A listing for a $1.1 million, two-bedroom condo overlooking Victoria’s famous harbour describes it as “a perfect investment opportunity.” The unit, the listing explains, is in a building that allows owners who don’t live there to rent their apartment on Airbnb — a use that Victoria officially banned five years ago.
Another listing in the same building proclaims its short-term rental potential in the second sentence, before listing a single fact about the unit besides its square footage.
The building is called the Janion, and it’s a hotel. It’s not a hotel, but for all intents and purposes, it’s a hotel. Ricochet was able to identify more than 60 Airbnb units among the Janion’s 111 total units — a number that is almost certainly an underestimate.
“Basically no one lives there,” explained one of the few condo owners who lives full-time in the building. He asked that his name not be used for his privacy in a building where most of his neighbours operate Airbnbs. He said he knows of just a handful of others who actually live there; for him, far more common than waving to a neighbour is watching a tourist wheel a suitcase through the door.
Angela Mason and Ryan Sawatzky own a cleaning business for Airbnbs, as well as the most obvious symbol of the way Airbnb has taken over downtown: an entire brick-and-mortar business they opened to service them on the busy Pandora Ave. The storefront, called AirLobby, acts as a kind of concierge for guests of the buildings that have been converted into Airbnb hotels downtown, offering bag storage, key dropoff, and even tips on activities and restaurants.
It’s less than a block from the Janion, where Mason and Sawatzky themselves also operate several Airbnbs. All told, their short-term rental operation sprawls across 11 buildings, all above-board. According to data from Inside Airbnb, by some metrics the two operate more short-term rentals than any other person in the city. Sawatzky declined, on the company’s behalf, to comment for this story, saying in a text message that managers like him and Mason have been scapegoated and painted as villains.
For a city that banned short-term rentals of anything but the owner’s principal residence in 2018, it may be surprising to note that this use is completely legitimate, all because of three words: legal non-conforming. Commonly known by the unfortunate common name, “grandfathered in,” after white supremacist American voting laws, legal non-conforming units are those that have been allowed to keep operating based on an existing use that predates the ban. Anyone who had a short-term rental in operation when the 2018 bylaw came into effect is effectively exempt from the bylaw.
The City of Victoria insists the Local Government Act (the provincial law that governs how municipalities are allowed to regulate land) obliges municipalities to allow legal non-conforming uses, in perpetuity, when they change local bylaws. It has meant Airbnb has continued without a hiccup in the municipality as though there were no ban at all.
City councillor Dave Thompson was not part of the council that enacted the new bylaw in 2018, but when he started considering a run for council in 2022, he dove into the short-term rental debate. It didn’t take long for him to arrive at a remarkable, and common, conclusion: “The ban didn’t work because of the grandfathering.”
‘Basically no one lives there’
The Janion was first built as a hotel. That was more than 130 years ago, in 1891, and it only operated for less than a year before tumbling from owner to owner and use to use. It eventually sat vacant for 35 years until 2012, when Vancouver-based developer Reliance Properties bought it for $2.49 million with the intention of turning most of it into “micro-lofts,” units as small as 250 square feet.
The developer soon brought the proposal to city council, where councillors and supporters alike spoke about the need to bring new residents downtown, and how the newcomers would revitalize the neighbourhood.
A City of Victoria spokesperson explained that at the time, it was clear what the intention for the building was — “It was understood that the Janion would be used partly as a short-term rental,” she said — but there is no record in meeting minutes of any mention of short-term rentals or Airbnb in the council’s deliberations.
Newspaper clippings from the time also point repeatedly to the desire to bring new residents downtown — not to create a hotel.
“The aim is to create affordable housing in the Janion,” said one article in the Times Colonist from June of 2012, attributing that aim to Reliance Properties’ president and CEO, Jon Stovell. Former Victoria mayor Lisa Helps also expressed excitement at its potential to “address affordability.” Helps declined to comment for this article due to her current role in housing with the provincial government.
News reports from the time note that people camped out overnight to secure a spot, but it wasn’t filled with young people reaching for the first rung on the housing ladder. Almost every unit quickly became a short-term rental, and in short order, the Janion had become a hotel again. The luxurious suites that face the bridge with floor-to-ceiling windows sit empty and lifeless, plastered with sterile HomeSense decor and bare balconies.
