Napanee Council discusses pros and cons of licensing short-term accommodations

Greater Napanee Town Hall, a National Historic Site of Canada, located at 126 John Street (1 Market Square) in downtown Napanee. Photo by Michelle Dorey Forestell.

Napanee is a bit like the old Trooper song: people tend to visit for a good time, not a long time. As such, short-term accommodations (STAs) were back on the agenda at the regular meeting of the Council of the Town of Greater Napanee on Tuesday, May 28, 2024. 

In April, Council directed Town staff to continue investigating and consulting with the community regarding a potential STA licensing bylaw and to report back with options and detailed information regarding a potential licensing framework, including revenue and expense forecasting, as well as alternative enforcement options for specific issues. Accordingly, Town Clerk Jessica Walters presented an interim update to respond to some of those questions and suggestions.

First, the report notes that Town staff consulted with legal counsel to determine the Town’s legal obligations regarding the licensing and inspection of STAs. They were advised that the Town has a statutory obligation to enforce the Building and Fire Codes. These codes prescribe mandatory inspections at various stages of construction and require the Town to investigate valid complaints regarding safety hazards or code violations. Importantly, those codes do not distinguish STAs from other residential use, nor do they require ongoing inspections once an occupancy permit has been issued.

Regarding a question of private road condition and maintenance, staff reported that the Town has no legal obligation or jurisdiction to become involved in disputes between private property owners about private road maintenance. If the Town were to license STAs, it could require a condition of the license stating that the operator must ensure the STA is accessible to emergency vehicles, but it would be “overreaching to prescribe the details” about how access is provided. 

Based on the above information, the report notes that the “staff recommendation would be that for the time being, residents and visitors with concerns about building safety should be directed to the building and/or fire department who will investigate legitimate concerns of code or by-law violations.”

Staff also asked the legal counsel to determine the Town’s liability exposure related to several items raised during the April 9, 2024, Council discussion. 

“We were advised that, as long as the Town performs the required inspections for issued permits and responds to any valid complaint or reported safety concern, the Town would not have a higher liability risk for not implementing an STA by-law, as this is not a legislated responsibility,” notes the report.

The clerk reported that, if the Town decided to license STAs but lacked the resources to enforce the bylaw, it might not create a higher degree of liability than not having a bylaw, but it would likely create frustration for both operators and complainants.

On the other hand, legal counsel pointed out that creating an “opt-in inspection” program would potentially expose the Town to extra liability. For example, if the Town failed to perform a requested inspection (or performed an inadequate inspection) and the building suffered a structural collapse or fire, the property owner and renters would have a stronger basis for a claim against the Town.

Based on this information, the staff report recommends that a partial system with voluntary inspections should not be pursued.

What comparable municipalities are doing

To better understand the STA licensing rate among comparable municipalities, staff scanned all Ontario municipalities with a population between 10,000 and 26,000 and assessed their approach to STAs. They found that two-thirds of these municipalities did not license STAs. 

News articles about council decisions in these other municipalities highlighted enforcement costs as the primary reason not to license. The staff report says many also spoke to a desire to see a provincial solution to regulation rather than patchwork local approaches.

Lastly, staff note that the environment in which STAs operate has changed since the conversation around licensing first started. Many of the concerns related to safety and overcrowding that arose during the height of the COVID-19 pandemic in 2020 have eased as travel outside of the province opened back up. 

They also found that some communities that initially banned STAs are reconsidering their stance based on observing the tourism value that STAs bring to neighbouring communities.

The staff report found that the STA debate now hinges on the impact of STAs on housing market affordability, with studies indicating variously that STAs are or are not a factor in driving up housing costs and long-term rental scarcity. A Desjardins report from 2023 showed that STAs, and Airbnb specifically, did contribute to the housing affordability crisis. Yet a Conference Board of Canada report from the same time period found that Airbnb did not have a meaningful impact. 

Alternatives to licensing

The staff report provided some options as alternatives to, or in addition to, licensing STAs.

