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Vacation rentals down by 36% following District of Squamish bylaw

About one year since regulations were imposed, Airbnb-type rentals have fallen.
The goal of controlling vacation rentals is to increase more rental properties for locals.

Roughly a year since the District of Squamish implemented its short-term rental regulations, there has been a 36% decline in Airbnb-type rentals.

On Jan. 11, municipal staff provided an update to council on the program, and they noted the number of vacation rentals in town has dropped to 140 as of December 2021.

In the first quarter of 2021, that number was 220.

A staff report says that the number of vacation rental search results for suites have halved to 50 results in late 2021, down from 100 in the first quarter of that year.

Secondary suites were banned from being rented unless the host acquired a special exemption through a temporary use permit (TUP). The District allowed up to 30 of these permits to be active at any time, but not all 30 applications were taken.

Staff say it's unclear how many of those suites have actually returned to the long-term rental market.

Decreases in short-term rental suites correspond to an increase in occupancy rates, as there were less vacation rentals to go around.

On this point, Tourism Squamish and the Squamish Chamber of Commerce wrote in a letter to council that it was uncertain whether the reduction in vacation rentals has helped the housing crisis, though it is likely damaging the local economy.

“While it is unclear whether the District’s regulations succeeded in increasing long term rental supply, it is clear that the regulations had a significant negative impact on the tourism industry and on the supply of visitor accommodations in Squamish,” they said in the letter, dated Jan. 5.

“Both occupancy rates and prices of STRs and hotels have increased. Once these high levels of occupancy are reached, there are fewer options available for a visitor’s preferred unit types, rates, and dates. With reduced inventory, there is the risk of displacement to other destinations.”

The two organizations also expressed opposition to the current short term rental regulations, especially the stipulations that ban secondary suites and carriage homes from being rented out.

Currently, with limited exceptions, hosts are only allowed to rent out their principal residences — the places where they live most of the time.

The two organizations said that the current rules favour the affluent and can put women and marginalized people at a disadvantage.

“We are also concerned that the District’s current regulations discriminate against lower income and female hosts by creating structures that undermine their inclusion in the market. In particular, the current policy of supporting hosts to rent their principal residences means that affluent hosts who have a second residence can continue to operate with few limitations,” reads the letter.

“More flexible hosts can live in their secondary suites or carriage houses while renting their principal residence. This is less feasible for others, such as those with larger families. Moreover, the removal of the right to rent secondary suites means that hosts might choose to remove separations between them and the strangers who rent their rooms. This brings the property into compliance with the regulations on STR, but may also put women, the elderly and other marginalized individuals in danger.”

Back at the District meeting, planners also spoke about issues of compliance.

District planner Aja Philp said that only 64 of the 140 active vacation rental units have a business licence, which equates to a compliance rate of only 45%.

"This rate is lower than in other B.C. municipalities that staff have researched," said Philp.

"But we expect this rate to improve throughout 2022, as staff have not yet worked their way through our full list of identified non-compliant operators. And if we don't see improvements in Year 2, we'll certainly examine the potential  barriers to compliance."

However, when it comes to enforcement, 73 of 84 properties — over 87% — that received warning letters later took steps to comply with the bylaw.

Philp also added that the host compliance monitoring service, Granicus, which is a third-party contractor hired by the municipality, appears to be doing a sound job.

She also noted that vacation rental sites like Airbnb and Vrbo have not been willing to work with the District on enforcing compliance with the local bylaw.

"This issue has been brought up with many other B.C. municipalities and also with the UBCM and it could be elevated with advocacy," Philp said.

For the next steps, she said staff should monitor secondary suites and non-principal dwellings, like investment units, to see if there's an increase in the long-term rental market.

"A key measure of success of the [short term rental] program is impact on the long-term rental market," said Philp. "However, it's very challenging to isolate the specific impacts of the [short-term rental] regulations because there are so many other factors that influence the long-term rental market."

She also floated the idea of creating a prohibited buildings list where stratas have banned Airbnb units.

Staff recommended continuing with the current short-term rental regulations and monitoring.

They also recommended processing an additional 18 temporary use permits that would provide exemptions for people seeking to put vacation rentals in prohibited secondary suites and accessory dwellings.

The municipality still hasn't distributed the maximum 30 TUPs for this purpose, and the additional 18 permits would reach that cap.

Council voted unanimously in favour of staff's recommendations and also provided some comments.

Coun. Armand Hurford said he was surprised that not all 30 permits were distributed at this point.

"I thought there would be a greater demand for these TUPs," he said.

Hurford said the intake window for applications seemed a bit short, and asked if it was possible to increase the time for applications.

The municipality was accepting TUPs for three and a half weeks last year.

Mayor Karen Elliott said that she would like to see proper monitoring for the costs and expenses of the program to ensure it breaks even.

She said she was also heartened by the increase in vacancy rates in town.

According to a staff report, the Canada Mortgage and Housing Corporation (CMHC) reported a 1.4% vacancy rate for 2020, in comparison to 0.3% in 2019

Coun. Eric Andersen said it would perhaps be useful to have a general report on tourism accommodations to better inform future decisions.

"We might be well served by a more general review of needs and opportunities in tourism accommodation," Andersen said.


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