A somewhat controversial by-law governing local short-term rentals is set to be passed by North Bay City Council along with other user fees during Tuesday's regular meeting but the tale of its effectiveness will only be told once the regulations themselves are tested by user groups and municipal officials.
Short-term rentals are fairly new on the municipal radar and this is a piece of legislation and an issue that few politicians have much experience in dealing with. Several segments of the population expressed their thoughts on the issue — for and against — in public meetings. The apprehension in moving forward and the timing resulted in one council passing the baton to the next.
Short-term rentals are often brokered by companies such as Airbnb and VRBO that provide an online marketplace for accommodations meant for vacation rentals and tourism activities. The prevalence of these online hosting sites left municipalities with a desire to regulate the practice and recover service costs.
The City of North Bay has been pursuing the implementation of this short-term rental by-law for over one calendar year, spanning the terms of two councils and the goal was always to have something in place as soon as possible. The initial report and the proposed fee structure remain in play.
"There has been a lot of concern from the industry with respect to the ongoing hike of necessary fees," said Coun. Mark King, who sat on both councils that dealt with this file, during the Jan. 17 regular meeting.
The fee structure had been subjected to a motion of reconsideration upon the change of councils but King decided an overhaul of the proposed fee structure was not an avenue he would pursue at this time.
The STR user fees call for a $600 application fee and a $275 application renewal fee for hosts. These fees include tasks that are defined for the average application, including receipt of application, review, processing, inspections, notices, orders, monitoring, communications, and inspections.
The appeal fee is $1,600. And, a stand-by fee will be calculated at the rate of $78 times the number of hours on stand-by. This fee is intended to be charged for the actual time spent in organizing, documenting and supervising work outside of the standard fees.
"The benchmarking of this by-law was conducted with the framework of local communities and municipalities of similar sizes to North Bay, when applicable," according to the staff report. For a comparative table of applicable fees, click here.
"It is my thought process, given the industry's understanding, that the fee structure may create a situation where there is non-compliance," King added during the most recent meeting. "That was my main concern and having a structured fee system isn't available at this particular point so I'll move on."
The short-term rental by-law, Mayor Peter Chirico reminded council, can be revisited in one year's time when adjustments can be made relying on the data collected.
Coun. Sara Inch agreed with the cost recovery premise presented by staff. "It may seem like it's expensive, $600 per year for initial registration, however, if you look at the time involved, they are getting a listing, they are getting an inspection, I think it's appropriate."
"To offset the cost of providing services, municipalities have the authority under Section 391(1) of the Municipal Act to impose a fee or charge on individuals," per the staff report. The City "performed a costing analysis to determine the full cost of providing and upholding the by-law. The full cost recovery rates were then used as a benchmark against which new fees were established."