Victoria tightens regulations for short-term rentals

Council voted unanimously to increase fees, increase fines for non-compliance, restrict acceptable use of some units and redefine terms in the bylaw.In the absence of real power to regulate and shape the short-term rental housing market in Victoria, city council Thursday approved several changes to its short-term rental regulations to get a better handle on the industry.

In a bid to alleviate the burden on its staff, reduce costs and address the ongoing housing crisis, council voted unanimously to increase fees, increase fines for non-compliance, restrict acceptable use of some units and redefine terms in the bylaw.

Coun. Jeremy Caradonna said the city has a limited ability to regulate a system that has about 700 licensed units while companies that track short-term rentals claim there are more than 1,300 actively at work in Victoria.

He said given the province will be handing out housing targets to cities, it would be great to have more control over the industry as it could be a pathway to bringing units back to longer-term rental housing.

“The best we can do right now is try to reduce staff time and cost around this big unwieldy beast,” he said. “My hope is that these do in fact reduce costs and time, clarify and maybe also send a signal to some operators in the city that this is not our preference for how housing is used. This is not housing, this is quasi-hoteling.”

Included in Thursday’s changes were increasing fines for operating without a business licence to $1,000 from $500, and to $500 from $250 for those who advertise without a licence; doubling the fine for contravening allowable use to $700 and increasing the cost of a licence for a non-principal residence to $2,500 from $1,000.

The city has also moved to restrict the occasional rental of someone’s entire home to four bookings per year and require those renting out their “principal residences” to furnish proof to the city that the home is their principal residence.

“It’s a first step in the right direction,” said Coun. Susan Kim, who echoed calls for more municipal power to deal with the industry in the face of a housing shortage.

A city staff report noted the popularity of the short-term rental market continues to grow and each unit that switches from either long-term ownership or rental into the realm of the short-term rental market has an impact on housing availability and affordability.

Citing a McGill University study, the report said for every housing unit diverted to vacation rentals, the average rent increases by $49 per month for as many as 100 rental units.

The study estimates the impact of short-term rental conversion in Victoria has been about $1,151 a year.

The changes made Thursday are intended to improve the regulatory effectiveness of the city’s short-term rental department, which has grown to seven staff, including four bylaw officers.

Caradonna said it’s all being done with a housing crisis as backdrop.

He said the short-term rental industry has created two problems — it has taken housing units off the market in a crisis and the cost of policing and managing the system in the city is expensive and time consuming.

“Three per cent of our housing stock is now wrapped up in short-term rentals. If those several thousand units were back on the market, that would be hundreds if not thousands of units that people could buy or rent and live in,” he said, adding it would take the pressure off the cost of living and add immediate supply.

According to the city, the number of short-term rental listings fluctuates depending on the season, though the Inside Airbnb website suggested there were no fewer than 1,327 accommodations offered through Airbnb alone at any point in 2022.

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