Kelowna moves to limit short-term rentals to principal homes, ban vacation rentals in secondary suites

The City of Kelowna is moving forward with regulations that would limit short-term rentals to principal residences and ban accommodations in secondary suites or carriage houses.

On Monday, city council directed staff to prepare bylaws needed to implement the proposed rules and licensing for short-term rentals, which are defined as stays of less than 30 days.

A staff report penned by Laura Bentley, community planning supervisor, outlines the explosion in popularity of short-term rentals in the popular tourist destination.

The report says the number of short-term rental listings increased nearly 69 per cent between winter 2017 (1,172 listings) and spring 2018 (1,979 listings).

One of the most commonly used short-term rental sites, Airbnb, identified Kelowna as a trending North American destination for 2018 with a 170 per cent increase in guests in 2017.

WATCH BELOW: Global Okanagan coverage of short-term rentals 

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Over 80 per cent of listings are entire homes being rented out, and the units are divided between single detached homes and multi-family units.

While short-term rentals are on the rise, the long-term rental crunch continues.

Kelowna’s vacancy rate increased in 2018 to 1.9 per cent, however the vacancy rate is still below the targeted rate of three to five per cent.

The report notes strong demand for rental units is expected to continue as Kelowna grows and housing prices make home ownership less attainable for many.

The city hopes to increase long-term rental stock by clamping down on vacation rentals. In a stark contrast to what is happening now, short-term rentals will be limited to primary homes.

“This would let residents rent out an extra bedroom or two, or occasionally rent out their entire home for short periods when they are away,” the staff report said.

“Throughout the process of developing these regulations, we heard many different perspectives,” Bentley said in a press release.

“What we’ve proposed aims to take a balanced approach to allowing short-term rentals as an option for tourists and other visitors, while also protecting long-term rentals and limiting impacts on neighbours.”

Next steps will see city staff prepare draft bylaws, which will be brought to council in early 2019. It will  require council adoption before the new regulations are implemented.