Sun Peaks Mountain Resort Municipality (SPMRM) created a tiered payment structure for short-term rental (STR) licence holders after a Dec. 19 council meeting.

The new licence structure developed by the municipality changes fees based on strata or residential and tourist-zoned property classification. SPMRM was set to increase the fees to higher rates until owners voiced concern at council on Dec. 5. Six residents sent letters detailing their arguments, ranging from a lack of consultation or advanced notice and discrepancies in business licence fee increases for other businesses, like hotels and restaurants.

Tiered fee system

Since the public backlash, council decided strata properties will pay $140 for a one-bedroom property, $210 for a two-bedroom, $280 for a three-bedroom strata and $350 for a four-bedroom strata.

The rationale behind differentiating rates comes from stratified subdivisions having built-in complaint processes, reducing the administrative burden on SPMRM for bylaw complaints. Under the previous licence fees, all STRs were charged the same permit fee plus a per-bedroom rate.

RS-1A zoned properties, zoned for tourist and residential accommodation and properties with a temporary use permit (TUP) within residentially zoned neighbourhoods have a different fee structure.

Studios to one-bedroom houses will pay $200 for their STR licence, two-bedroom homes $300 and properties with three bedrooms pay $400. Full houses renting the main living space and a basement suite will pay per bedroom. For example, a full-house rental with three bedrooms in the upper section of the home would pay $300 and an additional $200 for a two-bedroom basement suite.

Entire houses are charged two fees under the same business licence to encourage property owners to rent a basement suite to long-term tenants as Sun Peaks struggles with a housing crisis.

In response to a question from a property owner clarifying how SPMRM defines a long-term tenant, Nicky Jonson, director of corporate services, said a long-term tenant is defined as someone with a tenancy agreement, whether they are the tenant on a month-to-month basis or for a fixed term.

Sun PEaks short-term rental fees changed twice this year

STR rates for 2023 were $95 plus $25 per bedroom. However in June, council set flat rates to $275 for two bedrooms or less and $350 for units with more than three bedrooms.

Then on Nov. 10, council adopted the Business Licensing and Regulation Bylaw No. 0203, which increased fees on STRs with two bedrooms or less to $350 and $750 for properties with three bedrooms or more.

Rates for a three-bedroom property for 2023 holding a licence before the mid-year increase would cost $195. With the rise to $750, they faced an increase of more than 284 per cent.

Letters sent to council included one by Rod Sellers saying the municipality’s decision “betray[s] and erode[s] the trust” of voters. 

Another by Kathleen Hitchens noted a need for more consultation with owners and short notice for the fees. She and other letter writers also highlighted the inequity in business licence rates between STR operators and hotels and restaurant business licence fees.

Other people highlighted the difference in STR licence fees compared to other resort towns throughout B.C.

In response to comparisons between towns, Deanna Campbell, chief administrative officer, explained other municipalities are exploring increasing the fees they charge. 
There are 427 properties in Sun Peaks with licences to rent short-term. In terms of the cost of a permit compared with revenue, a vacation rental in Sun Peaks for one night alone brings in anywhere between $120 to more than $800 for people who rent the properties. This revenue may or may not include cleaning and maintenance fees.

Increase in licence fees to pay for additional bylaw enforcement

“There’s no question that the costs related to short-term rentals have grown,” Mayor Al Raine said, explaining policing parking issues and noise complaints requires hiring another bylaw officer.

Currently one bylaw officer works five days a week, and many calls come at night when an officer may not be on duty. Increasing staffing to cover seven days a week and nighttime response would require three staff at minimum, and with salary and training, the total comes to $344,610. 

“Not everybody’s making a fortune renting out rooms, but there’s certainly a revenue stream related to that,” Raine explained. “Council is of the opinion that the costs related to short-term rentals should be borne by those doing short-term rentals.”

The increased fees will also offset the cost of software to monitor STR advertisements. 

SPMRM purchased a monitoring software called Granicus this year, which scans the internet for advertised properties in Sun Peaks and ensures they match a property’s licence. The software will allow for stronger policing, and bylaw complaints will come into the program and then go to a bylaw officer, which allows for granular complaint data.

Council also chose to increase STR licence fees more than other businesses because their property tax classification differs, with businesses paying 2.75 times higher property taxes than residential owners.

Invoices for the fees are due by January 31, 2024.