On West 28th Avenue in the Riley Park area of Vancouver, a laneway house and basement suite are marketed as short-term rentals on Booking.com.
The entire 3,600-square-foot property, including the main house, is for sale, asking price $5.388 million.
The listing describes the one-bedroom laneway house and the three-bedroom basement suite as “mortgage helpers,” and when visitors tour the property, the agent quietly touts the two as bringing over $19,000 a month in revenue as short-term rentals.
Short-term rentals can earn an owner a lot more than offering the spaces as conventional long-term rentals.
Some housing observers are concerned that the appeal of those earnings is killing any incentive to provide long-term rentals and that short-term rentals can also lead to higher home prices, or at least higher asking prices.
“I would say people may be willing to pay more if they think they can generate incremental income from short-term renting,” said one housing observer, who uses the pseudonym Mortimer Duke.
He is the anonymous citizen researcher who posts on Twitter and has, over the past several years, identified hundreds of illegal short-term rentals and also ones that barely fall within the rules in the City of Vancouver.
Last week, Mortimer emailed Premier David Eby and Housing Minister Ravi Kahlon with an outline of how the market has changed and the types of regulations and enforcement he thinks are missing.
“When short-term rentals, such as Airbnb, first started, it was about renting your principal residence for a couple weeks a year while you were on vacation to help earn some extra money. However, over time, short-term rentals have morphed into becoming mini-hotel businesses, taking much needed long-term rental stock away from residents. The result is short-term rentals have only further exacerbated the housing shortage and affordability crisis in many major cities,” he wrote.
“There are too many loopholes, too many ways to get around the system, and too many people ignoring the rules,” he added.
The offences he sees include using invalid short-term rental licence numbers, illegal short-term renting of a self-contained secondary suite and/or laneway home, while the homeowner lives in the main house, illegal short-term renting of an entire house or self-contained suite full-time neither of which are the owner’s principal residence, illicit short-term renting in a strata building that does not allow short-term rentals, and illegal short-term renting of several rooms in a house that is not the owner’s principal residence.
He proposes banning short-term rentals for a period, such as five years, or until the vacancy rate reaches a certain level, such as five per cent or higher. He thinks the minimum fine for each violation of short-term rental regulations should be $25,000.
Mortimer has caught the attention of municipal politicians such as ABC Councillor Lenny Zhou, who in recent weeks has been meeting with city staff, community leaders, strata councils and Airbnb representatives. Zhou said that, in September, the city plans to add enhanced analysis tools to bolster enforcement.
The current fine for violating short-term rental regulations is $1,000 a violation. Zhou said the city lacks the authority to increase the amount.
In a statement, Kahlon said the province is developing legislation to address concerns around short-term rentals, which will be introduced in the fall.
“It is clear that local governments need additional tools to address the challenges they face around compliance and enforcement of local bylaws governing short-term rentals.”
Visitors to a recent showing of the West 28th property with the laneway house and basement suite pointed out the listing to Postmedia, as well as the stark contrast between the revenue potential of this property, at $19,000 a month, and that of a nearby laneway house geared toward long-term tenants, at $3,650 a month, plus utilities.
Layla Yang of Dracco Pacific Realty said the $5.388 million asking price of the West 28th property was based on comparable sales that took into consideration its location, its newer condition and ability to generate high income.
She described the owner of the property as a single parent who has been using the proceeds from the short-term rentals to raise her family.
“This is a free market,” Yang said. “I wanted to list it at a price that I, as a listing agent, believe it’s worth.”
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