Victoria will try to strengthen its policies but is seeing its hands tied by the lack of authority to clamp down on short-term rental hosts and property managers who are using dubious if not illegal means to dodge city regulations and fees.
As the capital consistently ranks near the top of Canada’s most expensive rental markets, the city warns existing housing is being diverted to the short-term market.
The city is seeing 28-per-cent year-over-year growth in the number of units being lost to the short-term rental market. The number of applications by non-principal operators – those who don’t live in their listed rental – has also been steadily increasing.
The city’s existing rules allow owners to rent out up to two bedrooms of their principal residence or list the entire home as short-term accommodation on occasion while they’re away.
Council on Thursday voted to draft amendments to its bylaws that would limit entire homes to four bookings per year. Other amendments will include increased fees and fines, closing wording loopholes and more.
Several councillors called on the province to give the city more authority to curb the loss of long-term housing.
“Either give us more powers to regulate this, in order to meet the (housing supply) targets that you are setting on us, or pony up and do it yourselves,” said Coun. Susan Kim.
The city found operators are using creative ways to apply for a $150 fee meant for principal resident operators instead of the $1,500 fee for non-principal operators. Many hosts are also applying for the lower principal operator fee despite listing their secondary suite as a short-term rental, which is not allowed in the city.
While some operators applied for lower-cost licences they weren’t eligible for, hundreds aren’t applying for the permits at all. The city found just 66 per cent of hosts complied with getting a licence in 2022. There were no fewer than 990 short-term rentals operating at any point last year, but only 665 licences were issued.
Victoria also risks losing hundreds more units due to some buildings having grandfathered-in short-term rental allowances. The city doesn’t have the authority to regulate those buildings beyond requiring operators to get a licence, so it would need provincial legislation changes to stop those units from being converted.
While current regulations exclude third-party involvement, the city said the increasing number of out-of-region investors buying units for short-term rentals are using property management companies in many ways. Some are likely only using the companies so their application has a local mailing address.
Staff on Thursday warned their already overwhelmed enforcement capacity is up against an entire industry that’s been created around illegal short-term rentals.
Victoria staff outlined a myriad of problematic tactics hosts and property management companies are using, including: obtaining a business licence for one dwelling and then using that licence for other properties; hosts removing their listing during business hours so city workers can’t see them; hosts using fake names, photos or addresses; and operators using other people’s business licences.
The city’s top lawyer gave the example of condo projects – likely visible from city hall – had said during rezoning hearings they’d be for residential use only, but then actively marketed that people buy the units and list them as short-term rentals.
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