The business — a doggie daycare — is in an industrial-zoned area between Southeast False Creek and Mount Pleasant, and had been using a back-alley parking area as an outdoor play zone.
The city has rules about the number of parking spaces businesses must provide, and ordered the daycare to remove the open air run.
Jennifer Shortt, a co-owner and operator of Canine Adventure Den at 33 E. 3rd Ave., said no one told her two years ago, when the business opened, that there were bylaws concerning how the spaces could be used.
"We just thought that since we had the loading zone out front, that that would suffice for parking and that we could use the back section as an outdoor section."
Dog owners who use the daycare said they don't have trouble finding places to stop for drop-offs and pick-ups.
But neighbouring business owners also complained about the noise the barking dogs made in the lane.
City bylaws around noise control apply when there is more than three minutes of sustained noise in a 15-minute span.
Shortt said the daycare took actions to reduce the lane barking, but said resolving the parking matter will be a longer process.
Carli Edwards, assistant director of Vancouver City's inspections division, said the business can apply for a relaxation on the number of parking spaces it requires.
"Then we would look at the specific components of that business that are maybe unique as to why they maybe wouldn't need those spaces," she said.
Kirsty MacGregor, another co-owner of the daycare, is frustrated that she has to keep the dogs inside now for what looks to be the rest of the summer, and possibly beyond.
"Vancouver city poses to be such a dog-friendly place, and it's the least dog-friendly city in Canada," she said.
"It's so frustrating because these dogs need somewhere to go."