No longer flying under the radar: Iqaluit licensing Airbnb rentals

Iqaluit city officials say it's mandatory for anyone renting out their home as if it's a hotel to have a business licence. 

The move comes after they discovered a growing number of homeowners were flying under its radar and hosting guests for short-term stays.

More than 25 people are currently advertising their places through online marketplace Airbnb as an alternative. That's because they are cheaper and more personal than staying at hotels in Iqaluit which can be booked solid during peak times of the year.

Currently, only two residents have gone through the lengthy and pricey process of obtaining a business license. The rest could face a $200 fine from by-law officers for breaking the rules.

If you run an Airbnb, you are running a business- Gabrielle Morrill, City of Iqaluit

Gabrielle Morrill, the city's economic development officer, says Airbnb is a new trend in Iqaluit and it's important for the city to track how many people are renting their homes using Airbnb.

"If you run an Airbnb, you are running a business," said Morrill. "You have a product and you are putting it on the market for sale. It's a valuable product. We appreciate that you're doing it. But it's a business. We need to have it consistent across the board."

"We don't want it to be viewed as an effort to punish anybody, we want to work with you."

Morrill says the data obtained through licensing will help her prove to other levels of government that Iqaluit is full of entrepreneurs so she can push for funding to help support them. 

'People were cancelling left and right'

Iqaluit resident and government worker Jason Briffett opened his doors to guests after witnessing the impact of Hotel Arctic closing its doors to travellers.

Last summer, new owners transformed the hotel into residences for Nunavut's Arctic College. Ever since, the Discovery – a boutique hotel – says it's almost always booked up.

Briffett witnessed the impact first hand when his co-workers from other parts of the country couldn't attend meetings in Iqaluit because there wasn't anywhere to stay, he says. He wanted to help the city fill that gap.

He posted his family's guest bedroom on Airbnb and ended up being swamped with seven requests from business travellers during the Nunavut Mining Symposium in April. 

"There was people reaching out to friends, people were cancelling left and right because there was just nowhere to say," he said. "That's not a good thing."

He had no idea he needed a business permit and says he'll get one if he has to. 

Hundreds of dollars to get permit 

Currently, the process of obtaining a business licence isn't easy.

Iqaluit resident Joanne Ashley spent two months and more than $500 following the city's rule book so she could rent out rooms in her home on Airbnb. 

It's a good chunk of change- Joanne Ashley, Airbnb Host

The process involved having a fire marshall and health inspector visit her home. Ashley was required to install two fire extinguishers, along with other recommendations. Then, she handed over $250 to the city for the business license itself.

"It's a good chunk of change initially," said Ashley. "I felt that was important so that I could tell any of my guests that I had a very safe home and it had been inspecting and I had a business licence, so they could feel more comfortable with my home."

The city of Iqaluit is currently in the process of revamping it's cumbersome process to apply for a business licence. 

City making process simpler, cheaper

By the fall, a simpler and "substantially" cheaper system is expected to be put in place.

Airbnb hosts will pay the lowest fee since it's considered a hobby that brings in some extra cash. Residents may also be able to apply online and get their inspections completed at a later date. 

Morrill says the city realized that Iqaluit is full of home businesses that aren't being reported because the process is too intimidating. 

For every thousand people in Canada there are about 32 businesses. In Nunavut, there are only 13 businesses per thousand residents, according to Statistic Canada's data from 2015.

That number's not actually reflective of the start-ups actually operating in the city, said Morrill. 

She's hoping the new process will encourage residents to get licenses and plans to launch an education campaign about the benefits. 

"If we can prove we have a large number of businesses per thousand residents, more than the rest of Canada, then we can prove that we do have a thriving entrepreneurial economy that should be better supported," said Morrill.