HomeMy WebLinkAboutWhitman, Guy
Tsuneda, Kaci
From:Guy Whitman <gcwhitman@outlook.com>
Sent:Friday, August 7, 2026 11:01 AM
To:Council Testimony
Cc:Darrow, Jeffrey W.
Subject:Proposed amendments to Bill 147 re STVRs
Good morning. My wife and I live in Victoria, BC, Canada. For many years we have owned a condo unit in the Kona
Pacific development on Walua Rd. In Kailua-Kona, which we make available for vaca?on rental through a local property
management firm when we are not using it. At present this is a lawful use under exis?ng local laws, but I understand
changes are contemplated to Bill 147 which will remove vaca?on rentals as a permi?ed use in Kona Pacific, among other
proper?es in Kailua-Kona. I understand that under the proposed changes, we would be en?tled to a non-conforming
use cer?ficate as the present owners, but anyone purchasing the unit from us would be unable to con?nue vaca?on
rentals. Somewhat similar restric?ons have been enacted in Victoria and other Bri?sh Columbia ci?es a couple of years
ago. It might be helpful to Council to hear the result of those restric?ons here, since Victoria is somewhat similar to
Kailua-Kona in that tourism is its main industry, aside from government and real estate development.
Some 2 years or so ago, reac?ng to a shortage of rental accommoda?on caused by excessive immigra?on, our provincial
government enacted legisla?on prohibi?ng vaca?on rentals in several ci?es and larger towns in BC. Unlike the
contemplated changes to Bill 147, this prohibi?on was immediate and complete, the only excep?on being a suite in a
private residence which (depending on municipal bylaws) may s?ll be used as an STVR for a limited period each year. In
making that decision, the government relied heavily on a study commissioned by the BC hotel industry which concluded
that the long term rental shortage would be considerably ameliorated by elimina?ng STVRs, thus forcing investor
owners to switch to long term rentals or sell their units. It was es?mated that some 1600 units in Victoria alone would
be released for those purposes.
The results a?er a reasonable period are as follows:
Hotel room rates increased drama?cally in the communi?es subject to the new restric?ons, in some case up to
100%. Other factors such as general infla?on and an increase in Canadians travelling within the country have
probably contributed to this increase, but the main factor has been the sudden shortage of accommoda?on for
travelers and tourists.
Long term rents have stopped increasing, but have not significantly reduced. Because other factors
contributed to this change, such as a drama?c increase in mul?-unit rental construc?on caused largely by
government financial assistance, and a substan?al decrease in new immigra?on, it is difficult to say how much of
the change is due to STVR prohibi?on.
A significant minority of mul?-residen?al building units, having been designed specifically for investors to rent as
STVRs, are too small to be a?rac?ve to most purchasers or renters, being approximately the size of a small hotel
room, so these do not help the rental accommoda?on shortage. This may not be as much of an issue in Kailua-
Kona.
In Victoria at least, there is now a substan?al shortage of hotel rooms. In recent delibera?ons, our city planners
have advised our city council that Victoria is now short approximately 2000 hotel rooms. Council are now
planning to rezone parts of the city for substan?ally increased density, and to offer a 10 year complete remission
of property taxes to any new hotel construc?on or renova?on project, hoping to encourage new hotel
construc?on and the expansion of exis?ng hotels. This represents a substan?al loss of income to the city,
because in BC property taxes are the only tax municipali?es are allowed to levy so they rely en?rely on such
taxes to provide services, including the increases in basic services required by any increase in hotel
accommoda?on. The staff report to council on this proposal noted that such a tax remission program would
have the effect of shi?ing the resultant tax burden (es?mated to be tens of millions of dollars) onto exis?ng
1
proper?es. This will not encourage businesses to locate or remain in the city, exacerba?ng the current (for
other unrelated reasons) flight of independent businesses from the downtown area.
Many individual investor owners of smaller STVRs who purchased units within the 2-3 year period prior to the
change, have lost their investments and are le? in debt when the value of their units declined by 30-35%,
causing serious hardship. For example, our local newspaper highlighted the case of a nurse who had invested
her re?rement savings in 3 STVR units intending to fund her coming re?rement with the income, only to find her
savings wiped out by the immediate deprecia?on of her suites.
I am providing this informa?on in the hope that knowing the results of similar governmental ac?on in other places will
be of assistance to council in your delibera?ons. Although the proposed amendments to Bill 147, as I understand them,
will result in a phased withdrawal of STVRs from the marketplace, rather than the immediate aboli?on that took place in
Victoria, it is reasonable to assume that the end results will be similar.
All of which is respec?ully submi?ed.
Guy Whitman
2