Victoria council may target short-term vacation rentals in housing crackdown

Downtown Victoria condo owners who use their units for short-term vacation rentals, or STVRs, may soon have to take out business licences and could see their units re-classified as a business for property tax purposes.

City staff are recommending regulations and city wide enforcement to target houses, basement suites and garden suites being used for STVRs.

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The moves are part of staff recommendations going to Victoria council this week designed to limit STVRs “ to the greatest extent possible” through mechanisms such as zoning and housing agreements.

The idea is to make sure all new residential units are used for housing and not vacation rentals.

Staff recommendations include:

1. New business regulations for existing and future STVRs that may include:

• Requirements for a business licence for all short term rentals.

• Business licence fees.

• Requirement that business activity comply with applicable strata rules.

• Establishing rules for operation of short term vacation rentals.

2. Work with B.C. Assessment to ensure that properties used for STVRs are assessed as a business.

3. Staff to report back on a possible city wide STVR enforcement that will detail proactive enforcement of short term rentals, including:

• Recommendations on whether to have staff-led enforcement versus hiring a third-party.

• Recommended fines and escalating action for non-compliance.

• Audit options to monitor adherence to rules.

• Expediting enforcement rollout.

• Creating a short-term rental webpage that outlines regulations and the city’s progress in reducing the STVR impact on long-term housing availability.

• Establish a monitoring system.

Currently, STVRs are allowed only in areas of downtown with transient zoning and in occupied single-family homes, but only for renting out one or two bedrooms.

STVRs are prohibited in an entire condo with no transient zoning; one- and two-bedrooms within an occupied condo; entire homes and secondary suites, including garden suites.

Victoria council is worried about an increasing number of condo units being taken out of the long-term rental housing pool for use as short term rentals. The city has heard from several condo owners and strata councils worried that their buildings are being turned into defacto hotels, creating problems with noise, security and garbage.

On the other side of the coin are homeowners, particularly seniors, who say they rely on income from STVRs to offset the high cost of living in Victoria.

City staff said in their report it is not possible for strata properties to opt in or out of transient zoning. Further, rezoning properties to prohibit STVRs is not an effective tool because the units would retain legal, non-conforming status.

Staff said control of STVRs is possible through business regulations.

“STVRs are businesses and, as such, are subject to regulation by the city. The city does not have the power to enforce strata rules, but it can, as part of business regulations, require that strata rules be complied with as a condition of the issuance of a business licence,” said the staff report.

Once STVR regulations are developed, staff can move forward with a city wide enforcement strategy, the report said.

But some councillors say the recommendations do not go far enough. Councillors Ben Isitt, Jeremy Loveday and Charlayne Thornton-Joe want to see changes in downtown zoning to ensure condominiums are used for housing — removing transient accommodation as a permitted use.

Isitt said that over time the legal non-conforming use would be phased out.

“If the municipality can co-ordinate its efforts with strata councils I think that [with a] two pronged approach — the city fixing its zoning and the strata councils looking what they can do with their own bylaws — we would see the proliferation of short term rentals decline over time and have these buildings restored as residential buildings,” Isitt said

Isitt said he supports a crack down against STVRs operating in whole houses, secondary suites and garden suites.

“I personally think that Airbnbs should not operate year-round in any dwelling unit in the city. We need these units for housing. It’s sometime referred to as whole-unit short term rentals.

“So I think the city has to prohibit and enforce against whole unit short term rentals wherever they are taking place in the city — whether that’s in garden suites, basement suites or downtown condominium units.

“We need to ensure these units are used for the primary purpose of residential occupancy.”

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