Short-term rentals in Bluewater are estimated to have made more than $3.3 million since 2020, but the municipality’s new licensing system may have cooled the market.
A review of Bluewater’s short-term rental licensing system was presented during a Nov. 20 special council meeting where councillors learned how the municipality’s licensing bylaw has been operating since its introduction last year.
Bluewater introduced its short-term rental licensing system in 2023 after hearing resident concerns about the operation of rental properties in its communities, particularly during the busy tourism season in Bayfield and along the Lake Huron shoreline.
Under the bylaw, those looking to operate a short-term rental in Bluewater must pay a $750 licensing fee that covers a one-year licence. The bylaw also lays out set fines for offences and establishes a 15% limit on the number of short-term rental properties allowed on a single street.
According to the report presented to council, the revenue of short-term rentals is largely driven by popular listing site Airbnb, which represented more than $2.8 million in local revenues since 2020. Vrbo, another popular listing site, boasted area listings that made an estimated $525,000.
Though short-term rentals represent a multi-million dollar industry in Bluewater, the municipality has found there’s been a decline in revenues in the last year. Revenues grew substantially from 2020 to 2023, with the local short-term rental market raking in just shy of $900,000 in 2023 at its peak.
But that growth in revenue seems to have been stymied after the introduction of the municipality’s short-term rental licensing system, as short-term rentals are estimated to have brought in just more than $400,000 so far in 2024, with the busy summer tourism season already over.
The number of short-term rental properties fluctuates frequently since operators can choose to make their listings active or inactive throughout the year, but there were 221 unique active listings on Nov. 4. In June of this year, there were 242 active listings.
In 2024 so far, there have been 185 bylaw complaints in Bluewater, and Stewardson said there have been 64 bylaw complaints received regarding short-term rentals. Of those, 52 complaints were for operating without a licence, while four were noise complaints and three were driving complaints. Other less common complaints included parking issues, garbage on the beach, exceeding permitted occupancy, septic concerns and garbage at the road.
Bluewater has issued nine offence notices for operating without a licence, and each of those claims was challenged in court to varying levels of success.
Stewardson said the municipality has faced difficulties in court with enforcing the bylaw due to a lack of evidence in those cases, and dealing with those challenges in court has driven up the cost of the new system by about 35 per cent.
While responding to a question from Coun. Bill Whetstone, Stewardson said there is a trend of complaints being filed against the same properties, and most of those complaints were found to have been valid by the municipality.
Though short-term rental owners and operators have been pushing council to consider changes to the system that would reduce the costs for those following the bylaw in good faith, they have yet to move forward with any adjustments to the system, citing the need for more data.