Owners of short-term rentals in Halifax's residential areas face new restrictions

Halifax's new rules for short-term rentals are now in full force, restricting how they can operate in residential neighbourhoods in the hopes of freeing up housing stock.

But the city's tactic of making different rules for various types of zoning is getting mixed reactions.

The vast majority of short-term rentals like Airbnbs in Halifax are entire homes, such as houses or apartments. 

According to the data analysis platform AirDNA, 1,937 listings out of the municipality's 2,418 active rentals as of Friday were for entire homes. The remaining 481 were private rooms.

As of Sept. 1, both entire-unit rentals and bedroom rentals are only allowed in residential zones if they're within the owner's primary residence. Renting out the whole home is allowed when the owner is away. Basement apartments or backyard suites must now be rented out for more than 28 days.

Short-term rentals are still allowed in commercial or mixed-use zones where most hotels are located.

Brendan Smith of Dartmouth lives in a residentially zoned triplex where he's the only long-term tenant between two Airbnbs. Those units will have to change under the new rules, "and that's going to be awesome," he said.

"Every unit we can get, we need right now," he said.

Although Smith and other members of the advocacy group Neighbours Speak Up hope to see the owner-occupied rule applied everywhere in Halifax, Smith said this is a good first step.

To owners concerned about losing money over the regulations, Smith said rules to limit Airbnbs and other vacation rentals have been steadily introduced in cities around the world. Owners knew changes were coming when Halifax council directed staff in 2020 to look at making specific bylaw changes.

Since Halifax real estate prices have gone up dramatically in the last few years, Smith said owners who feel they have to sell will likely make a profit. 

"I find it hard to believe that anybody will be put out by these regulations, and if they are, it's just because they didn't do their homework and that's kind of on them," Smith said.

Coun. Shawn Cleary voted against the rules, and said he's heard a lot of confusion from residents because of Halifax's patchwork of zoning. 

"You could have the same neighbourhood: one side of the street would allow it, the other side your neighbour could, you wouldn't," Cleary said.

Another concern of Cleary's has been the lack of accurate data. Although AirDNA can give a general area where rentals are, it can't pinpoint civic numbers so Cleary said it's unclear exactly how many listings are now illegal.

It could be that only 100 or 200 units convert back to long-term housing, Cleary said, which is a "drop in the bucket" compared to the thousands of units Halifax now needs each year to address the housing crisis and a growing population.

He said other approaches might be more successful in getting more units back into the regular rental market. Most other cities in Canada have taken a different tack, including only allowing rentals in primary residences, rather than investment properties, or limiting how many nights a year a rental can be offered. 

Cleary said the people most affected by the regulations are those with basement units, or a second-income property they use to help pay off their bills and mortgage.

"It's going to cause a lot of churn in the market. It's going to cause a lot of pain for people," Cleary said.

But realtor Tanya Colbo of Royal LePage said this movement could at least lead to people being able to rent in vibrant areas that have seen a high number of Airbnbs, like her own North End neighbourhood. 

So far, Colbo said, there hasn't been a rush of people selling their short-term rentals, although a handful of her clients took that step. In one case, a large Dartmouth home was renovated with plans for two Airbnbs — but the owner decided to sell in light of the new rules.

"The owners didn't want to be long-term landlords, they just didn't want the responsibility of it," Colbo said.

It appears some listings are already moving from Airbnb to become long-term offers.

Ten short-term rental listings examined by CBC shared the identical location, description and photos as long-term rental listings on Facebook Marketplace looking for tenants for eight-month or year-long leases.

Because the rules only apply to rentals 28 days or less, Airbnbs offering longer stays can remain in residential areas.

Avery Birch of the Sweet Digs property management company said that's exactly his team's plan.

They handle more than a 100 short-term rentals in the city, and Birch said there's plenty of demand from people wanting units for a month or more when they're moving to Halifax, or working on a contract.

"I think Halifax has taken a very balanced approach, I truly, truly do. It's going to appease both ends of the spectrum," Birch said.

"What the city is saying it wants to see with this new plan, is only going to continue creating density in the downtown core.… I think everyone feels a compromise, so I think that's a good compromise."

Data from provincial list coming

Whether the city can adequately enforce the new rules is another question, but a municipal spokesperson said Halifax is working on filling vacancies for bylaw officers in the compliance division.

All short-term rental owners now have to register with the province, and that data will eventually be shared with Halifax so staff will soon know where in the city they are located.

Anyone who rents short or long term will also have to register with Halifax by April 2024 for the city's new rental registry. As of Friday, the city said about 300 applications for that list had been received, with four of those being short-term rentals.

The new short-term regulations apply everywhere within the municipality, but rural areas have more flexible zoning so the city says short-term rentals can likely continue for now. Staff are examining whether rural regions will need a different approach.

Anyone with questions about the new rules, or who wants to file a complaint about a suspected illegal Airbnb, can call 311.