As short-term vacation rental platforms like Airbnb and VRBO have taken off and completely reshaped the tourism accommodation landscape, destinations from Vancouver to Venice have grappled with how to balance the housing needs of permanent residents against the economic boon that second homeowners and the tourists they serve bring.
In B.C., tourism hotspots have taken decidedly different approaches when it comes to regulating short-term rentals, but, increasingly, officials are realizing the same thing: the need to put locals’ housing first.
“These are people that are staffing all these tourism facilities and these [short-term rentals could be] homes for the nurses, the RCMP officers, the restaurant workers, the grocery store workers. These are people that run our community and they don’t have homes here,” said Lesley-Anne Staats, director of planning for the Town of Gibsons.
It’s a refrain that should be familiar to Whistlerites, where, according to the 2016 census, 61 per cent of privately owned dwellings sit empty or are at least temporarily occupied for a good chunk of the year. More recent figures from a 2021 housing survey showed that just 10 per cent of all market residential properties are rented on a long-term basis to locals. (Notably, more than 75 per cent of all secondary suites in town are rented to residents.)
It’s difficult to gauge exactly how the proliferation of short-term rental platforms has impacted Whistler’s rental market, but there’s no denying the financial allure nightly rentals present to second homeowners, often saddled with costly mortgages and looking to get a decent return on their investment. That bore out in Airbnb’s own data, which, earlier this year, ranked Whistler as Canada’s most profitable community for hosts renting out their units for so-called “long-term” stays, defined as 28 days or longer.
Although short-term rentals are certainly not the only contributing factor, we also know that the number of available rental homes in the community has largely remained stagnant since 2006 “even though the community population has grown substantially during that time,” according to this year’s provincially mandated housing needs report, presented to council in May.
Then there’s the relative convenience of renting a property out to visitors for a handful of days a year versus renting long-term to locals and all the associated responsibilities—and headaches—that can come with that.
The same provincial housing report also took note of “opportunists who seek to use residential homes as illegal nightly rentals which the municipality continues to enforce against.” Only neighbourhoods with specific tourist-accommodation or temporary-accommodation zoning are permitted to host nightly rentals, and owners who wish to market their property for short-term stays must first obtain a business licence from the municipality, whether rental activity has taken place or not.
Following the streams in Gibsons
In the coastal enclave of Gibsons, officials spent the past two years developing their regulatory framework for short-term rentals, ultimately landing on an approach that divides residential guest accommodations into two separate streams: one for dwelling units with a principal resident, and one for units where no one permanently resides.
“The first stream is basically a traditional B&B where you, for instance, rent out the two bedrooms in your home (one for principal residents, and one for guests],” said Town of Gibsons planning director Lesley-Anne Staats. “The intent is every home is a home for a resident of Gibsons.”
Under the second stream, operators with no principal resident must obtain one of a limited number of temporary-use permits (TUP) to rent out their property, with plans for that category to be phased out entirely within the next two to five years.
“The secondary stream is a creative way to allow something that’s not allowed. So, right now, the way we’ve written our zoning regulations is we’ve said, ‘You’re not allowed to rent out an entire home as guest accommodation,’ but we’re using a tool in the Local Government Act, which is a temporary-use permit, and that allows you to do something for a temporary period of time that’s not allowed in zoning,” Staats explained.
That strategy was arrived at through much debate in the community, Staats said, noting that the discussions were sometimes fraught, particularly from operators and second homeowners from the Lower Mainland who suddenly saw their investment properties lose much of their inherent value.
“We went to public hearing and a lot of the operators complained about it, even though it was pretty wide open at that time for operators to host this type of accommodation. And then council passed a resolution to make the rules even more relaxed, not really recognizing the impacts that would have on housing,” Staats said.
As the town watched its long-term residents get squeezed out of attainable housing and local shops and restaurants were forced to slash hours due to staff shortages (sound familiar?), officials went back to the drawing board.
