Short term rentals causing harm in Qualicum Beach says planner

A report presented to Qualicum Beach town council found that short-term rental properties in the area were harming the housing market and driving up prices of home ownership and rentals. Photo: screenshot of Air BnB listings in Qualicum Beach.

According to a report by Third Space Planning, short term rentals in Qualicum Beach are harming the local housing and rental markets and making life less affordable.

Eric Swanson from Third Space Planning presented the findings to the town council on February 28.

“Turning to impacts on the town's housing market, we assess short term rentals are largely bringing harm,” he said. “This is because while a small minority of residents may benefit from being short term rental operators, this activity has been shown to decrease housing availability and affordability for both prospective owners and renters market wide.”

Swanson said that short term rentals are directly impacting affordability for renters in the area and currently make up between six and seven percent of rental housing in the town.

Swanson told council that renters in Parksville-Qualicum Beach have paid $15.6 million in additional rent between 2016 and 2021 “as a direct result of commercial short term rental activity” and that rents went up by $400 between 2021 and 2022 due to the impact of short term rentals.

According to the report there were a maximum of 106 to 117 short term rental units available on any single day in 2022, which is equivalent to 61 full-time hotel rooms. Of those, 36 to 41 short-term rentals were not on the owner’s primary residence, which the new provincial Short-Term Rental Accommodation Act prohibits starting on May 1.

With a zero percent vacancy rate, about one in five households in Qualicum Beach are in some sort of housing need, said Swanson. The average cost of a single family home has increased by 156 per cent between 2012 and 2022 while average rent was 31% higher in 2021 compared to 2016.

“That increase there includes units that have been subject to rent control that entire time,” he said. “So the increase in market rents, so new tenancies has undoubtedly been much higher.”

Questioned by Councillor Scott Harrison about the methodology of the report, Swanson explained how Short Term Rentals impact the housing market.

“As you decrease the supply of units by converting homes into short-term rental guest accommodation, supply decreases,” he said. “If demand remains the same and supply decreases then prices go up.”

The second way that short-term rentals affect affordability according to Swanson is that landlords can make more money renting their units on a short-term basis, which drives up the value of homes.

Swanson estimated that if the town wanted to completely eliminate short-term rentals, it would need 40 units of traditional tourist accommodation such as condo-style hotel rooms to replace them in the tourism market.

Councillor Harrison mused that he would like to see the province create a parliamentary secretary for rental housing and also allow smaller communities to designate parts of their city exempt from the new provincial law.

“I maintain this to my dying day. It'd be lovely if they gave smaller communities, say under 25,000 or 50,000, the ability to designate five to 10 per cent of residential land as exempt,” he said. “So for us this would be the waterfront would be the logical place. There’s always been cabins where you go on vacation. For Parksville, Resort Drive, obviously. And then we're still 95 or 90 per cent of residential units in our community are still subject to regulation.”

Funding Note: This story was produced with funding support from the Local Journalism Initiative, administered by the Community Radio Fund of Canada.