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'Still open for business': Pressure on remaining short-term rentals in Kelowna

Visitors face uncertainty, wedding parties scramble for accommodation
As of May 1, 2024, provincial legislation limits short-term rentals to a host’s principal residence or one secondary suite accessory dwelling unit on the same property in municipalities with a population of 10,000 and over and smaller neighbouring communities.

“Their first question is, do you have a license?”

A woman who has operated a legally complying short-term rental in Kelowna for 12 years says she has been getting more inquiries from people worried about the new provincial and municipal rules around short-term rentals as the busy summer season fast approaches.

Marilyn Strong is still allowed to operate her north Rutland suite because she has a business licence and the room is located in her home. She feels for people who invested in condos in Kelowna tourist zones that were zoned commercial who now find themselves facing the prospect of having to become long-term rental landlords or sell their properties.

Condo investors left with tough choice

“People that bought in Aqua, people that bought into Brooklyn, knowing it was short-term rental and they would be able to rent it out."

“There’s all sorts of ways to invest money or grow your income so you can afford to retire here and I feel badly for those people because their business has been cut off with the stroke of legislation,” said Strong.

As of May 1, 2024, provincial legislation limits short-term rentals to a host’s principal residence or one secondary suite accessory dwelling unit on the same property in municipalities with a population of 10,000 and over and smaller neighbouring communities.

In the wake of the BC government move, the City of Kelowna removed secondary use short-term rentals as a permitted use from all zones and said no new secondary use short-term rental would be accepted. Existing secondary use short-term rentals with a valid business licence will be allowed to continue to operate as long as they meet provincial principal residency requirements.

Only 470 licenced suites

The city told Castanet 470 secondary suite licences remain after being grandfathered under the new rules. It also said that it is “open to advocating for/supporting property owners in buildings that believe they qualify for a strata hotel exemption.”

Strong says it’s not just property owners feeling the effects. She says businesses that popped up to support STRs, like cleaning companies and gift basket makers, are losing customers. She also says it’s going to hit visitors in the pocket book.

“Think about this for a moment. You live somewhere else in Canada, or somewhere else in the world and you’ve met the person of your dreams here in Kelowna and you’ve set your wedding. You know Kelowna is a really important place to get married. It’s a beautiful spot," she said.

“You’ve booked a place two years out and all of a sudden your wedding is this summer and you got notified in January that the house you had rented for your family is no longer available. What are you going to do?”

Strong adds that the changes are also confusing for travellers because each community has its own rules on top of the provincial legislation.

Rental platforms waiting for more information

Castanet reached out to Airbnb about what it is doing to comply with the new regulations.

As of May 1, it said hosts in affected municipalities will be required to display their local government business licence number, where applicable, on their listing page.

Airbnb said that when a municipality identifies a listing not in compliance with local bylaws, it flags the listing to the Ministry of Housing. The Ministry then contacts rental platforms and requests the removal of the unlicensed/non-compliant listing.

The company said it has been in touch with BC leaders to request more information about how the province plans to implement its enforcement structure. Until it hears back, Airbnb says it will “stand by to handle requests for removal on non-compliant listings.”

Chamber of Commerce monitoring impact

While the Kelowna Chamber of Commerce advocated for more affordable housing to help local businesses struggling with a chronic worker shortage, it’s closely watching the fallout from the short-term rental rule changes.

“The goal of this is to improve affordable housing. So we will be monitoring that very closely from a Chamber perspective because this has been disruptive in the business community,” notes Kelowna Chamber of Commerce CEO Dan Rogers

“It should lead, theoretically, to more affordable long-term rentals. We will have to see if that actual implementation of these regulations produces what the government is trying to achieve.”

This is the latest blow after a challenging several years for tourism-related businesses in the Central Okanagan. Rogers is urging the government and other stakeholders to make sure the message gets out to vacationers that Kelowna is still open for business, despite the loss of hundreds of short-term rentals.

“We’re still open for business, the wineries still have wine, there will be accommodation options, maybe not those short-term rentals that you were looking at but there are still opportunities. So, communication right now is the key to reinforce to those that maybe want to consider coming here that there is still great opportunity to take advantage of what we have to offer,” says Rogers.

In the meantime, Strong says her one-bedroom suite is almost fully booked through to the last weeks of September.