Penticton city staff recommend moratorium on new builds used for short-term rentals

Scroll through a short-term rental website and you will see hundreds of properties listed in the Penticton area.

About half of them operate without a business licence.

Vacation rentals can be a cash cow for homeowners and increases accommodation options for tourists.

But they can come with a host of issues like nuisance complaints and can cause shortages within the long-term rental housing market.

The City of Penticton wants to crack down on compliance so they can fine the rule-breakers.

A staff report to council recommends entering into a contract with a third-party enforcement provider called “Host Compliance” that monitors vacation rentals for local governments.

“They’re sent an email notice right away that they do require a City of Penticton business license and we receive the same notice as well,” said Penticton’s building and permitting manager Ken Kunka.

City staff also recommend placing a moratorium on new buildings used for short-term rentals.

For example, four of the eight units in a condo complex on Winnipeg Street were rented out short-term, immediately after it was built in 2016.

“We’re recommending to council to restrict that, whether it is a 12- or 24-month moratorium,” Kunka said.

Tweet This Click to share quote on Twitter: "We're recommending to council to restrict that, whether it is a 12- or 24-month moratorium," Kunka said.

He said current licences would be “grandfathered.”

Meanwhile, questions are being raised about Kelowna’s new speculation tax; could it exacerbate the vacation rental issue in Penticton.

Kelowna city officials say out-of-province investors could avoid the tax in Kelowna and West Kelowna by acquiring vacation rental properties in other Okanagan cities, like Penticton.

Penticton real-estate broker Deborah Moore said some prospective buyers fear the speculation tax could spread to other areas of the Okanagan.

“It’s very upsetting, very disturbing, and has investors, recreational buyers, all very concerned. They don’t know if the Interior, south Okanagan is next,” she said.

Tweet This Click to share quote on Twitter: "It's very upsetting, very disturbing, and has investors, recreational buyers, all very concerned. They don't know if the Interior, south Okanagan is next," she said.

“I think they will look to other areas like Penticton but more importantly, I think most buyers are just very concerned with this B.C. government’s approach to arbitrarily throwing taxes on properties that are already owned by people.”

The province has said it will work out the details of the speculation tax in the coming months to determine who will be exempted.

WATCH BELOW: Speculation tax critics want Okanagan exemption

2:08 Speculation tax critics want Okanagan exemption