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Vancouver, B.C. (Flickr Photo / @vancityvisual)

Vancouver, B.C. has passed a set of stringent regulations in an attempt to curb the proliferation of Airbnbs and free up more long-term housing supply for residents, the New York Times reports.

The new regulations only allow hosts on sites like Airbnb and VRBO to rent out rooms in properties where they live. On-site basement suites and mother-in-laws are not allowed. The rules also prohibit businesses from operating short-term rentals through sites like Airbnb. Short-term rental operators will also be required to purchase an annual license for 49 Canadian dollars.

“While work remains to be done, and some families will be excluded from home sharing, we look forward to continuing to support the city through this new chapter of regulation,” an Airbnb spokesperson said of the new rules in Vancouver.

Vancouver passed the regulations just a few days after its sister city to the south, Seattle, approved a new tax on short-term rentals. In Seattle, Airbnb and VRBO hosts will have to pay $8-$14 per night that they rent out their property. The tax was unbundled from a broader set of regulations that will be voted on in the future.

Seattle and Vancouver face similar challenges; both cities are dealing with big spikes in housing costs and low housing inventory for residents. Champions of the regulations in both cities hope that they will encourage property owners to rent out units on a long-term basis when appropriate and reduce the number of Airbnbs that are operated like hotels.

Regulation is a threat that Airbnb is fighting on fronts all over the world. In New York, short-term rentals are banned outright unless a host is present. San Francisco requires short-term rental operators to obtain licenses and register with the city. Airbnb sued over the rules in both cities and later settled. Chicago governs Airbnb with a complex set of regulations that vary from neighborhood to neighborhood. Airbnb is also fighting regulatory battles in Amsterdam, Barcelona, and other cities around the world.

It’s a watershed moment for the gig economy darling, particularly with rumors of a public offering looming. Airbnb is worth an estimated $31 billion and reported a profit for the first time earlier this year. That makes the unicorn a prime candidate for an IPO but its still unclear how new regulations — like those Vancouver passed — will impact the company’s bottom line.

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