Short-term rentals, long-term problems: What’s next for Victoria’s Airbnb bylaw?

Nicholas Pescod/CHEK News

Geoff Shuttleworth, like countless other renters, can’t find a place to live in Victoria.

Shuttleworth works in health care, and when he started inquiring about transferring to Victoria from up-Island where he lives, his employer told him to find somewhere to live first, then apply for the transfer.

“I haven’t found a place yet, but I’m looking but certainly the prices have made it a slower process,” Shuttleworth said. “I think I would have found something a lot sooner if the prices were lower and a lot more fair.”

He says he is looking for a room in a house or some shared accommodation since that is all he can afford in the city, which isn’t what he expected his living situation to be at the age of 43.

“I’m looking at renting a room, not even an apartment, that might be my only option. A room in a nice house with a roommate or a shared accommodation,” Shuttleworth said. “And at my age, that’s not ideal, but it might only be what I can afford to take for now.”

Although the CMHC defines affordable housing as 30 per cent of before-tax income, Shuttleworth says he does not believe he can find a rental that fits within that range.

Shuttleworth says he may have an easier time finding a place since he is single without kids or pets, and he worries for those in different situations than he is.

“I despair to what people are going to do. I mean, you just can’t find an affordable place these days. It’s hard,” Shuttleworth said. 

“People are sitting in places they might not want to stay in just because they have to. And it’s a terrible time for that. It really is and gas prices are making it worse. There’s a lot of Canadians not knowing where they’re going to live or having to live in a place that they don’t want to at all.”

One of the goals of the City of Victoria’s short-term rental bylaw was to return some of those units to the rental market.

While Victoria Mayor Lisa Helps notes the short-term rental bylaw on its own is not expected to solve the supply issues, the hope is that it will help ease the pressure renters face.

“I hear the words ‘housing crisis’ every day, and we all need to be part of the solution, including people who are running these illegal rentals,” said Helps.

According to the Canada Mortgage and Housing Corporation, the vacancy rate in Greater Victoria for purpose-built rentals is at one per cent, as of February 2022.

Pershing Sun, senior economic analyst with CMHC, said over the past year the vacancy rate in Victoria declined to just one per cent while purpose-built apartment units expanded by two per cent in 2021 — half as many as in 2020.

“We definitely need more supply. The market reflects the proper supply and demand balance, we wouldn’t see rapid rent growth, like last year,” she said. 

The number of purpose-built rental homes in Victoria has hardly increased over the past 30 years.

In 1991, Victoria had 26,144 purpose-built rental homes but in 2021 it had only climbed by 2,062 units or eight per cent, CHMC data shows.

Sun said Victoria saw lower completions for purpose-built rentals in the first quarter of 2022 than it did during the same period last year, which was already 40 per cent lower than the year before. 

“That’s not the direction we want to go,” said Sun. “We want to see more starts or more competitions to address our tightening rental market conditions.”

Housing prices and rents have soared dramatically in the past year. The average rent for a one-bedroom in Victoria is now at $1,776 per month. In 2021, an average one-bedroom apartment was $1,535 per month, CMHC data shows. It also shows that the number of condominium apartments that are available for long-term rental increased by 100 units in 2021, which is significantly lower than the addition of 600 units in 2020. 

According to the British Columbia Real Estate Association report, the average price for a home increased from $883,139 in April 2021 to $1,093,131 in April 2022. 

Brendon Ogmundson, chief economist with BCREA, says in Greater Victoria there was a 7.6 per cent year-over-year decrease in active listings in April 2022 compared to April 2021.

He says this is due to the lack of supply, and since many people are competing for the same few listings, prices are driven up.

“The average price in Victoria is over a million dollars, because we had a lot of demand flooded into a market that was really, really under supplied,” Ogmundson said. 

“A lot that demand is people coming over from the Lower Mainland or other provinces in Canada, a lot of migration into Victoria during the pandemic that happened. And as a result prices have really, really jumped.”

Ogmundson says this will make it difficult for anyone trying to enter the market.

“Without adequate supply in the market, especially for anyone looking to relocate to Victoria, it’s gonna be really hard to find any adequate housing,” Ogmundson said. 

“For most of the past two decades the Victoria vacancy rate has been under one per cent. And that kind of screams that there’s a real supply problem getting rental units built in Victoria. And there’s obviously a lot of demand for whatever is getting finished. So whether you’re looking to buy or rent, it’s going to be really, really difficult in inventory.”

Government wants province-wide framework, but nothing decided yet

While various levels of government agree that changes are needed to the short-term rental industry, there are no plans for changes in the near future.

The number of active rental listings on short-term rental sites like Airbnb or Vrbo far outpaces the number of business licences, and the City of Victoria says enforcement is a challenge due to the policies of those sites to keep data anonymous.

A housing expert told CHEK News the province could step in and implement policies to require sites to work with municipalities to assist enforcement, and B.C. Housing Minister David Eby says it’s something the province is considering.

“We received a report from the Union of BC Municipalities about this issue, making recommendations to the provincial government about a new legal framework that would allow cities to regulate this more effectively,” Eby said. “We’re actively doing policy work on that and I look forward to doing what we can at the provincial level to support cities to address this.”

