Cortes Island just passed a major hurdle on the road to adopting a 3% tax on short term rentals. In the first meeting of the new board, the Strathcona Regional District unanimously voted to write a letter of support, which will accompany the Cortes Community Housing Society’s application to the provincial government for a Municipal and Regional District Tax (MRDT). 

“We won’t know if it’s put in place until the province approves our application, but we’re hoping that it will be in place by  June or July of 2023,” said Sandra Wood, Executive Director of the Cortes Community Housing Society.  

Cortes Island’s new Director, Mark Vonesch, explained, “This is a tax that  affects all short term rentals on Cortes, whether you do that through Airbnb or other online platforms, or you rent your place out privately. It also applies to the ‘hotels’ on Cortes, which are the Gorge Harbour Marina, the Cortes Island Motel and Hollyhock. In order for this application to be submitted, you need at least 50% support from the ‘hotels’ on the island. We were really fortunate to have Hollyhock, the Gorge and the Motel all sign on. Part of my argument to the Regional District is, ‘Look, there’s the support from 100% of all the ‘hotels’ on Cortes!” 

If the Government approves the housing society’s application, people booking a short term rental anywhere on Cortes will pay a hotel tax. This will be collected by the ‘hotel’ or Airbnb, which sends it to the government, who passes it over to the Cortes Housing Society. 

Vonesch explained that he found housing was the #1 priority mentioned by most Cortes residents.

“We need more rental housing. We need affordable purchase options. If we want to maintain the culture of Cortes, we need to support our businesses and make sure that they have places for their workers to live.”

Wood added that the housing situation changes after tourists discover remote locations like Cortes Island. The Airbnb and vacation rental market is more lucrative than providing year round rental accommodation to locals. This has created a shortage of housing.

At their inaugural meeting on November 9, Vonesch told the incoming Strathcona Regional District Board that the proposed MRDT would help finance the Rainbow Ridge affordable housing project on Cortes Island. The Cortes Housing Society has already raised $1.6 million from the community and purchased the land. They want to build 24 one, two, and three bedroom units. There is a huge demand for affordable housing on Cortes, and 150 people are already on the waiting list for the 16 units that will be rented out at below market prices. The other 8 units will be used for professionals. 

“One of our challenges is that we have a clinic, but we don’t have places to put doctors and nurses,” explained Vonesch. 

He added while the Rainbow Ridge project seems ambitious, the Cortes Housing Society has already proven themselves. Units in the Senior’s Village which they completed in 2020 are currently being rented out for  $535 a month, or one-third of the tenant’s income.

“What I’m asking is that the SRD provide a letter of support for the application that we’re making,” he said. “My opinion is there’s zero risk to the SRD for writing this letter of support. The worst case scenario is that this application goes into the BC government, and they say, ‘Nope, sorry, we’re not going to implement it.’ Best case scenario, they’re going to say, ‘Yes. We’re going to raise an estimated $50,000 a year that’s going to provide a revenue for Cortes to put towards community housing.”

The new SRD Vice Chair, Ron Kerr, was quick to endorse the proposal, “Thank you Director Vonesch for bringing this to us. It sounds like a great initiative.  I think you presented it really well and I think this is an opportunity to really show what this board can do and not drag things on, but try and move them forward.”

 Incoming Area C Director, Robyn Mawhinney, agreed, “I love it. I want to add that I believe that the Cortes Island Housing Society is doing great work. They have land, a plan and community support. I fully support this community initiative. I think it’s an inspiration and a model, and I believe that a letter of support from the board fits within Strathcona Regional District’s vision statement, which is to lend support to individual community initiatives.” 

John Rice, the new Director of Area D, was more tentative, “Just curious if staff was able to provide more information, how long would that take?” 

Mark Baker the SRD’s newly elected Chair, said, “Our next scheduled meeting is November 20, in two weeks. What further information would you be looking for director?” 

Rice replied, “I don’t know anything about this. I would be a little bit more comfortable reading some more information about it. So if there are any known impacts, or any ‘gotchas,’ or anything like that,  just provide me a little bit more information before I make a decision.”

Baker asked, “Director Vonesch do you think two weeks are going to be an issue for you?” 

Vonesch said, “I’d really like to get this passed today.  I think it’s an easy thing for us to do. It’s a letter of support. There’s zero commitment. This is a tax that other districts or municipalities within the SRD could apply for.  I didn’t mention it in my first remarks, but Campbell River already has applied for this tax. They’re receiving it. At that time it was aimed at tourism marketing, which I believe it’s still being used for. In 2018, the government changed it so that you can apply for this tax for affordable housing.” 

Rice wanted to know, “If we all start applying for it, at what point do we get denied? So if this was done on a bigger level, would that open up all of the areas to being able to receive this?” 

CAO David Leitch confirmed that Campbell River has an MRDT, adding that either the SRD or individual communities within it could apply. 

Vonesch explained, “This isn’t a grant that we’re applying for. it’s not like there’s limited funding giving out to different communities. It is a community getting a pillow tax, $3, $4 or $5 per night on Airbnb rentals. So the revenue is just really dependent on the tourism in each of our communities.”

When the vote was called, the board unanimously approved Cortes Island’s request for a letter of support.

Vonesch later explained that he had been communicating with the other Directors last week, but wasn’t sure he had enough votes when he walked into the meeting yesterday. 

He received a lot of support from what some might think was an unexpected support. Regional Director Gerald Whalley wants to keep the taxes in his own area as low as possible, and doesn’t want zoning or business licenses. It seems unlikely that he will apply for an MRDT in Area A, but he had a number of conversations with Vonecsh.   

“He helped me with the processes in the meeting: how to do it, what might happen and how to respond to it. When it got passed, he looks at me and he’s like, ‘Good job, way to go,” said Vonesch.  

“Which I think is just awesome to see. Despite him having very different politics than me, he’s willing to help. I think that’s the political change that we need to see happen in the world. Recognizing that we’re different. We come from different places, but different communities have different needs and different wants, and we can respect that. How can we work together and get things done.”

Top image credit: Planning a development -Photo by Tierra Mallorca on Unsplash

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