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Kelowna to further limit short-term rental accommodation

Click to play video: 'The potential impact on tourism with new short term rental rules being announced in B.C.'
The potential impact on tourism with new short term rental rules being announced in B.C.
Kelowna is a major tourist destination and attracts some two million visitors every year. Questions are being asked about whether or not hotels and motels can accommodate those types of numbers now that many vacation rental properties will no longer be able to operate in the wake of new legislation for short-term rentals. – Oct 20, 2023

Kelowna, B.C., council is further regulating short-term rentals in the city in an effort to address the city’s housing shortage.

“Kelowna is in a housing deficit and an appropriately regulated process is required to ensure more homes are accessible and available for our current and future residents to live in as long-term rental supply,” Ryan Smith, the city’s director of planning and development, said.

To that end, zoning bylaw changes propose to remove short-term rental accommodation as a permitted secondary use from all areas of the city unless it’s explicitly already been allowed to be used as a short-term rental for a principal use. For example, the McKinley Beach Comprehensive Development zone – Area I Village Centre zone, as well as on properties with approved site-specific regulations are zoned as such.

All properties with valid short-term rental accommodation business licences would be permitted to continue operating as a non-conforming use in accordance with Section 528 of the Local Government Act – however, this is subject to change should the recently announced Short-Term Rental Accommodations Act, expected to go into effect in May 2024, require additional restrictions.

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“We recognize that short-term rentals can supplement the accommodation market and provide homeowners with additional income opportunities but research across the country clearly indicates short-term rentals are having a negative impact on long-term housing availability, housing prices and rental rates,” Smith said.

Click to play video: 'New study renews debate around tightening the laws around short-term rentals'
New study renews debate around tightening the laws around short-term rentals

City data indicates that as many as 2,400 unique properties, across 74 short-term rental platforms, may be offering short-term rental accommodation in Kelowna. Meanwhile, there are 1,191 short-term rental accommodations with a valid business licence in Kelowna — an increase of 89 per cent since 2020 — and that means more than 50 per cent are operating without a valid business licence.

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Last week, the provincial government announced that as of May 1, short-term rentals would not be allowed in secondary homes — only the host’s principal residence — to free up more housing options amid a housing crisis.

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While some are lauding the move, others are more circumspect.

Kelowna realtor Brian Pedersen also owns several short-term rental units and thinks many people will be forced to sell.

“They won’t be able to get the revenue that they need to actually … make their mortgage payments, pay their taxes, pay the strata fees, all the rest of it,” Pedersen said to Global Okanagan last week.

And that, he said, could result in the market being flooded with condo units and other types of properties, and, in the end, hurt all sellers.

“I would say, yeah, definitely, it’s going to bring the value down…. Real estate is all about supply and demand,” Pedersen said. “It’s going to certainly create a lot more inventory.”

The proposed zoning bylaw changes in Kelowna are scheduled for a public hearing on Tuesday, Nov. 21.

-with files from Klaudia Van Emmerik

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