A reader informed us in late summer of the most recent ‘sharing’ economy examples in James Bay, (one of the City of Victoria’s oldest neighbourhoods of almost 12,000 people), nestled between Beacon Hill Park and the capital’s Inner and Outer Harbours.
1. Lucrative Expansion of Short-Term Rentals
The City of Victoria has exploded re short-term rentals (Airbnb1): from 22 listings in 2011 to more than 1,045 in July 2017. This tracks closely the City’s recent growth of multi-storey condo developments.
James Bay, one of the City’s most desirable and walkable neighbourhoods, has a 14 per cent share of the lucrative alternative to the hotel accommodation market. Residential property owners are advertising 147 Airbnb listings for short-term rentals (representing a 16% increase over the same period last year.)
Aside from the handful of legally licensed bed-and-breakfast operators in James Bay, the remaining listings exist outside the City’s transient accommodation zone in the downtown area (which permits 1,700 short-term rentals in the core area, the only legal place to operate an Airbnb-type rental.)
While James Bay has seen an increase of 956 dwelling units from 2011 to 2016, this growth in the form of infill densification has resulted in 8.3 per cent (641 dwelling units) remaining unoccupied, according to the 2016 Census. Interesting to note, almost two percent of the total existing housing stock in the neighbourhood is currently dedicated to short-term rentals—in a very tight long-term rental market.
Tenants represent 69 per cent of all households in James Bay (2011 Census). Yet, a recent examination of rentals in the neighbourhood reveals that only 28 residential units are currently available in the long-term rental market.
In other words, short-term rentals in James Bay outnumber long-term rentals times five! The average Airbnb nightly rental in James Bay is now $137, compared to an average long-term nightly rental rate of $41. The short-term rental market range is $39 to $722 per night. Not hard to see why property owners might prefer renting their homes or private rooms to tourists, as opposed to tenants.
Not a healthy sign— that the number of available short-term rentals in the City exceeds the number of available long-term rentals by a factor of 5 to 1. When the rental vacancy rate is less than 0.5%, and even less in James Bay at 0.36%, the City’s is facing an affordable home crisis. The average monthly rent for a one-bedroom unit is now more than $1,200 (consuming 31.2% of the average monthly tenant’s expenses). Padmapper recently reported that the median rent increase for a one BR apartment in Victoria last year was 12.2% well above the rent control increase of 3.7 percent: a snapshot of the rental housing crisis affecting 59 per cent of Victoria households and almost 80 per cent of James Bay households.
2. New “Sharing” Opportunities On the Horizon
If property owners have the right to rent out their homes or pied-a-terres for a premium price, why not offer unused private parking spots to the highest bidder?
To date, the City provides no statistics on the total number of on-street parking spots in the residential areas; nor, figures for the number of off-street private parking spots offered by commercial and residential property owners—although they do have data for the downtown area.
Perhaps there’s an untapped gold mine in unused private parking spots in the neighbourhood. The average parking spot in apartment buildings varies between $15 in an open lot to $50 a month (underground). One entrepreneur advertised a private parking spot, close to the ocean and only a 20-minute walk to downtown for $80 a month (provided the vehicle was insured.) Lest everyone think they can cash in on this latest endeavour, let’s be aware that parking spot rentals are the purview of property owners only.
This supplementary “grey” income opportunity is another example of uneven rewards generated by an unregulated segment of the “sharing” economy. Like the City’s storm-water rebate program, taxpaying tenants are ineligible for these “rain rewards.”
Regrettably, few civic benefits exist for tenants. Most landlords refuse to permit pets in apartments; canine companion privileges in parks are available only to members of the dog-owning propertied social strata.
Tenants often face displacement if their building is demolished or renovated. Some are evicted by property owners who replace them with higher income short-term vacationers. And, if tenants do decide to rent again in their newly upgraded purpose-built residential property, they often face a 40-50% rent hike.
Living in paradise can be rewarding—especially for those with the right credentials.
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1Note: It is estimated that approximately 12% of all City of Victoria Airbnb listings are full-time, entire unit, multi-listings (representing the maximum commercialization and commodification of home sharing). This is 4 per cent more than the same sub-market segment in Canada’s major Airbnb markets in Vancouver, Montreal, and Toronto. (Source: Airdna.com (Aug. 2017), and “Short-term cities – Airbnb’s impact on Canadian housing markets”, David Wachsmuth et al, School of Urban Planning, McGill University, August 8, 2017.)
Mile Zero Mirror 