While the City of Victoria is cracking down on illegally-operating short term rental units, it’s also reaping the rewards of the legal end of the owner-run accommodation boom.
In the first six months of mandated operations the City has collected $529,000 in business license fees from interested owners.
Beginning Oct. 1, 2018 owners of homes interested in running short term rental operations were required by the City of Victoria to apply for a business licence. Two different options are available: a licence where the home is the person’s principle residence (in other words, that they live in the home) the fee is $150. If the site is not the principle residence the business licence fee is $1,500.
Since 2018 the number of business licences has jumped form 528 licenses to 675 licences, granting the city the more than $500,000 in revenue.
These funds will go into general revenue and be used to pay for administrative, enforcement and legal costs associated with the short term rental program.
Contrary to an increase in business licenses, the number of postings has actually dipped; there were 1,440 online listings in December 2018, when disciplinary actions began and as of May 2019 there were 1,268 active listings, according to Host Compliance, a third party monitoring agency hired by the city.
The City has also engaged in disciplinary actions against illegally operating businesses in the form of fines, though it could not confirm the exact amount of tickets issued. Fees for running an illegally operating business sit at $500, though this can be applied daily until the operation is shut down.
Destination Greater Victoria also gets a portion in the form of Municipal and Regional District Tax (MRDT). So far it’s received over $240,000 out of the $350,000 reported by Airbnb.
As part of the provincial contract on the tax, Destination Greater Victoria can use the funds for either marketing purposes or for affordable housing options.
“Our intention is to work with the City of Victoria and the hotel associations to come up with an affordable housing plane focused on the work force,” said Paul Nursey, CEO of Destination Greater Victoria. “We’re trying to make something that works for the hospitality industry.”
Destination Greater Victoria is working with hotel partners and Destination BC to bring about plans for this housing option.
Nursey added that so far numbers seem to be levelling out between Airbnb and and hotel occupancy, but that further legislation still needs to ironed out to make it an even playing field.
“These new regulations helped contain things, but the commercial Airbnb is still not paying commercial property tax,” Nursey said. “We’re also keeping an eye on Airbnb and how it looks in regards to safety, insurance and liability.”
Nursey said that the biggest problems with Airbnb remain in large developments full of rented-out units, such as the Janion building at the end of Pandora Avenue.
“No one has concerns about someone sharing a spare bedroom,” he said “But some investors have 40-60 units.”
Provincially, Airbnb remitted $14 million in PST and $4 million in Municipal and Regional District Tax in the first six months.
Other short term rental operators such as VRBO have yet to reach any form of official agreement.
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