Airbnb listings far outpace licences in Victoria as city grapples with housing crisis

The number of active short-term rental units on sites like Airbnb and Vrbo is far outpacing the number of issued licences in Victoria’s struggling housing market, and city officials say a bylaw aimed at restricting the number of listings isn’t as effective as hoped — in part because the websites keep their data locked down.

As short-term rentals were gaining popularity, the City of Victoria implemented a bylaw in September 2017 aimed at restricting them in an effort to curb their effects on the housing market. City staff continue to investigate potentially non-compliant vacation rentals operating within city limits.

The City of Victoria tells CHEK News as of May 9 there were 546 approved short-term rental licences with 23 pending approval. Of the approved licences, 476 are for non-principal residences and 70 are for principal.

But according to Inside Airbnb, a website that analyses Airbnb listings in various housing markets, there have been 1,067 active listings on Airbnb alone in the past year, 850 of which do not have a minimum stay of 30 days and therefore must adhere to the bylaw.

There were 975 active short-term rentals on Airbnb and Vrbo in the City of Victoria in April 2022. (AirDNA)

AirDNA, which analyses data from Airbnb and Vrbo, shows that there were 975 active listings in Victoria on the two sites just in April. Of those, only 17 per cent required a minimum stay of 30 days and were therefore not governed by the bylaw.

According to AirDNA, 872 of the listings were for entire homes, despite the city’s bylaw restricting rentals of whole homes to legal non-conforming buildings or if the regular occupant is on holiday.

Struggles with enforcement

So what is the city doing about the wide gap between issued licences and the actual number of listings currently operating? About as much as it can, say officials.

“The City is aware of and monitors a variety of third-party short-term rental data scraping sites. Information from these sites is used as a part of the City’s enforcement techniques to capture listing data and create investigative files,” said City of Victoria spokesperson Bill Eisenhauer.

“The majority of short-term rental operators play by the rules, but there are people operating illegally and we are investigating those operators. Those who don’t operate by the rules will face consequences.”

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Eisenhauer says the city currently has 410 open investigations into potentially non-compliant short-term rentals, and off the back of four court wins upholding the city’s bylaw, the city is confident operators not compliant with the bylaw will be fined.

“The fine for operating a short-term rental without a licence is $500 per day. Advertising without a valid licence carries a fine of $250 per day,” Eisenhauer said. “Fines may be imposed for every day of the offence, going back as much as six months before initiation of the prosecution.”

In 2021, the city issued 16 tickets to non-compliant short-term rentals. The fines from the four tickets that went to court resulted in $20,000 worth of fines, the remaining 12 tickets resulted in a total of $6,250 in fines.

Victoria Mayor Lisa Helps says while the four court wins helps with the city’s case in enforcing the bylaw, the numbers of active listings compared to licences issued indicate the bylaw may not be as effective as council had hoped.

“It’s in part effective and part not effective,” Helps said in an interview with CHEK. “Our bylaw officers are doing their best. I think there probably is room for improvement but having a bylaw is better than having no bylaw.”

Helps says since the bylaw was implemented and since the court wins, some non-compliant operators have taken steps to follow the rules.

“We certainly have seen people coming into compliance and those who are out there, we will get them,” Helps said. “It will take some time but we will get them because we’re in a housing crisis and housing should be used for housing.”

While Eisenhauer stressed the city is stepping up enforcement efforts, he notes policies of short-term rental sites can pose a challenge.

“One of the challenges Victoria and all cities face is that Airbnb and other short-term rental sites do not require listings to include an address,” he said.

“That information is kept private between the site, the property owner and guests. The City uses a variety of investigative strategies to identify and shut down illegal short-term rentals and bring people into compliance.”

How does the bylaw work?

Since the bylaw was implemented in 2017, operators have had to follow a number of requirements and restrictions.

Some of the requirements include having a business licence, listing the licence number on listings and restricting what types of short-term rentals are permitted.

Short-term rentals, which the bylaw defines as rentals for shorter than 30-day stays, are permitted in most principal residences, and some non-principal residences.

Eisenhauer says the bylaw aims to allow some short-term rentals while also reducing the impact on the housing market.

“The City’s short-term rental regulations balance the opportunity for people to earn a little extra income with the importance of protecting long-term rental housing for people who need it like students, seniors and families,” Eisenhauer said.

“Overall, there has been a steady increase in licencing in what appears to be a recovering travel industry. In the first four months of 2022, 525 licences were approved. That’s as many licences that were issued for all of 2021.”

In a principal residence, the licence fee is $150 per year. People are allowed to rent out a room in their home, or the whole home if the regular occupant is out of town for a short period such as a vacation.

For a non-principal residence, the licence fee is $1,500 for the year. This type is only permitted in legal non-conforming buildings, and renting the entire unit is permitted.

Licences concentrated in downtown condos

Data obtained by CHEK News shows the scale of residential units that are legally being used by non-principal owners for short-term rentals in downtown Victoria.

Between January and March, 510 short-term rental licences were issued by the City of Victoria, with the vast majority being in condo buildings downtown, according to data from a Freedom of Information request.

Of those, 448 units were non-principal residences, with 433 being owners non-principal residences and 15 being tenants non-principal residences.

Principal resident owner-operators account for 55 of the licences, and principal resident tenant operators account for seven.

The city’s data also provides insight into the volume of non-principal owner short-term rental units at some buildings.

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According to the FOI, the top 10 buildings with the highest number of short-term rental units accounted for 70 per cent of the 448 licences issued by the city, with four of them located within a block from each other. Furthermore, the top five buildings all had 30 or more units that were short-term rentals and accounted for 50 per cent of the 448 licences issued by the city.

The Janion on 456 Pandora Ave. and 1610 Store St. has 59 out of its 121 units licenced for short-term rental, the most of any structure in the city. The next highest is The Union, at 517 Fisgard St. and 528 Pandora Ave., with 56 of its 133 units licenced for short-term rental, followed by The Falls, located at 708 Burdett Ave. and 707 Courtney St., with 42. Following The Falls, the next highest is 728 Yates St. with 37 and rounding out the top five is 409 Swift St., with 33 units.

These buildings were constructed or approved prior to the city's short-term rental bylaw and are exempt from restrictions on renting a whole home. The city's data didn't disclose how many owners own multiple short-term rental units.

A map showing where the top five buildings with the highest number of licenced short-term rental units in Victoria. (Datawrapper/City of Victoria data)

In the next story of this four-part series, CHEK News will speak with housing experts about the City of Victoria’s short-term rental bylaw.

The third story looks at bylaws in other municipalities on the South Island, and how the numbers of listings and average revenue compares to jurisdictions around the world.

The fourth and final story looks into potential solutions to the problem and at what level of government they would need to be implemented.

lbrougham@cheknews.ca npescod@cheknews.ca

Editors note: After publishing the story, CHEK News learned six street addresses belonged to three buildings. Janion, The Falls, and  The Union, have two listed street addresses belonging to one building. CHEK News has revised all data and the chart showing the number of active licences has been to reflect this new information. CHEK News regrets the error.

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