Market Update: January 2024 Kelowna's Vacation Rental Industry
This article was originally published in our Investor Insights newsletter which was sent to our subscribers January 15, 2024. Subscribe here
Kelowna City Council met earlier today to discuss the regulatory changes for short-term rentals. These are the same considerations raised in October and brought to the public hearing in November. They did not introduce any new regulations.
Council did vote to move this amendment forward. Some sentiments from the council were that they felt the city tried to find the middle ground with allowing short-term rentals and were unsuccessful. They want to give these more restrictive regulations a try. "If the system works the way the province wants it to then our bylaw will make more homes available for more people."
If you are interested in watching the hour-long council meeting, you can watch it here. A pop-up video player should appear, and the discussion begins around the 1:18:00 mark.
Regulatory Changes Proposed
The primary consideration was to consider removing short-term rental accommodations as a permitted secondary use across all zones.
Even if you have a principal residence, you will not be permitted to rent the home to offer a short-term rental as a secondary use of the property. The provincial legislation removed STR as a primary use of a home, and the City has added further restrictions to remove STR as a secondary use.
Secondly, should the council support staff's recommended text amendment, the 498 currently licensed secondary use short-term rentals can continue to operate even after May 1st, 2024, provided they meet the new provincial principal residency requirements. This is the staff-recommended approach, and these properties can continue to serve the short-term market.
All of this means no new licences would be granted for a short-term rental market in the City of Kelowna. The number of active secondary use STR licenses, which would be grandfathered in can only go down!
Future Directions and Considerations - a glimmer of hope
A local government may request that the province exempt specific properties so that the principal residence requirement does not apply. City staff have been directed by the council to investigate this process and identify properties where maybe the property should have an exemption based on how they were originally permitted.
This list has to come back to the council for discussion, and if the council endorses this list, the city will send it to Victoria to advocate the appropriateness of that list and why they've requested those addresses.
The rental vacancy rate is one of the factors for the province to consider for the exemption. The last time the vacancy rate in the city of Kelowna was above 3% was in 2012!
If a request is granted, the exemption to the principal residence requirement would be for a prescribed date and period of time, and it would not be a permanent exemption.
Don't hold your breath.
This process takes time. From staff needing to prepare the report(s), get it on the agenda, obtain the council's approval, submit the package to the province, engage with the province, and then wait for a response. From my latest conversation with staff this past Friday, they said this process could take 6 months, maybe 18 months. They just don't know, but it won't be in time for May 1, 2024.
Public Feedback and Community Engagement
Looking forward, the council expressed the need for ongoing analysis and possible adjustments to the regulations. The importance of public feedback and community engagement was highlighted. The council emphasized the value of homeowner and resident input in shaping future policies.
There is no collaboration between neighbouring municipalities. City staff believe that other cities like West Kelowna, Lake Country and beyond will look to Kelowna for direction or, let's say, inspiration before drafting their own amendments. I believe West Kelowna is waiting on city staff to come back with a report in the next several weeks.
Some buildings have been very quiet, so I encourage every owner on title to submit individual letters to Ryan Smith defending your address and requesting that it be added to the list and why. I also encourage you to lobby the province, as the decision to provide an exemption is ultimately up to them. All relevant email addresses at the end of this email.
It is crucial for us to stay informed about these developments, as they could have direct implications for our operations and future planning.
Conclusion
To keep it super simple: short-term nightly rentals are not permitted as a primary use of the property. Full stop.
We can hang on to hope that one day some of us may be granted an exemption, but moving forward, we have to plan to use our properties differently. I'm still working on that solution, as there is consideration to align with the new provincial short-term rental legislation, which may include amending the period of time definition to align with provincial changes and alignment with bed and breakfast regulations. Kelowna defines short-term rentals as less than 30 days while the provinces says less than 90. City staff are still seeking some clarity on this, as it was contained within the policy guidance document the province provided for local governments.
I will keep you updated on any further decisions or changes. Please feel free to contact me if you have any questions or need further clarification on any of these points.
Stay tuned and thank you for your patience,
Deana
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Disclaimer
The information provided is my personal opinion, and it is not a substitute for getting legal advice or other professional advice. You can find more details on the provincial government website for your education.
Resources & Email Addresses
* Don't forget to address each person in an individual email. Templated or duplicated emails are not recommended.
City of Kelowna Staff
Divisional Director, Planning and Development Services: Ryan Smith rsmith@kelowna.ca
Planner II: Kimberly Burnett kbrunet@kelowna.ca
Provincial
Premier: Honourable David Eby premier@gov.bc.ca
Deputy Minister to the Premier: Shannon Salter premier@gov.bc.ca
Minister of Housing and Government House Leader: Ravi Kahlon HOUS.minister@gov.bc.ca
City of Kelowna Councillors Emails
Ron Cannon rcannan@kelowna.ca
Charlie Hodge chodge@kelowna.ca
Gord Lovegrove glovegrove@kelowna.ca
Mohini Singh msingh@kelowna.ca
Luke Stack lstack@kelowna.ca
Rick Webber rwebber@kelowna.ca
Mayor Tom Dyas mayorandcouncil@kelowna.ca (recommended to address the Mayor directly)
Excluded for conflict of interest: Maxine Dehart and Loyal Wooldridge
Members of the Legislative Assembly
MLA for Okanagan-Mission: Renee Merrifield renee.merrifield.mla@leg.bc.ca
MLA for Kelowna-Lake Country: Norm Letnick norm.letnick.MLA@leg.bc.ca
MLA for Kelowna West (West Kelowna): Ben Stewart ben.stewart.MLA@leg.bc.ca
MLA for Peachland, Summerland & Penticton: Dan Ashton dan.ashton.MLA@leg.bc.ca
If you representative not listed: visit https://www.leg.bc.ca/learn-about-us/members to find your MLA