Money raised from taxes on short-term rentals in Victoria, a city that has some of the highest rents in the country, will be used to fund affordable housing units that will prioritize hospitality workers.
At a meeting on September 7, Victoria City Council unanimously agreed to allocate $2.5 million from its housing reserve fund (which includes tax revenue collected from bookings on online accommodation platforms such as Airbnb) to for the nonprofit Greater Victoria Housing Society to build an apartment. building with 40 units of affordable housing for workers.
“We’re getting all kinds of attention everywhere in British Columbia and Canada because this is dedicated workforce housing in the city, which is pretty novel,” Paul Nursey, executive director of Destination Greater Victoria, told CBC. All points West. “They are taxes with a purpose and a plan that is being executed.”
The project will cost about $18 million in total and the remainder of the funding will be acquired by the non-profit housing organization through grants and loans from the Canada Mortgage and Housing Corporation.
It’s a move that has been praised by workers and experts alike, and one that can’t come fast enough for Aaron Walters, a waiter at a downtown Victoria hotel restaurant.
For the past year, Walters has been sharing a two-bedroom apartment with two roommates to pay rent, costing him half of his pre-tip income. Now that the roommates are going their separate ways, Walters is about to move into a $2,100-a-month one-bedroom apartment that will cost him her entire salary.
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“Basically I’m going to have to live on [gratuities] and I’ll most likely get a second job,” said Walters, who works the breakfast and lunch shift at Aura Waterfront Restaurant and Patio. “It’s absolutely crazy.”
As of last year, the Canadian Center for Policy Alternatives found that Victoria is one of 27 urban centers in Canada where there are no one- or two-bedroom units that are affordable for a full-time minimum wage worker.
The move to build affordable workforce housing specifically for hospitality workers is a first for Victoria and one of the latest initiatives to respond to the need for more specifically designed rental housing in Canada.
According to the latest CMHC report, the country still needs to build 3.45 million new homes by 2030 to adequately address the supply shortage.
Staring down the barrel of high rents
Walters said finding a place to rent is particularly difficult for service industry workers who rely on tips for much of their income, which is why workforce housing is particularly important for people like him.
“It is almost impossible to prove what we do [as a server]”, said. “Some places just look at what your net paycheck is and you just don’t hear back from them.”
After a six-week search, she found an apartment that would cost much more than she could afford, but that she could rent because the landlord had dined at her restaurant and was “ok” with her situation.
Once all 40 workforce housing units are built (which Nursey estimates will take three years to complete), about a third of the building will have rent capped at 80 percent of market value.
According to Virginia Holden, chief executive of the Greater Victoria Housing Society, this means studio units will charge $900 a month, while two-bedroom units will cost up to $1,300. The other 70 percent of the building, she said, would be priced around $1,500 for studios and up to $1,900 for two-bedroom units.
“You’re looking at $1,800 a month for a one-bedroom home,” Holden said. “If you were new to Victoria or needed to move housing, that is simply not sustainable with available wages. [The hospitality] “The industry has really been struggling to find accommodation.”
Once built, the units will be managed by the housing society while Destination Greater Victoria, the local tourism crown corporation, and hotel associations will spread the word to their members.
In Victoria, short-term rental tax funds had been earmarked for workforce housing through an agreement between Destination Greater Victoria and the City of Victoria that was signed in 2018. This money has been flowing into the city’s reserve fund. city housing during the past. five years.
Smaller, more tourism-dependent communities, such as Whistler and Tofino in British Columbia and Banff in Alberta, have dedicated organizations whose purpose is to build or find affordable housing for people who work in hospitality.
In Victoria, which has a much larger population, this is the first time a non-profit housing organization has partnered with the city and tourism board to use provincially raised tax funds to create workforce-specific housing , while the rest of the funding comes from the federal government. CMHC. Therefore, these 40 units will involve all levels of government partnering with a non-profit organization.
How hospitality workers will be prioritized for these rentals in Victoria is under discussion, but there are steps they can take.
“This is being done in Whistler and Tofino, so there is already a proven approach here,” Holden said. “But in terms of fleshing out what it will mean to prioritize [hospitality workers]”We’re still working on that with Destination Greater Victoria.”
Federal Housing Minister Sean Fraser says the government is considering setting aside federal land to build rental housing as Canada’s housing crisis intensifies. Ottawa can also eliminate GST on affordable housing projects. Conservative Leader Pierre Poilievre has relentlessly criticized the Liberal government for its inaction on Canada’s chronic housing shortage.
The affordability problem
At the September 7 Victoria council meeting, several councilors praised parts of the proposal – the idea and proximity to a transit and services hub – and some raised their desire to see more than 40 units of affordable housing for the force labor.
“For the next project related to hotel and hospitality workers, we would probably like to see a little more scale,” Coun said. Jeremy Caradona.
“I would really love to encourage affordable housing providers to think much bigger and bolder,” Coun said. Dave Thompson.
The proposal had been in the works for several years, but faced delays as a result of rising costs, Holden said.
“Unfortunately, developers, nonprofits and anyone who has tried to build housing in recent years have been really challenged by high construction costs and rising interest rates.”
The average monthly cost of renting a home in Canada surpassed $2,000 for the first time in November, according to a report released Wednesday.
The cost of building affordable rental housing is an issue that requires federal financial reforms, according to a group of housing experts, advocates and industry representatives across Canada, authors of a report titled A multi-sector approach to ending Canada’s rental housing crisis which was released last month.
Prime Minister Justin Trudeau announced Thursday that the federal government will act immediately on one of these recommendations, get rid of gst on the construction of new rental apartments.
Other reform ideas in the report include creating a tax credit for developers investing in community rental units and offering fixed-rate financing through CMHC or the Canada Infrastructure Bank on rental construction.
“If the person who serves you a cup of coffee in the morning can’t afford to live in the neighborhood near that coffee shop, we have a problem, and municipalities understand that,” said Ray Sullivan, executive director of the Canadian Housing and Renewal Association and co-author of the report.
“This partnership between the City of Victoria and the Greater Victoria Housing Society is the type of affordable rental housing we need to see across the country.”
He echoed the report’s findings and said the federal government must take charge of financing and reforming the housing market.
Regardless of how it happens, Walters hopes to have more rental stock that isn’t impossible to afford and obtain.
“It would mean some real quality of life,” he said. “I could spend my money on my kids instead of just working to pay the rent.”
