THE TOUGH THING ABOUT HAVING HOME-SHARING LAW
The emergence of new regulations has given rise to a new problem: ensuring compliance
OVER the last six months since I first wrote on the subject in this column (see “Regulating homesharing”, June 22), some interesting developments have taken place in other jurisdictions. Local authorities may want to study them when the need to have our own home-sharing law can no longer be avoided or postponed.
In Minneapolis, United States, its City Council had, in late October, approved a pair of ordinances to regulate short-term vacation rentals like Airbnb. Under the new laws, short-term rental hosts and services like Airbnb must obtain a licence from city authorities before they can do business. Property owners who wish to rent out their homes (called “hosts”) will have to pay US$46 (RM187.68) per year for the licence. They can avoid paying the rental fee (and need not apply for a licence) if they continue to live in their homes while their “guests” are visiting.
Property owners who live on the property, rent out their entire unit and leave the property during the rental period must obtain a licence and pay the annual fee. Owners of a non-occupied rental property who rent out the entire unit must obtain the licence.
Under another ordinance, hosting platforms like Airbnb are required to obtain a licence and pay US$5,000 for the annual licence. These new ordinances came into force on Dec 1.
In Canada, Toronto and Vancouver recently followed in the footsteps of other major municipalities around the world in regulating home-sharing activities on a short-term basis. A Vancouver city official said the regulation was intended to prevent the city’s scarce rental housing stock from being diverted to short-term rental platforms like Airbnb.
The emergence of these new regulations affecting home-sharing has given rise to a new problem: enforcing compliance. This has become apparent in Quebec, where, one year after its provincial law requiring short-term rental hosts to register with its municipal authority, very few Airbnb hosts had bothered to do so.
Airbnb’s approach to this issue is as follows. It maintains that it is just “a platform on which shortterm rental hosts list and manage their properties”, and that it is the duty of the “hosts” (who use the platform) to comply with local regulations.
In the US, some cities (such as Hermosa Beach and Ojai) have banned short-term vacation rentals (those less than 30 days). Other cities (like Los Angeles, Santa Monica and San Francisco) have legalised and regulated short-term rentals, but found that enforcing compliance has not been easy.
Under LA’s Home-Sharing Ordinance, the authorities have been empowered to penalise hosts and websites that violate the law. The law only allows hosts to rent out their primary residence, and for no more than 90 days a year. Hosts would have to register with the city, display a valid registration number on their advertisement and pay the city’s 14 per cent hotel tax.
The LA ordinance prohibits short-term rentals of second homes or investment properties, as well as apartments covered by the city’s rent stabilisation law. The objective of the law is to discourage property owners from turning long-term rentals into short-term rentals — an action that not only changes the character of a community, but also reduces the housing supply and causes the neighbourhoods to become less stable.
The downside of new laws like LA’s ordinance is that most home-sharing websites hide the identity of hosts and addresses of their property until the rental has been booked. This makes it difficult for authorities to identify and punish illicit listings. Airbnb and other home-sharing websites argue that they should not be held liable for the conduct of hosts who use their service, and that the government should not compel them to disclose hosts’ personal data.
In late October, Vancouver hosted a public hearing on its proposed bylaw for short-term rentals that would require hosts to hold a licence and only allow them to rent out their primary residence. There are more than 6,000 illegal short-term rentals in operation while housing affordability is at a crisis. City officials estimate that a substantial portion (20 to 30 per cent) of these rental units are not the host’s primary residence, which means they would not be permitted under the proposed regulation. The remaining 70 to 80 per cent of these units would be eligible for licensing. City officials said the proposed bylaw intended to legalise the industry and force units that should be part of the general housing supply back into the long-term market.
In Singapore, on Dec 5, two men were charged in court over their roles in providing unauthorised short-term stays to tenants. The two Airbnb hosts were the first to be charged over illegal home sharing under a new law that came into force last May. According to court documents, both men allegedly worked together to rent out four units at D’Leedon condominium in Farrer Road to others for a short term without permission from the Urban Redevelopment Authority (URA). Under Singapore law, it is illegal for people to rent out, sublet or share private homes with others for under six months. Following a 2015 public consultation by URA, the bar was lowered to three months for private homes.
In the United Kingdom, under a new law that came into force in March 2015, London residents can share their homes or any residential property they have for up to 90 days a year. Housing Minister Brandon Lewis said: “Previously, London homeowners looking to make a bit of extra money and rent out their homes faced nothing but bureaucracy and red tape… Anyone looking to rent out their London home for a short period can now do so without having to pay for a council permit.”
To sum up, there seems to be a general practise that home sharing in the form of short-term rentals is frowned upon by city authorities. In some jurisdictions, they are completely banned, while in others, they are regulated in the form of licensing and annual fees. The difficulty, in both cases, is enforcing compliance.