Airbnb operator says he's facing losses of hundreds of thousands of dollars because of B.C.'s new short-term rental laws

Steve Nguyen runs two Airbnb units in a downtown Victoria apartment building, including one decorated and paying homage to the television show "Friends." He says he’s still reeling from the news he soon won't be able to operate it as a short-term rental – since he doesn’t live there.

“This news is a huge, huge shock,” he said Tuesday. “The equity that I’ve worked so hard for in these units has vanished in a day.”

Ravi Kahlon, B.C.’s housing minister, who tabled the new law Monday that imposes a principal residence requirement, said the rules don’t come into play for a few months.

“(The legislation) doesn’t come in until May 1, so individuals do have some time, whether they want to rent them out for long-term or whether they want to sell them,” said Kahlon Tuesday.

Nguyen says he makes enough by renting out his unit on Airbnb to cover its mortgage – even with interest rates spiking – but because the unit is so small (less than 400 square feet), it’s not attractive for long-term rentals, and wouldn’t fetch enough to cover his mortgage, which is more than $3,000 a month. “You cannot make the numbers work – you’re better off putting your money in a GIC.”

As a result, he says he's forced to sell the loft unit, but plans to list it for $150,000 less than he bought it for a year ago – its value walloped because in a matter of months, it will no longer be useable in most cases as an Airbnb,

“The revenue stream dictates the value,” he said, noting that revenue stream will soon dry up for short-term rentals – which had been earning him between $80 and $225 per night.

The new rules – aimed at creating more long-term rentals – are also causing concern in the hospitality industry. Ian Tostenson, head of the BC Restaurant and Foodservices Association, worries there won’t be enough hotel rooms to cover demand in Victoria and Vancouver once many short-term rentals disappear.

“In the worst-case scenario. it would mean fewer people – fewer tourists – coming to British Columbia, in the big regions because they can’t get accommodation,” said Tostenson.

The government acknowledges potential tourism impacts of the proposed legislation, but calls it a balancing act – noting the spillover effect of the housing crisis on tourism itself.

“Restaurants can’t find employees because they can’t afford to live in a community,” said Kahlon.

Paul Nursey with Destination Greater Victoria says the city’s tourism industry supports the new short-term rental rules.

“People own two, four, six, 20, 40, 60 units, and that takes away from housing for our residents, including for our workers,” said Nursey.

But Nguyen – who has already laid off the staff he employees to keep the units clean – calls himself and his former staff collateral damage, as the province tries desperately to create more homes.