A commentary by a long-serving strata president, working as a data analyst in the Victoria technology sector.
A recent commentary, “Short-term rental ban will cost hundreds of millions of dollars,” said that “there are 634 legal, licensed, tax-paying short-term rentals in Victoria. All were protected by their legal non-conforming status after the city removed transient use from more than 140 property zones in 2018.”
Based on a March 2023 FOI request I submitted to the City of Victoria, there were 587 approved short-term rental business licences in the city
Of those, 529 were held by owners in multi-unit residential strata properties, such as the Janion, Union, Mermaid Wharf and the Falls.
A total of 512 licences were in the category of non-principal resident, either as an owner or a tenant.
It is this group of 512 licences that presumably fall into the category of “legal non-conforming” as defined under Section 528(5) of the Local Government Act.
The commentary also said that these properties are “protected by their legal non-conforming status” implying that the buildings they are located within should continue to retain their legal non-conforming status so that owners can continue to operate their short-term rentals. The writer might be correct, but he mistakenly assumes that these properties can be used for commercial purposes in the first place, such as operating short-term rentals.
The city considers the licensing of a short-term rental to be a commercial operation rather than a residential use.
This puts the city, and the investor community, at odds with provincial legislation that created these properties in the first place.
These 512 properties were created as residential strata properties and were never intended for commercial purposes. However, the writer of the recent commentary would have us believe that running a barber shop, or a bakery in a residential strata property would be perfectly acceptable just as he believes that operating a pseudo-hotel is.
These buildings were never envisioned to be transient accommodation, or to generally support short-term stays, even though city zoning, before 2018, permitted such a use. In British Columbia when a strata plan is deposited under the Land Title Act, the developer must register the strata as either residential, non-residential, or a mix of residential and non-residential.
By doing so, the developer is defining the explicit use of the strata lots identified on the strata plan. When registered as residential, the strata is created as a “strata plan consisting entirely of residential strata lots.”
Ultimately, provincial legislation, not city zoning bylaws, govern the use of strata titled buildings. Strata corporations, and the buildings they occupy, are created, and governed, by provincial legislation and the legislation is clear on how a residential strata lot is to be used.
Section 1 of the Strata Property Act defines a residential strata lot as “a strata lot designed or intended to be used primarily as a residence.”
While residence is not a defined term under the act, the Supreme Court of British Columbia has considered the definition of “residential” in the context of strata corporations, stating in the Nanaimo (Regional District) v. Saccomani that “…providing accommodations in a home to tourists was not a residential use and that a residential use must be ‘non-transient’.”
Furthermore, the courts have continued to solidify their position in HighStreet Accommodations Ltd. v. The Owners, Strata Plan BCS2478, and more recently by the Civil Resolution Tribunal in Honeybourne v. The Owners, Strata Plan VR 270, where at paragraph 24, the Tribunal member agreed that “Based on Highstreet and Saccomani, I find that RL’s use of his strata lot for Airbnb is a commercial use and is not a residential use.”
Regardless of the resolution that the Greater Victoria Short-Term Rental Alliance seeks regarding legal non-conforming status for these 512 properties, the fact is, the investor community was led to believe that they were allowed to operate a commercial hotel in a building created exclusively for residential, not commercial, purposes.
The city has encouraged and fostered those beliefs by issuing a commercial business licence to short-term rental operators, knowing that by doing so they were effectively commercializing residential strata.
The City of Victoria needs to end the practice, and the province needs to step in, if required, to ensure their legislation is being conformed to.
