BC’s small towns struggling with housing crunch triggered by online short-term rentals

Nelson is just one of scores of communities struggling to regulate short-term rentals like Airbnb.

Mayors and councillors from across BC jammed a meeting room at the Union of BC Municipalities convention today to compare notes on the unprecedented housing crisis they face as a result of the explosion of online short-term rentals.

From resort communities unable to house seasonal workers to destination cities like Victoria with a zero vacancy rate, all agreed provincial action is needed to level the playing field by extending existing hotel and provincial taxes to online platform hosts.

That’s a simple step Finance Minister Mike DeJong has so far declined to take.

Some notes from the front line:

• in Nelson, Mayor Deb Kozak took action when arriving students at Selkirk College found no vacancies, short-term rentals soared to more than 120 and speculators boasted of buying up homes to convert to online rental. A new bylaw, much like Vancouver’s proposed rules, will hold the number of units to about 110 in the summer, but only 40 when students are on the hunt for accommodation;
• in Tofino, Mayor Josie Osborne led a major overhaul of rules that had been in place since 2002 to rein in a runaway short-term rental market that wiped out worker accommodation. The new rules improved compliance, but Tofino is now focusing on the unlicensed listings: the city believes 226 units are listed, but only 149 are licensed.
• in Victoria, where 2,000 units are listed online, Tourism Victoria CEO Paul Nursey can’t recruit high-paid tourism marketers because they can’t find a place to live. Victoria, too, is bringing in a regulatory regime similar to Vancouver’s.

Mayors and councillors from Penticton, Invermere, Comox, Courtenay and Fernie were quick to add their tales of woe during the question period.

Right across BC, tourism industry leaders are worried about the impact of online STR (short-term rental) services.

The impacts fall into five areas, says Tourism BC’s Walt Judas: pressure on civic services, safety and security for existing residents, uneven taxation, pressure on affordable housing and elimination of housing stock for seasonal workers.

A key step the province can take, says James Chase, of the BC Hotels Association, is a simple change to current regulations that exempt hosts from provincial sales and hotel tax if they rent four rooms or fewer. It can be removed at the stroke of a pen by cabinet.

Collecting this tax at point of sale, by the online platform, would level the playing field and simplify enforcement for municipalities.