Owners of 22 former short-term rental units in Victoria have filed nine lawsuits against the province, arguing legislation limiting the strata units’ use amounts to expropriation and owners are due compensation.
The new lawsuits were filed in the Supreme Court of B.C. in Victoria last week.
Provincial rules banning most short-term rentals unless they are in an owner’s principal residence came into effect May 1, prompting an outcry from owners of strata units used for vacation rentals. Many bought their units as investments or to generate income when they were allowed to offer short-term rentals through online platforms such as Airbnb.
The province announced the new legislation in 2023, saying it would help to alleviate the province-wide shortage of affordable housing.
Close to 300 owners challenged the new rules in a separate court action earlier this year, leading to a judicial review in June in the Supreme Court of B.C. A decision has not yet been released.
As a result of the new legislation, some owners have sold units or rented them out on a long-term basis, which is permitted. Others use their units part-time and leave them empty for the rest of the year, David Langlois, one of the owners in the new group of lawsuits, said Wednesday.
The nine new civil claims said all the units are in central locations near tourism centres and considered desirable for travellers.
Those locations include 608 Broughton St., 760 Johnson St., 601 Herald St., 613 Herald St., 27 Songhees Rd., 1310 Waddington Alley, 751 Fairfield Rd., 409 Swift St., 528 Pandora Ave., 534 Pandora Ave. and 595 Pandora Ave.
Five of the cases represent owners with one unit each, one owner has two units, another has three, one has five and one has seven.
The units were either zoned for short-term vacation-rental use or were operating as legal non-conforming short-term-rental units prior to the new legislation coming into effect, the claims say.
Most units in the suit are small. For example, a unit at 409 Swift St. is 420 square feet and assessed at $360,000. Another at 595 Pandora Ave. is 532 square feet and assessed at $467,000.
A 601 Herald St. unit is 608 square feet and assessed at $527,000. A 433-square-foot unit at 1310 Waddington Alley is assessed at $461,900.
Owners have lost rental revenue and their properties immediately declined in value because of the new rules, the claim says.
All the claims say the units were purpose-built for short-term rentals and are not suitable for long-term residential use.
They were “designed based on permitted commercial use, constructed, financed and acquired at amounts that can not be maintained without that use.”
Owners are asking to be compensated under B.C.’s Expropriation Act for any drop in the value of their properties after the new rules came into effect.
The province has not yet responded to the suits.
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