The report the UBCM sent had 13 recommendations for action on short-term rentals.

The requests included creating a regulatory framework similar to policies for ride-sharing for platform accountability, requiring all online accommodation platforms to make data available through a provincial interface and requiring the platforms to publish business licence or permit information with local governments.

“There is a role for the province to play here, both to ensure a level playing field among the different service providers that they’re all sharing the information,” Eby said. 

“And also to give cities the tools that they need to regulate this so that they can incorporate that data and map it up with the permits they’ve issued and control and have insight into what’s happening in their communities.”

Though Eby would not give a specific timeline, he said the goal is to get “legislation in place as quickly as possible to support cities on this.”

What’s next for Victoria’s short-term rental bylaw?

Helps says the city’s bylaw has been effective in some ways, but not effective in others.

To help with enforcement, the city is looking to add three temporary bylaw officers to help enforce its short-term rental bylaw as part of the operations plan.

However, she says reviewing the current bylaw will be up to the incoming council after the Oct. 15 municipal election.

“I think there’s always room for improvement. The bylaw has been in place for a number of years, we’re doing our best to enforce it. The next council may wish to relook at it when they sit down at the council table in the fall and figure out, are there more levers that need to be pulled?” Helps said. 

“But this term is winding down and it’s not on the agenda for the next five months.”

CHEK News spoke with Marianne Alto and Stephen Andrew, two Victoria councillors who have announced their intentions to run for mayor in the upcoming municipal election, to learn if they would look into short-term rentals should they be elected mayor.

Alto says she thinks next year would be a good time to review the bylaw, but isn’t sure yet if any changes would need to be made.

“I do think that it’s entirely appropriate in 2023, since it’s five years into the program to ask for an update,” Alto said. 

“And based upon what that update shares or reveals that could lead to a review for sure. Do I think it’s a time sensitive, urgent matter that has to happen within the first 60 days? No. Do I think it makes sense for it to routinely come up as part of the 2023 work plan? Sure. Because I think five years into any program is a good time for an update and a potential review.”

There are 585 approved short-term rental licences in the city, and AirDNA, a website that analyses data from Airbnb and Vrbo, shows there were 1,063 active listings in May.

Alto says she would want to learn why the short-term rental operators who aren’t licenced are not coming into compliance with the city’s bylaw.

“The question I’d be interested in asking those people is, why not? Why are you not within the licence system, when many people would argue the license system isn’t that onerous,” Alto said. 

“And so the question would be what’s the barrier? Is it the cost? Is it convenience? Is it that you don’t want to be bothered? Is it that you don’t want government oversight?”

While Alto says she would like to see staff report back on the bylaw before determining if it needs to be adjusted, she says there are some key metrics she would look for to help inform her decision.

“If it’s not producing additional rental long term rentals,” she said. “If it’s not producing the type of income that allows us to contribute to other affordable housing, then yeah, then it needs to be adjusted.”

However, Alto notes the pandemic did impact enforcement of the short-term rental bylaw as the bylaw officers were called to handle other issues related to the pandemic, which may account for there only being 16 tickets issued in 2021.

Andrew says he believes the city’s short-term rental bylaw has been effective, citing the hundreds that are under investigation, but acknowledges that it isn’t perfect.

“It has been to some degree. I have sat in on a number of these meetings where an appeal has come before council … but the trouble is people think it is as simple as going out and getting these guys to comply. There is a lot of investigative work that has to go into it,” he said, later adding. “So, I think it has been quite successful.”

Andrew said he would be open to having staff produce a report on how the bylaw is working, how it can be improved based on what other jurisdictions around the world are doing. However, with Victoria being one of only three municipalities in the region that has a specific short-term rental bylaw, he said the city can only do so much.

“There is no point in us creating a bylaw to try and bring 800 or so units within the City of Victoria into compliance if Saanich and Oak Bay are not doing it. It is just going to drive the Airbnb into those areas and that just doesn’t work,” he said.

The first-term city councillor said the current fragmented approach isn’t an “avenue for success” and that Victoria cannot solve the region’s problem on its own. He also said he would like to see the city sit down with other municipalities and work with them to encourage them to come to the table with solutions that benefit the region.

“This is part of a bigger issue which is that everyone is looking at Victoria to deal with the housing issue. We’ve got 13 municipalities and if you look at the peninsula for instance the number of jobs there, they have a challenge for those employees as well,” Andrew said.

“So unless the entire region gets on this train and starts working together, one municipality that is 19 square-kilometres is not going to solve the problems for the region.”

This is the final story in the series looking at short-term rentals.

The first story breaks down the number of active listings on short-term rental sites like Airbnb and Vrbo, compared to the number of licences issued.

The second story CHEK News spoke 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.

Editors note: After publishing the first three stories, CHEK received updated short-term rental licence numbers from the City of Victoria. As of May 9, there were 546 approved licences. The latest update from the city is there are 585 approved licences.

With files from CHEK News political correspondent Rob Shaw.

Laura Brougham
Nicholas Pescod

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