The Janion is just one of the buildings known to be awash with short-term rentals. Condo buildings like the Hudson, the Union, and the Waterfall Building are full of them as well, while real estate listings for the ironically named Cityzen on Herald Street read eerily similarly to the Janion: “Modern revenue property in Cityzen, one of Downtown Victoria’s best Airbnb buildings!” one reads.
The requirement to preserve legal non-conforming uses has acted to keep hundreds of homes, in their entirety, off the housing market in the city of around 90,000 people. A McGill University analysis of short-term rentals’ impact on the Victoria housing market found monthly downtown rents are expected to rise a staggering $322 higher in 2023 because of short-term rentals. That’s if you can find one: A recent search on the rentals aggregator Padmapper showed there were two apartments, total, listed for long-term rent across all of downtown Victoria.
Thompson believes returning short-term rentals to the market would ultimately not be enough to substantially lower the cost of housing — he points out that the city is short about 10 times the number of full-time short-term rentals. But “according to this study, it would significantly reduce rents in the downtown area,” he said.
Regardless, it will be next to impossible for short-term rentals within those condo buildings to lose their right to operate. According to the law, the legal non-conforming status is lost if a unit is not used for that purpose for six consecutive months. The way Victoria has interpreted the provincial law, if any single unit in the building is rented as a short-term rental, the whole building retains its status.
Thompson said he was “shocked” to learn that’s how the law works, and his fellow councillor Susan Kim feels the same way.
“I think it’s a huge policy gap that was just not thought through enough,” Kim said. But she understands why people would be drawn to rent out their place on short-term platforms. “I don’t think we can disregard how incredibly tempting it is to do this.”
It’s not only the bigger buildings. Legal non-conforming use also lets units in smaller buildings across the city off the hook. In all, according to tracking website Inside Airbnb, there are 630 entire homes or apartments listed in Victoria that have been recently booked, roughly matching the number of licenses given out by the city for non-conforming uses. Of that 630, according to Inside Airbnb data, 368 are operated by people with multiple listings.
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More than a quarter of Victoria’s Airbnbs are operated by people who have 10 or more, which fits a pattern of industrial-scale operations; between 2018 and 2022, the McGill report found, nearly 8 in 10 active listings were entire homes or “ghost hotels.” Nearly half of the operators don’t live in Victoria.
The City of Victoria recently raised its license fees for the non-principal residence short-term rentals, and the fines for non-compliance. It has also grown its enforcement team, and is issuing record numbers of fines, after the city took significant heat over a lack of enforcement last year. But a bigger step would be to remove them altogether — and some municipalities have done just that.
Not all municipalities that took action to tamp down the effects of short-term rentals have allowed existing ones to persist. Richmond, B.C., next to Vancouver, has outright banned Airbnbs in non-principal residences and severely restricted them in other cases too. Councillor Alexa Loo said there’s been no pushback to the lack of allowance for legal non-conforming uses.
“We’re not doing that,” she said. “So I don’t know what Victoria is doing. … We haven’t heard from our legal department that anyone’s fighting us on this and demanding that they should be allowed.”
The city’s spokesperson, Clay Adams, confirmed in an email that Richmond’s bylaws don’t allow any legal non-conforming short-term rentals. “Non-compliance is non-compliance,” he said.
The critical difference between Richmond and Victoria is that Victoria had a bylaw that allowed short-term rentals before it banned them. That previous legal use persisted after the new bylaw came into effect.
There’s evidence that not allowing short-term rentals outside of a principal residence is a good step to take. The McGill report credits Vancouver’s outright banning of short-term rentals in non-principal residences with lowering the impact on the city’s housing market. But Vancouver, which has its own charter, is not bound by the Local Government Act when it comes to things like legal non-conforming uses.
The provincial government is working on legislation, due in the fall, that it says will address short-term rentals. A spokesperson for the housing ministry declined to elaborate on what the legislation might contain — but Thompson is hoping it might take on the legal non-conforming requirement.
“It could be, presumably, with some careful legal drafting, phased out,” he said.
Kim notes that it would hurt some investors and managers — people like Sawatzky and Mason — who may be counting on the income for their livelihoods. But that’s a “defensible” tradeoff, she said.
There could be another, unintended, consequence to tinkering with legal non-conforming land uses: when the city rezoned huge swaths of land in the 20th century in order to prevent construction of apartment buildings, apartment buildings that already existed could legally stay in those neighbourhoods, based on the same principle as the short-term rentals remain today.
Some of those old buildings have become local gems that stand as reminders, in a crushingly expensive city, that we used to build homes for residents to live in — not only as investments.
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