Beware of “same lot STRs” if housing is a top goal
By “same lot STR” [1] we mean entire-home rentals that are allowed in dwelling units where the operator does not live so long as they – or in some cases just a full-time resident of some kind – is living in another unit on the lot during the guest stay. For example, a garden suite STR/RGA with the owner living in the main building.
Sometimes these are called “hosted” STRs, but we’ve seen other labels, too.
In any case, this kind of permission seeks to distinguish between the most commercial units (pure investment properties with no full-time residents on site) and those with at least some kind of local resident connection. The pure investment properties are then prohibited or more strictly managed.
The idea here is that:
With an operator or resident onsite, same lot STRs come with fewer neighbourhood character impacts, and better built-in management of guest disturbances;
The revenue earned from these STRs flows into local residents’ hands (so long as the operator is in fact a local resident); [2]
You give local homeowners flexibility over the use of their units, so they feel less put out by the regulations;
While you’ll still get some degree of housing loss (e.g. as secondary suites, garden suites etc. are converted to STR), the housing loss won’t be as bad as allowing purely commercial operators; and
The housing loss that does occur at least contributes to local accommodation options (e.g. in places where existing hotels, motels, resorts etc. don’t quite cut it).
That all makes some sense, but our big note of caution is related to housing loss.
Secondary market rentals on low-density sites, including basement suites, garden suites etc. are often critical components of a community’s overall rental housing stock. They’re often ground-oriented, more likely to be located in quiet locations away from busy roads, and are often more affordable per square foot than newly-built primary market rentals. And they often comprise a significant percentage of a community’s rental housing stock, overall.
In detailed scans of listings for some communities, we’ve seen total numbers of apparent secondary suites/garden suites/accessory dwelling units – used as STR – that equate to 5, 10, even ~15% of the community’s total rental housing stock. [3]
That’s big-time housing loss, and even if the calculation above doesn’t produce a high number right now, if this kind of STR is allowed and there’s enough demand, the economic incentives will drive an increasing number of accessory suites to be built or converted to STR over time.
Our takeaway on this is that if your community has protecting housing as a top goal (higher on the priority list than things like homeowner revenue or encouraging residential guest accommodation options), this kind of STR/RGA is incompatible with that goal.
Things get tricky if your community does set housing as a top goal, but still could really use those accommodation units (when current commercial accommodation options don’t cut it). In this case, you can try a phased approach that grants time-limited permissions for more types of STR/RGA while you do the necessary planning to help commercial providers catch up.
[1] Or “same lot RGA”, if you go with our new favourite terminology.
[2] There are some variations on “same lot STR” permissions where you just need some kind of full-time resident on site, which could include a local renter with a non-local landlord. In this case, the revenue wouldn’t be flowing locally.
[3] If you want to do this calculation for your own community, take a sample of listings (or all of them if you can) and use the listing details and photos to identify units that are probably secondary suites, garden suites or other accessory dwelling units not occupied by the operator. Take the sum of these units and divide by the total number of assessed rental households/rental homes in your community.
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