We are a group of concerned neighbours in Halifax's North End speaking up about the impact short-term rentals are having in our community.
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You have probably stayed in an Airbnb or similar short-term rental property but have you ever lived next to one? In 2019 our neighbourhood, in the Hydrostone area of Halifax, had that experience. It led us to realize the real impact short-term rentals can have on neighbourhood life and sustainability and the supply of good affordable housing.
At that time one of our long-time neighbours passed away. Eventually, her property was sold and extensively renovated by the new owner. He indicated he loved the neighbourhood and intended to rent the property once the repairs were complete. We looked forward to a new neighbour. Unfortunately, a few months later, he told us he intended to rent the property on a short-term basis through Airbnb but would not live in the property.
This was not good news for our street and neighbourhood. Many of the neighbours own their own properties or rent long-term. The housing is mainly garden home row housing that dates back one hundred years. It is a very supportive and co-operative neighbourhood where faces are familiar and people stay in touch regarding local social events, open houses, sales and street picnics. It has been a safe and attractive place for families to live. It is designated as an Historic site and was deemed one of Canada's “best neighbourhoods” by the American Planners Association. Presumably, that was an attraction for the new property owner to operate a short-term rental. However, you can't sustain a neighbourhood with only visitors.
Our experience with the operation of the Airbnb rental was chaotic. A steady stream of renters created havoc for the adjacent properties. There were a number of disturbances with people coming and going at all hours, parties, fighting and enough noise and disruption to involve the police on three occasions, including an arrest. As one neighbour said, “It's exhausting”. Since then there were a number of short-term rentals that started up in streets near to our neighbourhood and around the city. Other communities across the country and internationally have experienced similar challenges. You can read about them in the News section on our web site and in our Update reports.
As much as we were disturbed by the disruption around us there were more fundamental issues at stake with short-term rentals in a residential neighbourhood. Residents lose supportive neighbours and instead get a revolving door of strangers that have no commitment nor responsibility to the neighbourhood. In addition, short-term rentals, where there is no primary resident, threaten the sustainability of our neighbourhoods. Because of the revenue potential of short-term rentals, other properties become vulnerable for purchase and similar use, eventually hollowing out a neighbourhood. Moreover, we lose good long-term housing. The use of neighbourhood properties for short-term rentals, particularly by owners who do not reside in the property, rob our communities of the supply of good affordable housing for rent and purchase. These kinds of properties are essentially 'ghost hotels' where the neighbours end up managing all the problems. It is the neighbourhood or building residents who must call the property owners, HRM enforcement and the police to deal with issues.
In opposition to this situation a group of nearby neighbours met to deal with the situation. We were fortunate to have some neighbours who were familiar with research and public policy and began to look for information and any regulation that might help. We soon found that our problem was beginning to be a national and international problem and that there was no regulation in place to address the issues. We began our advocacy work with municipal and provincial governments. We established our website and reached out to other residents around the city and province to come forward with their concerns. We heard from well over one hundred residents who had similar concerns and made their views known to government. We connected with others across the country who were also working for legislation in this area, such as Fairbnb in Toronto which works with many similar community organizations. We assisted in the sponsorship of a visit and public meeting with Professor David Wachsmuth of McGill University who had done a study on Short-term Rentals in Halifax, which you can see under our Events page on the website. We urged others to take action and contact local and provincial government representatives. We developed information resources and tools, available on our website, to assist in those efforts. You can see our most recent suggestions and contact information at the Take Action section of this website. Advocacy for regulation at both the provincial and municipal government levels has continued through 2023 and into 2024.
The Long Road to Short-term Rental Regulation :
As both public and political representatives began to learn more about the impact of short-term rentals and policy options that might address the situation, we began to see both provincial and HRM officials and councillors move toward regulation.
Here is a brief summary of those public policy actions and the main provisions and benefits to our objectives. All legislation mentioned is located on the Legislation page of this website.
A. The Tourist Accommodation Registration Act 2019 and the Assessment Act (amended) 2019 and Regulations 2020:
A key issue with short-term rentals was the fact that they were anonymous. Unlike most tourist accommodation there was no registration process. As such, from a tourist accommodation management, taxation, regulation and enforcement perspective for public and consumers, there was no identifying information for accountability. This was a concern for residents and for the traditional tourist accommodation businesses who sought a “level playing field” through registration and taxation of these businesses like other tourist accommodation.
On April 1, 2020, the provincial government implemented the Tourist Accommodation Registration Act and Regulations. (You can see this Act and Regulations on our Legislation page.)
