Study finds Parksville short-term rentals raised cost of rent

Short-term rentals have raised the cost of rent in Parksville, according to a study commissioned by the Parksville Qualicum Beach Tourism Association.

The report by Third Space Planning found STRs resulted in an estimated 36 lost potential homes, or two per cent of the city’s housing stock.

“We found no statistical sense in which residential STR’s are needed,” said Eric Swanson of Third Space Planning in a presentation during council’s Dec. 16 meeting. “Most of your tourist accommodation is already condo style, so amenity rich and we calculated that if residential STRs just magically disappeared the city would still have had a surplus of units during the peak month.”

Third Place Planning conducted its study from June 2023 to May 2024, Swanson said, which covered approximately the 12 months before B.C.’s new provincial regulations came into effect.

STRs are more than twice as profitable as long-term rentals in Parksville’s market, he added.

“There is a strong financial incentive to convert long-term rentals into short-term rentals,” Swanson said.

The provincial government’s Short-Term Rental Accommodations Act defines short-term rentals as any accommodation provided for less than 90 consecutive days. It was tabled in October 2023 and is in force as of May 2024.

Third Place looked at STRs in “dwelling units” which the study defined as units intended for full-time residential use and not including units purpose-built for tourist accommodations.

It estimated the cost of rent went up by $400 in 2022, but Swanson added this impact is likely overstated because he is not confident the purpose-built vacation units on Resort Row were “successfully” sorted out of the equation. 

Tracking the number of STRs is difficult for several reasons, including the fact that units are “constantly switching on and off”, Swanson said. Parksville had 108 residential STRs at maximum during the reference period. 

“Total residential short-term rental activity — all of the availability during the year, was equivalent to 49 hotel/motel units,” Swanson said.

Data had to be “scraped” from third parties, he added, and most Airbnb and VRBO listings in Parksville are actually for what the city considers tourist accommodations and had to be manually excluded.

Immediately after the Short-Term Rental Accommodations Act came into effect, Third Place noted that 50 per cent of the listings disappeared, while 44 were still listed with a business licence and 10 were listed without one.

Based on other studies done across North America, STRs raise the cost of buying a home as well as rent, Swanson said.

“In this study we were trying to determine are residential short term rentals needed? And the answer we found was not particularly, no,” he said. “The vast majority of your prospective home owning households will not be taking advantage of this extra income gain and it will come at the cost of increased home prices and rents for everyone else.”

The situation in Qualicum Beach is different, as Third Place’s study found there is a hotel room shortage in that community.

Mayor Doug O’Brien mentioned that more and more people are living in RVs long-term in recent years, and asked if the impact had been studied yet.

“It’s a pending crisis. One more, just add to our list,” he said.

Blain Sepos, executive director of the PQBTA, said it’s a challenge to study campsites and RVs because they do not have as many data points, are not taxed in the same way and there is no third party data scraping service that can look at them.

“Although we know that there are people who are living in RVs in commercial RV parks within the city, that technically they shouldn’t be staying there more than 180 days, there’s really not an elegant way of measuring that, at least currently,” Sepos said.