This B.C. city is using short-term rental tax funds to build affordable rentals for hospitality workers

Money collected from short-term rental taxes in Victoria, a city that has some of the highest rents in country, will be used to fund affordable housing units that will prioritize hospitality workers. 

At a meeting on Sept. 7, Victoria city council unanimously agreed to allocate $2.5 million from its housing reserve fund — which includes tax revenue collected from online accommodation platform bookings such as Airbnb — for the non-profit Greater Victoria Housing Society to build an apartment building with 40 units of affordable workforce housing.

"We're getting all sorts of attention from all over B.C. and Canada because it is dedicated workforce housing in the city, which is quite novel," Paul Nursey, CEO of Destination Greater Victoria, told CBC's All Points West. "It's taxation with a purpose and a plan that's being executed."

The project will cost about $18 million overall and the rest of the funding will be acquired by the housing non-profit through grants and loans from the Canada Mortgage and Housing Corporation.

It's a move that has been lauded by workers and experts alike, and one that can't come fast enough for Aaron Walters, a server at a downtown Victoria hotel restaurant. 

For the past year, Walters has been splitting a two-bedroom apartment with two roommates to afford rent, which costs him half of his pre-gratuities income. Now that the roommates are going their separate ways, Walters is about to move into a $2,100/month one-bedroom that will cost his entire paycheque.

"I'm basically going to have to live off [gratuities] and most likely get a second job," said Walters, who works the breakfast and lunch shift at Aura Waterfront Restaurant and Patio. "It's absolutely insane."

As of last year, the Canadian Centre for Policy Alternatives found that Victoria is one of 27 urban centres across Canada where there are no one- or two-bedroom units that would be affordable for a full-time minimum-wage worker.  

The move to build affordable workforce housing specifically for hospitality workers is a first in Victoria, and one of the latest initiatives answering a need for more purpose-built rental housing in Canada.

According to the latest report from the CMHC, the country still needs to build 3.45 million new homes by 2030 to properly address the supply shortage. 

Walters said finding a place to rent is particularly challenging 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's almost impossible to prove what we make [as a server]," he said. "Some places will just look at what the net is of your paycheque coming in, and you just don't hear back from them."

After a six-week search, he found an apartment that will cost far more than what he can afford, but one he could rent  because the landlord had dined at his restaurant and "saw eye to eye" with his situation. 

Once the 40 units of workforce housing are built — which Nursey estimates will take three years to complete — about one-third of the building will have rent capped at 80 per cent of market value.