The Act requires all property owners who operated a short-term rental business to register with the Province. However, those who operate a short-term rental from their home or apartment (what we call 'primary residents') were not required to register. We were not in agreement with this latter aspect as it would make it easier for short-term operators to avoid registration by claiming they were ‘primary residents’ and we would be back where we started. We had recommended that all STRs be registered and that registration numbers be put on advertisements on platforms like Airbnb. That way, everyone could see that a property had a number for follow-up, where needed. We had also recommended that short-term rentals, where there is no primary resident be taxed as a Commercial Property which would discourage them from operating in residential areas and buildings. The province did not follow those recommendations and instead, under the Assessment Act, 2019, and subsequent 2020 Regulations, allowed short-term rentals with four or fewer rooms for rent to retain their 'residential' property tax status which is one-quarter of the commercial rate.
Key benefit for Regulation: The registration process was now initiated so that the province and municipalities would begin to gather information on the identity, location, revenue and housing impact of short-term rental operators, a first step in accountability and treating short-term rentals as a tourist accommodation business.
B. Halifax Regional Municipality Study, Survey, Report and Recommendations on Short-term Rentals 2019 - September 22, 2020:
In May 2019 The Community Planning and Economic Development Committee of HRM directed staff to study the STR situation and provide recommendations on a policy for short-term rentals. were tasked with making recommendations on short-term rentals. They conducted a wide survey of the community, receiving more than 3800 responses. Most respondents wanted to see regulations to protect housing and neighbourhoods, limit commercial operation in residential areas, set fair taxation and minimum standards, while gathering information on STR use, location, and ownership. Following consultations with stakeholders as well as consulting other jurisdictions in Canada and research on the topic, staff presented their report and recommendations. Their recommendations, in brief, were as follows:
1. All short-term rentals are required to register so that type of STR would not become an issue for enforcement and would give a complete picture of the scope of the business. This registry work would be done in liaison with the Province.
2. Commercial style short-term rentals, those where there is not a primary resident, would be permitted in zones that permitted other tourist accommodation such as hotels, etc. This was a provision that spoke to tourism needs and present bylaws concerning tourist accommodation zoning.
3. Only short-term rentals with a Primary Resident (a resident who lived in the property most of the year) would be permitted in residential zones. This meant ‘commercial’ style STRs, where there is no primary resident, would be prohibited in residential areas thereby increasing the potential of retaining long-term housing and encouraging more responsible management of STRs in those zones.
4. Rural areas of HRM would be studied further and possibly allow STRS that are cottages and investment properties, again a recognition of tourism goals and traditional uses of such properties.
On September 30, 2020, HRM Council approved the staff recommendation to bring in regulations. Staff were to develop regulations, consult further and arrange for a public meeting to consider recommendations. (That would not occur until December 13-14, 2022 - see below).
Key Benefits for Regulation: Confirmation that short-term rental growth and regulation was a priority for many citizens; the recognition that without ‘all’ being registered, enforcement would be compromised; the emphasis on the impact of ‘commercial’ short-term rentals in residential areas and buildings and only permitting ‘primary resident’ STRs in residential zones; the potential link with the provincial registration process which was soon to begin.
Note: Progress on policy development and implementation was limited by the impact of Covid protocols and political changes at HRM and the Province. On October 17/20 a new HRM Council was elected with 6 new councillors. On August 17, 2021 a Conservative government was elected replacing the previous Liberal government. However, provincial registration of short-term rentals had begun and numbers posted on the Nova Scotia Open Portal, confirming the high numbers in HRM and around the Province.
C. New Provincial Government Commits to Action on Short-term Rentals: In October, 2021, the Minister of Municipal Affairs and Housing introduced a policy document on housing and homelessness. This plan noted that:
“Short-term rentals are increasing across Nova Scotia. Clarity is needed around this growing industry, and we need to ensure it does not negatively impact affordable housing. Government will consult with stakeholders over the fall and winter, with the goal of introducing legislation in the spring of 2022.” p.4 - A Healthy Nova Scotia: Solutions for Housing and Homelessness, 2021.
Key Benefits for Regulation: The assurance that short-term rentals were on the agenda for the new government and that further legislation would be forthcoming.
D. April 22, 2022 Amendment to the Tourist Accommodation Registration Act, Bill 154 and accompanying Regulations, November 15, 2022:
As indicated in October, 2021, the provincial government did bring in an amendment to the Tourist Accommodation Registration Act that both strengthened the registration process and opened up regulation to all municipalities in Nova Scotia. Through the Act and Regulations ‘all’ short-term rentals would be required to register, including ‘primary residents’. This mirrored the HRM approach. Second, applicants for short-term rental registration would be required to show compliance with municipal Land Use Bylaws. This provided a direct link with municipalities to determine if short-term rentals should be restricted in their areas. As a further element of the registration process, all short-term rentals would be required to post their registration numbers on the advertising platforms, such as Airbnb. When operational, this would provide initial confirmation that a short-term rental registration had been reviewed and met requirements, including Land Use Bylaws.
Key Benefits for Regulation: Requiring ‘all’ STRs to register and post their registration numbers should make tracking and enforcement easier. By involving municipalities in the registration process at the front end and ensuring that an STR is legally located could forestall complaints and enforcement action once it had become established. In general, by having widespread registration, both the province and municipalities would have access to data to see where STRs are located and the kind of impact they may have on housing availability and cost, tourism and other government services and plans.
