Victoria city council has decided to crack down on short-term rentals (STRs) through websites such as Airbnb. About 1,700 housing units in the city are zoned for STR, though it鈥檚 likely only a portion are used for that purpose. However it鈥檚 believed many more are operating under the radar.
Most of these units are suites in apartment buildings or condominiums, but many are in single-family houses.
Councillors have voiced several concerns with the situation as it stands. Victoria already has an extremely low vacancy rate for apartments and condos. If some of these units are used as holiday rentals, the vacancy rate is driven down further.
There is also a question of fairness. Hotels are losing business to STRs while paying far higher taxes. In addition, permanent residents complain about next-door neighbours moving in and out every few days.
Council鈥檚 decision was based on a staff paper that laid out a series of recommendations.
The first decision deals with short-term rental of houses, or adjacent garden and basement suites. These are already prohibited, because they displace potential long-term renters. But enforcement of this bylaw has been weak. Council called for a get-tough policy on these short-term rentals.
However, residents will be allowed to rent their homes for short periods in special circumstances; for example, while they are on vacation. They are also permitted to rent single rooms in their homes, because these have a minimal effect on housing availability.
The second step deals with the short-term renting of apartments and condos. This is currently permitted in buildings zoned for this use. However, council is looking to eliminate STR zoning in all residential buildings. This means that the short-term rental of entire suites will be prohibited, and council has directed bylaw-enforcement staff to rein in these operations.
Owners will, however, be allowed to rent single rooms so long as they also occupy the suite, as is currently the case. The logic here, as with owner-occupied houses, is that these arrangements do not affect vacancy rates.
The third step deals with business licences and taxes. Council decided that all STR operators will be required to acquire business licences, and to pay the associated fees.
The city will also push for higher taxes on STRs, where appropriate.
Higher taxes are by no means a certainty. The setting of tax rates rests with the B.C. Assessment Authority, and ultimately with the provincial government. But council has a good case to make that a tax hike is in the public interest.
And once these changes are made? It鈥檚 impossible to say what the precise effect will be. But research conducted by a consultant at the University of British Columbia indicates that at least 300 STR units could be returned to the long-term rental market. That might lift the vacancy rate by a percentage point or so, not a small matter with the current rate hovering at 0.5 per cent.
No doubt this decision will cause heartache to homeowners who were supplementing their income by renting out suites and basements. But it is in keeping with policies being considered in other cities, such as Toronto and 91原创.
It is a reasonable, indeed necessary, response to the arrival of online rental services such as Airbnb. If not properly regulated, these have the potential to undermine the hotel sector 鈥� no small matter in a city where tourism is plays such an important role in the economy. Uncontrolled STRs can also drive down our already historically low vacancy rate for rental accommodations.
In short, it鈥檚 difficult to see that council had much choice in the matter. Action was definitely called for, and the steps taken should help stabilize an increasingly problematic situation.
