What does the recent Province of BC's new regulations of short-term rental sites mean for the status of your rental?

Well, it provides local municipalities with the ability to increase the fines for hosts who break the rules from $1,000 a day to $3,000 a day.  As a result, hosts' immediately are scrambling to know if their property is conforming or not.  It is noted that more than 30% of hosts in Vancouver are operating illegally.   

The main change is that hosts will now be required to include a business license number on their listings.  Hosts are also encouraged to remove listings without business licenses to avoid the increased daily fines.  

Is your property exempt?

This answer, of course, is very convoluted given the definition fro the province.  The basic rule of thumb is if your property is in a municipality with a population of less than 10,000 you're most likely exempt.  Along with that, as many as 14 resort municipalities are most likely exempt, with details to come in further releases.  

Properties on First Nation Reserve land will be exempt from this legislation.  This means any short-term rentals in these communities can continue and are compliant without any change. The province estimates that 40%-50% of short-term rentals are currently non-compliant given the most recent 2023 data.   

How are they going to enforce this?

The most recent update has given rise to talk of a compliance unit, though this unit's make-up or size has yet to be determined.  It would make sense if they followed the framework of the residential tenancy board, which consists of 10 members.  It looks like this is slated for late 2024 as a basic timeframe.

These new regulations allow Regional Districts to issue business licenses to regulate these rules in more rural locations.  This expedites the process and allows hosts to become compliant much quicker.  

As well, hosts are now required to share data collected from their short-term rentals to increase the available information to the local governments.  This data will be used for increased enforcement and auditing purposes.  It was noted that no personal information would be collected from the host or the tenant.  

Hosts will soon only be allowed to rent out their principal residence plus one secondary suite or laneway home.  In an attempt to decrease the number of hosts who own multiple short-term rental units,  

Vancouver Mayor Ken Sim weighed in on the topic, stating: 

“The City of Vancouver welcomes these moves from the provincial government on short-term rentals. We have said we need more support when it comes to enforcement, and we are pleased to see the Province introduce these changes, with more significant consequences for those who seek to abuse the system. We are in a housing crisis and this will be a big step to ensure folks in Vancouver and across B.C. have more access to attainable housing.”

The government is providing policies and setting the groundwork for more down the road.  However, it seems that most short-term hosts and more specifically, Airbnb hosts, are waiting for the enforcement of these rules before shutting their operations down and turning to the long-term rental system.  

All of these regulations fall under the Provinces' Homes for People action plan.  

 Do these restrictions work?

Short-term rentals in Kelowna operating with a business license have increased nearly 89% since 2020.  Accounting for around 1200 short-term rental units.  However, it must be noted that there are still over 2400 short-term rental accommodations across all the available platforms.  Illustrating that the rules are working, but far from being completely enforced.  

On the flip side, in Squamish, the number of short-term rentals has increased by 38% from 2021-2022 with less than half complying with regulations.  

The city of Vancouver already has more strict regulations, though they have had a hard time enforcing these regulations.  

My Opinion:

Of course, in the short term, we will see an increase in available long-term rentals for BC residents.  However, it may come at a loss for homeowners in the short term.  Hosts will not be able to create supplementary income to support paying their mortgage as rates continue to rise.  However, it could still be done by utilizing their primary residence as an income generator.  

I do like that municipalities can interject, as each municipality will see varying needs for enforcement.  Here in Kelowna, we see a massive influx of long-term rental units from September to May, then a massive decrease from June to August for the tourist months.  This wrinkle will prove to be a difficult hurdle to overcome as owners look to cash in on the summer months in resort-style destinations.  

As this is an ever-changing story, be sure to come back later and check in as other municipalities create their pathway to enforcement.

If you have any more direct and specific questions, feel free to reach out, and we can talk about how your unique situation might be affected.