E. December 14, 2022: HRM Debates Staff Report and Recommendations on Short-term Rentals Defers Decision. February 22, 2023: HRM Holds Public Meeting, Approves Recommendations, Delays Implementation to September 1, 2023.
Given the Covid situation, elections, and the continuing challenges of the housing crisis, it had been two years since the HRM staff report and recommendations had been approved by Council. Since then, further study had been done and another survey carried out. As in 2020, there was a large public response with over 4000 surveys submitted online and similar recommendations made to implement regulations to protect housing, neighbourhoods and treat short-term rentals, particularly those without a ‘primary resident’ as a business. In their December 1, 2022, Report staff recommendations followed the earlier report but also included the short-term rental of rooms in a residence, similar to traditional bed and breakfast establishments and rooming/boarding situations. The basic recommendations for short-term rentals included two provisions:
1. Only short-term rentals that were operated by a primary resident would be permitted in residential zones.
2. Short-term rentals, of any type, including those without a ‘primary resident’ would be permitted in
Staff indicated that commercial zones would be open for short-term rentals because those zones permit other types of tourist accommodation such as hotels and motels. It was also a recognition of the position of some in the tourism sector who saw the need for this type of tourist accommodation if HRM wanted to attract more tourist business.
Council was divided as to whether there was sufficient data to proceed, questioning whether housing was being lost or under threat by short-term rentals. The decision was made to defer and seek more information on the impact of STRs on residential areas and tourism. However, on February 22, 2023, a Public Hearing was held with several presentations by STR operators as well as regulation advocates, such as Neighbours Speak Up. Council was reminded by staff that until there is more data from registration information it was necessary to rely on statistics that had been gathered from STR Market Analysis Firm, AirDNA, which detailed locations of STRs throughout the region. It was also noted that HRM would be completing a Registry of all rental properties in 2023/24 which would provide more data. After much debate, Council decided in favour of the recommendations but delayed implementation to September 1, 2023, to allow time for operators to adjust to introduction of regulation.
Key Benefits for Regulation: Residential zones of HRM will be restricted to STRs operated by primary residents only. HRM will be working with the Province to review applications for short-term rentals and may be able to prevent the start-up of STRs in residential zones. The Rental Registry project by HRM may also add to the information available on the scope of STR operation in the region. On October 1, 2023, HRM also began charging a 3% Marketing Levy on every STR rental unit. That may help to further identify STRs and provide a disincentive to operate. Council and staff now have the tools to implement regulation of short-term rentals in cooperation with the Province.
Note: Hopefully, the data from the Province and HRM will indicate the loss of housing due to short-term rentals in the Mixed/Commercial zones in HRM and we will see a change in policy in that regard as both levels of government look for housing opportunities.
F. November 9/23: Nova Scotia Proclaims The Short-term Rental Registration Act:
A further amendment was made to the Tourist Accommodation Registration Act. It will now be the Short-term Rental Registration Act and responsibility will be moved to the department of Municipal Affairs and Housing. In addition, the Act strengthens the enforcement aspect as higher fees will be put in place for registration as well as increased fines for failing to register and other violations of the Act. The Regulations, which have not yet been finalized, will detail aspects of fees and fines. The Act also leaves room to broaden the definition of a short-term rentals which has been “28 days or less”. Some operators have attempted to work around that number and now the government will have the flexibility to address that issue. In addition, the government notes there will be resources for inspectors to enforce the Act and authority to allow investigations and the issuance of orders by designated staff.
Key Benefits for Regulation: In announcing the Act the Minister made clear that STRs have an impact on housing and they will act to avert that trend as all levels of government look to increase housing options. The previous department had many responsibilities, including tourism, which no doubt made it difficult to deal with the housing issues that came with STRs. Municipal Affairs and Housing is better placed to take on this responsibility as they are charged with increasing housing potential. Moreover, they have responsibility for the Assessment Act which could be used to address the tax status of short-term rentals. We also are encouraged to see the emphasis on enforcement resourcing in the Act.
Where to Next?
2024 will be a key year for action on short-term rentals. We expect the province will introduce the Regulations to accompany the new Act shortly and we will watch those closely. We will also be watching how HRM and the Province work together to identify short-term rentals that may not be in compliance with Land Use and other regulations. We understand that ‘information sharing agreements’ are being developed. Both levels of government now have the potential to locate all short-term rentals and assess whether they are impacting housing. We will be seeking reports on that work.
The Province has given the authority for all municipalities to develop their own Land Use Bylaws to determine the proper use and location of STRs in their communities. Will other municipalities take action on this? Will we see an impact on housing in the mixed/commercial zones in HRM and a review of that policy? We also will be looking for the Federal government to assist. In the Fall Budget Update Finance Minister Freeland indicated there would be resourcing for enforcement for short-term rentals. We will keep you posted.