Airbnb Not Banned in Banff, But Most Short-Term Rentals Not Allowed In Homes

Airbnb is not banned in Banff, but most short-term rentals in residential areas are not permitted under the town’s rules.

The distinction has come into focus after one of our recent stories highlighted a Banff vacation rental ranked among the world’s best on VRBO, prompting questions about how such listings can exist if short-term rentals are believed to be prohibited.

Under current rules set by the Town of Banff and approved by Parks Canada, short-term rentals are regulated through land-use bylaws, which set rules for how properties can be used, rather than by banning specific platforms. That means services like Airbnb and VRBO can still be used, but only for properties that meet local rules.

For most residential properties, that effectively rules out renting an entire home or unit to short-term visitors without the owner living on-site. Investor-owned or absentee-run vacation rentals are generally not permitted under current rules.

Town regulations state that offering short-term rentals in a residential property is primarily allowed through a narrow category known as Accessory Guest Accommodation, which allows homeowners to rent out rooms on a short-term basis while living on-site. It replaced most of the previous bed-and-breakfast framework in 2025. These permits require the property to be the owner’s primary residence, meaning the home they live in full-time, and that the owner be present while guests are staying. In practical terms, homeowners can rent out a room but cannot operate a full-time vacation rental in a separate or unoccupied dwelling.

Despite that, listings continue to appear on platforms such as Airbnb and VRBO for several reasons. Some may be operating legally within permitted categories, including licensed guest accommodations or commercial lodging. Others may not comply with local regulations but appear online before enforcement action is taken. Platforms do not verify whether listings meet local zoning rules.

The Town of Banff says its approach is shaped by two key factors: the community’s location within a national park and an ongoing housing shortage.

Unlike most municipalities, federal rules limit who can live in the community through what is commonly known as the “need to reside” requirement. Under those regulations, residents must qualify as eligible occupants, typically people who work in the park or operate a business that requires their presence. Operating a short-term rental does not, on its own, qualify someone to live in Banff.

At the same time, the town faces significant housing pressure. According to Town of Banff documents, the rental vacancy rate is below 1% and the community faces a shortfall of roughly 700 to 1,000 housing units. Local policy has increasingly focused on preserving housing for permanent residents rather than tourist use.

In 2023, council introduced a temporary pause on issuing new bed-and-breakfast-style licences while it reviewed the rules. That process led to the adoption of Bylaw 403 in 2025, which made the regulations stricter, reduced how many properties can operate as short-term guest accommodations, and required owners to live on-site if they want to host visitors.

More recently, council has taken a stricter approach to new applications, particularly those seeking to convert secondary suites, such as basement apartments or separate units within a home, into short-term rental or bed-and-breakfast uses in an effort to preserve long-term housing. At the same time, existing permitted operators are generally able to continue operating if they renew their permits and remain in compliance.

For visitors, that means legal accommodation options still exist, but are largely limited to hotels, inns and other commercial lodging, along with a small number of licensed guest accommodations in private homes. For residents, it means rules around short-term rentals are among the strictest in the country.

Enforcement is an active part of the system. The Town uses development permits, along with business licensing, inspections and complaint investigations to monitor compliance. Penalties can include fines ranging from $100 to $2,500 under land-use bylaws, along with additional penalties for operating a business without a licence, including $500 fines and $100 per day for ongoing offences. Permits and licences can also be suspended or revoked.

The result is a system that tightly limits short-term rentals in residential properties while prioritizing long-term housing.