Illegal vacation rentals are impacting our community!

Illegal vacation rentals are impacting our community!

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Illegal vacation rentals, which have proliferated after a wave of digital tools such as Airbnb enabled easier online connections. Photo: Pixabay

Story: Revelstoke Mountaineer staff
Sponsored by: Revelstoke Accommodation Association

Strike up a conversation with anyone who’s tried to find rental housing in Revelstoke recently and the topic of illegal vacation rentals is bound to come up.
Rental housing, specifically affordable long-term and employee housing, has become a rarity over the past 10 years. Prior to Revelstoke Mountain Resort opening in 2007, it wasn’t uncommon to rent a two-bedroom apartment in town for less than $600 a month. Today, landlords and homeowners are capitalizing on the popularity of Revelstoke’s status as a resort town, and rent for a two-bedroom can range upwards of $2,500 during the winter months. To top that off, a number of homeowners and landlords have decided to cash in on the benefits of offering their homes as vacation rentals.

A larger problem created with an abundance of illegal vacation rentals is the impact it has on market rental housing. It’s something Dan Berg, general manager of Jacobson Ford, is all too familiar with. Berg spent his first month in Revelstoke living in a motel room. After the first month, Berg would up finding a place to rent – but it was a vacation rental. He was paying $600 a week and didn’t know from one week to the next if he’d have to move out. “I had quit my job of 14 years, listed my house for sale in Kamloops and was changing my life to come here,” said Berg, who did find rental housing but at a cost. He’s currently paying more than $2,000 per month for his condo. The housing crunch has also had an effect on keeping employees at Jacobson Ford. Recently, Berg decided to get creative and posted an ad on Facebook offering $1,000 finder’s fee to any landlord who was willing to house a new employee for 90 days. They didn’t receive a single offer of housing.

Mike Gravelle, owner of Skookum Cycle and Ski, also knows the hardships of trying to house employees. A year and a half ago Gravelle ended up renting a duplex for his employees.

“It was strictly to secure housing,” he said.

Clyde Newsome from the Powder Springs Inn is currently housing four of his staff members in would-be revenue generating rooms at an impact of $150 per day per room in order to ensure adequate staffing in housekeeping and service roles.
Securing employee housing isn’t the only impact illegal vacation rentals have had. Long-term affordable rent has also been impacted. Community Connections social justice advocate Cathy Girling says there has been a noticeable increase in the amount of rent being charged and a decrease in the number of units available.

“The search for a new place to live is getting increasingly harder for renters. We [Community Connections] have noticed that tenants are staying in their units longer (as nothing else is available) despite the fact they are paying more than they can afford, or they are staying in units that are inappropriate in size or in poor condition,” said Girling.
With limited options, Girling said often tenants are willing to tolerate poor repairs, eat less or not access medications in order to afford the cost of rent. Individuals and families working service industry jobs are stretched to find housing within their budget, and they pay a high percentage of their income towards rent. Affordable rent is generally considered to be 30% of a household’s gross income, but Girling says they are hearing of renters who are putting up to 80% of their income towards rent.

Impact on infrastructure and public safety

Neighbourhoods in Revelstoke were never intended to be commercial enterprises. Even in mixed-use neighbourhoods, specific properties not zoned for commercial use should not be used as such. Homes being operated as illegal vacation rentals increase the impact on the city’s sewer and water system and creates issues if adequate off-street parking isn’t available. The lack of on-site management is also concerning as neighbours may not know who to contact if there is a noise or other type of complaint.

Vacation rentals often advertise for more occupancy than they have bedrooms, raising concerns over regulations about fire exits, inspections, and other safety issues. Illegal vacation rentals are not being subjected to fire and bylaw inspections, so they may not have bannisters, fire exits, etc. which exposes the guests to huge safety risks and the city to liability. Randy Driediger, general manager of RCU Insurance, says clients are not required to disclose if they have a vacation rental in their home when securing an insurance policy, but that lack of information can create problems if the homeowner needs to put in a claim related to that rental later on.

What is the City of Revelstoke doing?

To date, city staff primarily rely on a complaints-based system, although some proactive tracking and notification has occurred. As far as the local accommodation industry is concerned, city efforts fall much short of the mark. Peruse any popular online vacation rental platform and you’ll find about 100 illegal vacation rentals openly advertised. The Revelstoke Accommodation Association has been working with the city for the past five years to develop the bylaw and is frustrated with the lack of enforcement. To top that off, the city is missing out on revenue due to not enforcing and taxing short-term rentals in the community. The property tax alone would be significant as these illegal rentals are residences paying residential taxes when they should be paying commercial. The average value of a home in Revelstoke is estimated at $436,000. Property taxes on a home of that value for 2017 are $3,464, while the value if that same home is registered as a commercial enterprise is $11,527. By that calculation, this means the city is missing out on an additional $8,063 in taxes per home, based on the average-valued home.
Other cities in B.C. and Alberta have introduced fines for vacation rentals found to be operating illegally in those communities. In Canmore, it’s legal to operate a vacation rental in commercial and mixed-use areas, but not in a residential area. Fines for violators are $2,500 for the first offence, and $5,000 for each additional offence, which has significantly reduced the amount of illegal vacation rentals.

In Revelstoke, even those who have put in considerable expense and effort to become legal and licensed are not always supported by the city. Revelstoke Property Services has operated vacation rentals for the past several years. When the city introduced its vacation rental bylaw in 2014, the company made the decision to request their clients with vacation rentals go through the process of having them legalized. Eve Northmore, owner of Revelstoke Property Services said the process of legalizing a vacation rental requires a large commitment from property owners. “To set up a full vacation rental can be anywhere from $10,000 to $40,000. You’re adding parking … it can get expensive depending where you’re house is at. Now, you’re in debt,” she said. Northmore said in order to adhere to the city’s bylaw, vacation rental owners are required to have their homes at a certain standard before they’re even able to get to the point of being licensed. Many the vacation rentals managed by Revelstoke Property Services were able to get through the process of being legalized, but a number didn’t, leaving clients frustrated and angry.

Part of the problem with the city’s bylaw to help crack down on illegal vacation rentals is the bylaw is currently not enforced at all. “[The way] their licensing bylaw process works, but if you don’t enforce it, it doesn’t work,” said Northmore. “I believe in the system so adamantly and this is why we made the decision [to have their vacation rentals legalized]. It’s painful to tell owners this is what we can and can’t do to your property.”

What can you do?

The current complaint based system for illegal vacation rentals is only effective if people are contacting the city directly. Calling the city at 250-837-2911 or visit revelstoke.ca and click on the “See, Click, Fix” option at the bottom of the page. People having difficulty finding housing, or those being forced to live in accommodations with exorbitant rents or ridiculous crowding should also contact the city, and speak with the mayor and council to express their concerns.

“Illegal short-term rentals pull available rental units off the market, making the search for affordable rent even more difficult,” said Girling.

Those wanting to operate vacation rentals should familiarize themselves with the bylaws and processes in place, and understand they are committing to running a business. There is a niche market for vacation rentals in the community, but not at the cost of reducing the pool of long-term rentals and displacing people who are contributing to the economic and social fabric of the community on a yearly, rather than weekly, basis.

Overall, even those who aren’t concerned with the plight of illegal vacation rentals should be concerned about its impact on the social well-being of long-term residents. People who are forced to spend high amounts of their income on rent must spend less on other items such as healthy food, prescriptions, and other medical costs, transportation, clothing, and social activities.

“This has a strong impact on people’s lives, creating poor health and well-being. The whole community faces the consequences of this,” said Girling.

This article first appeared in the February issue of Revelstoke Mountaineer Magazine.