Break STR dependency with the help of TUPs
One of the trickiest – and most common – situations we encounter is in small communities with both an ongoing housing crisis and a tourism economy dependent to some extent on residential guest accommodation.
This is usually because traditional hotels, motels and resorts either don’t exist, are outdated, are too expensive, don’t come with desired amenities, there simply aren’t enough of them, or some combination of all that.
This puts communities in a bind.
In an ideal world, your local government might prefer a situation where tourists stay in new or upgraded hotels, motels, hostels, resorts and the like (taking the pressure off local housing). But those commercial providers often can’t – or won’t – commit to those investments in a context of competing STR/RGA happening all over the place.
Here’s a potential solution:
Grant a number of Temporary Use Permits (TUPs) for dedicated RGA [1] that have a by-definition expiry date;
Charge highish fees for these TUPs and associated business licences (commensurate with their revenue potential and community impacts);
Use these fees to pay for supplemental planning work to help facilitate a diversity of high-quality, new and/or upgraded commercial accommodation. [2] Commercial accommodation providers have the certainty that the TUPs will expire at a certain date, increasing investment confidence;
Depending on governing legislation, renew the TUPs (e.g. for a final term) if more time is needed to bring the desired commercial providers to town;
When the TUPs expire for good, you’ll have eliminated the loss of housing associated with these RGA units, you’ll have [ideally] helped bring a bunch of new, great commercial/traditional accommodation options to town, and all without triggering a major shock to your broader tourism economy.
If this works, you’ll have broken your community’s tourism dependency on RGA, advancing both your housing and tourism goals simultaneously and without major, permanent compromise between the two.
If this fails (for whatever reason), at the time the TUPs expire you always have the option of cementing permanent permissions for the needed number and types of RGA going forward (e.g. in zoning).
[1] “Dedicated” as in RGA that takes place in dwelling units used exclusively – or largely – for that purpose, including same-lot RGA, as well as pure RGA/STR investment properties.
[2] When planning for new commercial accommodation it’s good to keep in mind the types of amenities and experiences that many visitors have come to expect from RGA (often including more space, privacy, neighbourhood flavour, an intimate feel and local knowledge passed down from hosts). Although commercial/”traditional” providers may be able to match some of these modern expectations, they won’t be delivering the exact same experience. BUT, that’s not the goal. The goal with this approach is to facilitate a sufficient number and diversity of high-quality commercial options that don’t involve the conversion/loss of residential dwellings. Different, but still great.
Looking for more help with your short-term rental regulations or enforcement program? Get in touch.