“So what we had to do at that point was … go back to the very beginning and talk about our goals—and we had to reset those goals. At that time, [council] unanimously supported retaining the long-term rental supply in Gibsons as the primary goal,” recounted Staats. “There was a lot of tension in that discussion because a lot of councillors wanted to support tourism as well, while also realizing you can’t draft these recommendations allowing both equally. We had to choose a direction, and so people ended up choosing retaining the long-term rental supply, and by doing that, we keep housing as the No. 1 priority.”
The TUP system also allows Gibsons to keep better tabs on secondary properties used for guest accommodation.
“We haven’t outlawed short-term rentals or this type of guest accommodation. We’re just making sure that every home is available to somebody. And if it’s not, then we’ll know exactly where they are, and we’ll have heard from neighbours,” Staats said. “Through the temporary-use process, we notify neighbours, we put an ad in the paper, so if there’s a party house, council is going to know about it before they re-authorize it.”
Town officials are hopeful the anticipated drop in residential guest accommodation will be precipitated by an increase in commercial tourism accommodation.
“With that phase-out process, we’re also going to be looking at how we can facilitate or support commercial guest accommodation, so hotels, inns and those more tourist-type rental accommodations,” said Staats.
Learn more about Gibsons’ approach at gibsons.ca/business/rga.
A wait-and-see approach in Sidney
Over on Vancouver Island, officials in Sidney have taken a markedly more cautious stance on short-term rentals—for now.
In January, councillors there voted unanimously to stay the course on nightly rentals, rather than implement tougher enforcement of the bylaw regulating short-term stays.
As it stands, the bylaw allows short-term rentals in most residential properties, provided it is continuously occupied by a permanent resident, be it the owner or a tenant. Like for most municipalities, however, enforcement of the bylaw is primarily complaint-based, and Sidney has struggled to get a handle on how its housing supply is being used. According to a Saanich News report, the public heard earlier this year that Sidney had yet to issue a single fine against a known operator of an illegal nightly rental. Staff at the time noted the municipality does not receive many public complaints about short-term rentals, and added that COVID-19 further delayed enforcement.
Sidney’s council intends to revisit its enforcement approach in 2023, and amidst concerns from the hotel sector and a landmark court ruling in Victoria that favours stricter enforcement, some officials believe it’s only a matter of time before tougher measures are introduced.
Learn more about Sidney’s approach at sidney.ca.
Strict limits in Sechelt
Another Sunshine Coast community has recently rolled out new regulations for vacation rentals, aimed at preserving affordable housing stock for local renters.
In Sechelt, officials this month approved a motion to cap the number of secondary residences rented on a short-term basis at 15. (CBC reported last week that the limit applies to all vacation rentals, but it’s only applicable to homes where no primary resident resides.)
The district estimates there are roughly 50 such properties in town, although Tourism Sunshine Coast puts that number anywhere from 125 to 250 based on information from AirDNA, a short-term rental data platform.
“To date, we have not actually had anything limiting any kind of short-term rentals. If they came in and got a licence, they were allowed to operate,” explained Sechelt Mayor Darnelda Siegers. “So we have heard from people who are building houses specifically for short-term rentals, the non-owner-occupied ones, and
we also are having a number of them on one block.”
The district’s regulatory strategy will also assist in better understanding the scope of illegal rentals in the community, which has long proved challenging.
“The way we’re qualifying it is, if someone has a principal residence but they have a separate outbuilding or suite or accommodation separate from the primary residence, when they actually advertise it on the platform, it is a separate, whole unit. So we don’t know if that’s a house or if there is a primary owner with a separate suite,” explained Siegers. “We’ve been asking for more specific information and it’s been difficult to get that.”
Siegers added that the seaside town is likely to lose a segment of second homeowners, and Tourism Sunshine Coast’s executive director, in a statement to CBC, also warned of the “widespread impact” losing so many vacation rental properties will have.
Siegers acknowledged the backlash from the tourism sector as well as second homeowners, but said ultimately the decision came down to a need to preserve the community’s distinct character.
“Our concern is community fit and the quality of life in a neighbourhood when there are large numbers of people coming in and living beside you, rotating, and the impact of somebody on vacation—it impacts the quality of life,” she said.
Learn more about Sechelt’s approach at sechelt.ca.