For example, Council could add an administration fee to the Fees & Charges By-law for bylaw enforcement services. This, staff said, in addition to any enforcement orders or fines, would allow the Town to charge a cost-recovery-based fee to properties where officers are required to attend multiple times due to repeat violations of the same bylaw. 

This could encourage operators of STAs to address renter conduct proactively. This approach would also apply to all bylaw violations, not just activities at STA rental properties.

Other options suggested investing in more public education efforts regarding Town bylaws affecting STAs, doing project-specific or seasonal enforcement blitzes, or creating a licensing bylaw that would apply to all businesses rather than just short-term accommodations.

According to the report, the net costs of a licensing system will vary depending on Council’s priorities. The report emphasizes that there is no single STA licensing bylaw that can be lifted from one municipality and adopted by every other municipality, as each community responds to different pressures and tries to achieve different goals.

Mayor Terry Richardson started off the discussion by saying, “I think we’re on the right track… I think we need to continue down the path we’ve started with respect to trying to regulate. We’re not going to eliminate or eradicate short-term accommodations, but I think it’s important that we try to regulate those types of businesses within our community. I know [I’ve heard] out there that there’s hope that maybe upper-level governments will take this challenge on for us, but I’m not seeing anything in the near future for that happening.” 

Councillor Angela Hicks said she found it interesting that “once the licensing system is implemented, the demands on the enforcement will go up. And are the licensing fees going to cover the cost of additional enforcement officers? I think that’s something we have to keep in mind moving forward.”

Richardson confirmed that there are additional bylaw officers hired for the tourist season: “ We do have a contract. I think it’s 24 hours a week, if I’m not mistaken… We do have supplemental law enforcement.”

However, he noted that “there’s a number of ways of dealing with noise” other than through bylaw, including the Ontario Provincial Police (OPP), which might choose to deal with enforcement in various ways.

“They’ve got a lot of tools in their toolbox to deal with the noise complaint: the Criminal Code of Canada or a lot of other statutes… We exchange information with the OPP and our bylaw personnel on a regular basis,” he said. 

Hicks asked about how people with complaints would then proceed with seeking out enforcement. Walters responded that, “while the bylaw is in the development process,” they could work on educating the public.

“Most municipalities that have successfully implemented these have at least a six-month window between when the bylaw is finalized and when it comes into effect, to give more time for that education piece,” she explained.

Walters also pointed out that most STA companies like Airbnb have a reporting hotline of their own: “So we’d encourage people to do that… For the time being, if anybody ever does have a safety concern about building code compliance, fire code compliance, any other compliance issue, we can absolutely still take action on those if they are reported to us. Nobody needs to wait for an Airbnb-specific licensing bylaw to address those issues.”

Hicks commented, “ I think the sooner that’s out there, the better, and it would certainly alleviate some of the discussions of the non-STA property owners. And that goes along with the public education efforts.”

Councillor Mike Schenk then spoke up with a tone of frustration.

“I understand that, but it goes both ways. I’ve had experience in the past dealing with a short-term accommodation that was quiet, but the [non-STA] neighbour didn’t like it because there were so many strangers there and would complain. They made numerous complaints on different individuals, and they weren’t validated. There was no validity behind it,” said Schenk.

“So when you’re drafting something, if somebody is not living in his residence for a month, and he rents it out as a short-term accommodation, and the neighbour just spites them to spite him — this is the world that we live in today. I just want to be fair on both sides.”

Richardson agreed, “That’s the whole concept, I think.”

After receiving the STA update report, Council passed a motion for staff to bring forward a draft licensing bylaw based on the priorities of promoting the health and safety of STAs, minimizing barriers to licensing for small operators, creating a framework that supports short-term rentals as a residential use, and investing in public education efforts regarding town bylaws that affect short-term accommodations.

Meetings of the Council of the Town of Greater Napanee can be viewed virtually (or watched afterwards) on the Napanee Town Council YouTube channel or attended in person in Council Chambers at Napanee Town Hall, 124 John Street. Further information about Council meetings, including agendas and reports, is available on the Town’s CivicWeb portal.

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