Sharan and Stephen Gordon purchased a 300-square-foot micro loft in the Janion building in downtown Victoria four years ago as a retirement investment – to rent out short term and to stay in for significant periods of time when visiting grandkids in Victoria.
Sharan says the province’s new short-term rental laws – coming into force in May – have thrown the couple for a financial and emotional loop.
“I feel the rug was pulled from under my feet. I was given short notice.” she said Wednesday.
Ira Willey is a Realtor who owns a short term rental unit in a nearby building. He says approximately 90 per cent of the units in the Janion building are rented out short term.
It’s one of 23 buildings in Victoria where zoning exemptions currently allow short term rentals – zoning that purchasers paid more for.
“The premium that people paid for this Airbnb zoning – that short term zoning – it’s disappeared, and that was I’d say about 15 to 20 per cent of the property value,” said Willey.
As of May 1, those exemptions will be gone. The new rules will essentially restrict short-term rentals in urban centres to owners’ primary residences.
The pending changes have triggered a wave of owners wanting to offload their investments, but the units are too small for most people looking for long-term living, Willey said.
“(There are) probably close to 10 listings (in the Janion building) and nothing has sold since June,” said Willey, noting that throughout the city, out of 60 listings for units used for short-term rentals, only about five have sold.
Nancy Paine runs a short-term rental management business called Spacehost. She had 60 clients, most of whom owned just one rental property. Since the new legislation was passed this fall, she has been reduced to two clients, and is closing her business as of May. She says short-term rentals have been vilified in the news and by the provincial government.
“Consider these as small businesses, where people paid their licence fee, they paid their taxes, they did their research to buy these properties as a small business,” said Paine Wednesday.
But Douglas King with the Together Against Poverty Society says the housing crisis justifies lost investments.
“In this case, the government has prioritized those core needs – arguably the rights that people should have to obtain safe and secure housing – at the loss of investors, and in our opinion, that’s a move that has to be made,” said King.
Housing Minister Ravi Kahlon wasn’t available for an interview Wednesday, but issued a statement, noting: “We’re already seeing reports of former short-term rentals coming back to the long-term housing market, including both listings of former short-term rentals as furnished long-term rental homes, and short-term rental units that have been listed for sale since the province passed the legislation.”
So far, however, it appears most of those new lisitngs aren’t getting snapped up.