the broader community.

Expanding the Definition of STRs

One suggestion is to broaden the definition of STRs to include properties rented for longer than 30 days, which are currently outside the city’s regulations. Supporters believe this would create a fairer system, ensuring all types of temporary rentals are licensed and monitored. On the other hand, some investors worry this could increase costs and compliance requirements for properties that operate on flexible rental models.

Restricting STRs in Affordable Housing

Many participants supported a ban on STRs in affordable housing units. They argued that affordable housing should remain available to those who need it most and not be diverted to the STR market. This change could limit opportunities for investors targeting lower-cost properties, but it’s seen by many as a necessary step to protect housing availability for vulnerable residents.

Adjusting Licensing Fees

Another idea proposed is to adjust business licensing fees based on whether the property owner lives in Calgary, suggesting that local property owners might pay lower fees than non-resident investors. While this approach could encourage local investment and level the playing field, detractors note it might also discourage out-of-town investors who are already contributing to Calgary’s economy.

Licensing STR Platforms

Survey responses also suggested requiring STR platforms like Airbnb to obtain business licenses and pay fees. Supporters argue that these platforms should share the responsibility of contributing to city costs, much like hotels do. While this could increase transparency and accountability, it might also lead to higher costs for both hosts and guests if platforms pass on the fees.

Balancing Housing Affordability and Investment Opportunities

One of the most debated issues from the study is how to address housing affordability while maintaining the economic benefits STRs bring. Some participants felt that STRs contribute to rising home prices and tighter rental markets, while others pointed out that STRs make up a very small portion of Calgary’s housing stock and are not the primary cause of these problems. 

Proposals like limiting the number of STR licenses based on long-term rental vacancy rates or introducing neighbourhood-specific caps are being considered. If these proposals are considered, this could lead to potential restrictions that might reduce the availability of new STR licenses or limit operations in certain areas.

Investors should stay up to date on potential regulatory changes as a result of this study.

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