Short-term rentals cost Victoria renters an extra $1K per year, council to consider tightening restrictions

Short-term rentals cost Victoria renters an extra $1K per year, council to consider tightening restrictions

In the midst of a housing crisis, the City of Victoria is making moves to try and mitigate the negative effects. The latest is by making changes to its short-term rental bylaw.

Short-term rentals, such as Airbnb or Vrbo, have been restricted in the city since 2018, when a bylaw was brought into effect. It imposes a number of restrictions including limits on the ability to rent a whole home, requiring a business licence, and introducing fines for non-compliance.

The proposed changes come at the same time that the city is ramping up enforcement. The city has already more than doubled the number of fines handed out in 2022. Last year, a total of 56 fines had been handed out, and by July 25, there were 124 short-term rental fines.

Additionally, the city has 558 open investigations into potential infractions.

Since then, city staff have tried their best to enforce the bylaw, but have come up across some shortfalls with the bylaw and some barriers due to the nature of the rental platforms.

On Thursday, Victoria council will consider a report in the committee of the whole suggesting changes to the bylaw to “improve regulatory effectiveness and of the Short-Term Rental program.”

Some of the recommended changes include restricting the rentals of principal residences to four bookings per year, increasing the fine amounts from $500 to $1,000 for operating without a licence and from $250 to $500 for advertising without a licence, and simplifying the licence appeal process.

Staff point to a July 2022 report by McGill University looking at the impact of short-term rentals in B.C. that found every housing unit diverted to the short-term rental market increases rent in the market by $49, which staff say means the vacation rentals are costing renters in the city an average of $1,151.56 per year.

“Both before and during the pandemic, Victoria’s STR market has been dominated by commercial operators. On average from 2018-2022, 78.4% of listings active each day in Victoria have been frequently rented entire-home listings or ghost hostels, which means they are highly unlikely to be the host’s principal residence,” McGill’s report says.

“[I]n the absence of the pandemic, there would likely be approximately 800 housing units converted to full-time STRs in the city.”

Additionally, the McGill report estimates that short-term rentals are responsible for 32.3 per cent of the rent increases between 2017-2019.

The City of Victoria says as of July 11, there were 730 licences issued for short-term rentals.

According to AirDNA, a company that tracks short-term rental data in various housing markets around the world, there are 1,260 active rentals in Victoria. Of those, 156 are in a shared or private room which do not require a business licence, and the remaining 1,104 are for the entire home. These require a business licence.

While the staff report looks at tightening restrictions as much as it can, there are still factors out of the city’s control that make the short-term rental market difficult to regulate.

One of the issues is that Airbnb and Vrbo anonymize the data on their sites, so while the city may be aware of a listing that is in contravention of its bylaws, it may not be able to locate the exact house it is operating in.

It’s a problem that the B.C. government has said it plans to address, with details to be announced in the fall.

“We want to ensure that those that are actually operating short-term rentals are following rules, that they have the proper permits in place to be able to do that,” Ravi Kahlon, B.C.’s housing minister said to CHEK News on April 11.

“We’ve been hearing from local governments that is a big challenge for many of them, that they have rules in place, but many of them don’t follow the rules and we want to make sure that both sides are covered.”

One Victoria housing advocate, Leo Spalteholz, says he would like to see the province bring in restrictions that put the onus of enforcement on the hosting platforms, rather than the municipalities.

“If the province can actually force the platforms to cooperate, most of those [enforcement] resource requirements should disappear,” Spalteholz said on April 11.

“It should just be a matter of the City of Victoria or any municipality maintaining a list of licensed hosts, and they have a definition of what they allow and what they don’t allow, in terms of short-term rentals, that list gets submitted to Airbnb, Vrbo, whatever platform is out there, and that platform must cooperate, then they will simply refuse to host anything that’s not on that list.”


Laura BroughamLaura Brougham

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