The Playa Del Sol building in Kelowna’s Lower Mission area was built 17 years ago.
The commercially-zoned building has been largely operating as a short-term rental complex since then and appealed to Port Moody resident Sam Ciacco when he purchased a unit in the summer of 2023.
“The fact that it was zoned appropriately and that we were making a move that was legal and you know, by the rules as opposed to you know, buying potentially a residential property and operating you know, an Airbnb or VRBO outside of the rules, which we know people that have done that,” Ciacco told Global News.
“We didn’t want to go down that path.”
But with the province moving to ban short-term rentals in secondary homes to boost long-term housing starting May 1, Ciacco’s new investment is at risk.
“We’re unfortunately caught in the crosshairs of this new legislation,’ said Ciaccp.
In Kelowna, the city is taking an even stricter approach — one that council endorsed on Monday.
In addition to short term rentals being banned in secondary homes, the Central Okanagan city is also prohibiting them in principal residences.
“If you don’t have a licence for a short-term rental, you will not be able get one for your primary dwelling in the future,” said Ryan Smith, the city’s director of planning and development services.
Council did however decide to grandfather in 498 short-term rental licences in principle residences.
In addition, council also passed a resolution asking staff to compile a list of buildings zoned for short-term rentals to debate their future and consider whether or not to ask the province for exemptions to the buildings that have long catered to tourists.
“Council will have the ability to debate that list and decide whether or not we send that list to Victoria with the request for exemptions for those properties,” Smith said.
Ciacco said he’s cautiously optimistic for an exemption because without it, he said it puts him at a disadvantage whether he decides to sell it or rent it long term.
“We’re competing with other condos that were purchased for $150 or $200,000 less than what we paid for ours and even if we wanted to offload it and sell it because of its zoning, and because it’s commercial, you have to be a qualified commercial investor…because the typical banks won’t offer you financing on it,” Ciacco said.
“They require anywhere from 25 to 30 per cent down and it’s not CMHC insurable, so first time homebuyers wouldn’t be able to qualify to buy that in that building.”
Ciacco said he’s at a disadvantage on multiple levels.
“You know, we can’t operate it the way that it was originally intended. If we hold it, we’re disadvantage if we sell it, we’re at a disadvantage,” he said.
Smith said the city will be closely monitoring the potential impact of the new rules and recommend changes should the negatives outweigh the positives.
“This is the biggest change in housing and land use legislation that we’ll see in our generation. This is just the start of the rollout of this in the next six months to a year and it will take some time to see the impacts of this,” Smith said.
“Potentially we don’t have enough tourist accommodation in Kelowna, and what will we do about that is one of the questions that’s come up, and that’s at the top of our minds as well.”