Legislation Introduced to Rein in Short-Term Rentals in BC

October 17, 2023

BRITISH COLUMBIA – Turning short-term rentals into homes for people is at the core of newly introduced legislation to regulate the rapidly expanding short-term rental market according to the recent Provincial press release.

“We applaud the Province’s leadership in taking bold action to address the housing crisis. These proposed changes lay a strong foundation for municipalities to build upon through our own bylaws and regulations, so that current and future residents will be able to quickly access more long-term rentals and housing solutions. This is an important step to help ensure there is a diverse housing supply available for our rapidly growing city. The need is great: as an example, we hear regularly from our tourism industry of the challenge their staff have in finding housing and this will go a long way to change that situation, and many similar housing challenges in our community,” said Tom Dyas, mayor of Kelowna.

Short-term rental listings on online platforms (which may include, for example, Airbnb, VRBO, Expedia, FlipKey) have expanded rapidly over recent years. Data shows that it continues to surge since the COVID-19 pandemic. BC’s short-term rental market is now at an all-time high, diverting thousands of long-term rental homes onto the short-term market. Currently, there are approximately 28,000 daily active short-term rental listings in BC, an increase of 20 per cent from a year ago. Data indicates that more than 16,000 entire homes are being listed as short-term rentals for the majority of a calendar year.

The short-term rental market in BC is dominated by a small segment of profit-driven operators. Research from McGill University shows the top 10 per cent of hosts earn nearly half of all revenue. Nearly half of all operators have multiple listings. Approximately 30 municipalities, including Vancouver, Victoria and Kelowna, have introduced short-term rental bylaws and licence fees to regulate the short-term rental market. The proposed legislation builds on those bylaws and equips municipalities with more enforcement tools.

The legislation focuses on three key areas:

  • increasing fines and strengthening tools for local governments;
  • returning more short-term rentals to long-term homes; and
  • establishing provincial rules and enforcement.

Changes to how short-term rentals operate will come into effect through a phased-in approach and will include:

  • Increasing fines and better tools for local governments:
  1. increasing fines for operators breaking local rules to support local municipal bylaws, and requiring short-term rental platforms to share data to strengthen local enforcement;
  2. requiring online short-term rental platforms to share their data with the Province, so the Province can provide that information to local governments for enforcement and support of provincial and federal tax auditing;
  3. requiring short-term rental platforms to include businesses licence numbers on listings where they are used by a local government, and to remove listings without them quickly to ensure local rules are being followed; and
  4. giving regional districts the ability to issue business licences so they can more effectively regulate short-term rentals in rural areas.
  • Returning more short-term rentals into long-term homes for people:
  1. requiring short-term rentals in BC to be offered only in the principal residence* of a host in municipalities with a population of 10,000 people or more
    (*principal residence plus one secondary suite or laneway home/garden suite on the property is allowed);
  2. forthcoming regulations will specify areas exempt from the principal residence requirement, including 14 resort regions, mountain resort areas, municipalities under 10,000 population (except those within 15 kilometres to larger municipalities), and regional district electoral areas; and
  3. removing legal non-conforming use protections for short-term rentals being taken advantage of by investors to support local governments’ efforts to set rules about where these units can operate in communities.
  • Establishing provincial rules and enforcement:
  1. establishing a provincial host and platform registry by late 2024 for stronger accountability; and
  2. launching a provincial short-term rental compliance and enforcement unit to make sure rules are being followed.

According to the release, updating how short-term rentals are operated and enforced will contribute to thousands of homes being returned to the market over the next few years, while giving smaller communities and communities that are heavily reliant on short-term-rental-related tourism some flexibility. These areas will be able to choose to opt into the principal residence requirements depending on housing pressures in their communities.

Communities on First Nations reserve land will be exempt from the legislation. Modern Treaty Nations will also be exempt from the legislation but will be able to opt into the legislation, if desired.

This proposed legislation will not apply to hotels and motels. Regulations are also being drafted to exempt additional types of properties, for example, timeshares and fishing lodges, which are not intended to be covered under the scope of the legislation.

This legislation is part of the Province’s Homes for People action plan. Announced in spring 2023, the plan builds on historic action to deliver housing since 2017, and sets out further actions to deliver the homes people need faster, while creating more vibrant communities throughout BC.

“I’m delighted to see the provincial government stepping in to regulate short-term rentals across British Columbia. Having provincial policies, oversight, data-sharing requirements and enforcement measures will support municipal efforts to manage short-term rentals to create more homes for British Columbians. Victoria has robust short-term rental regulations, but we welcome the certainty that comes with a provincewide plan to move more units into long- term homes,” said Marianne Alto, mayor of Victoria.

“The Province’s new short-term rental legislation announcement is welcome news indeed. Expanding regulations, ensuring accurate data and data sharing, strengthening both local and provincial government enforcement tools – these much-needed actions will help diverse communities in every corner of the province better understand and control short-term rentals proliferation, and will certainly help shift many commercialized homes back into the long-term housing market. Well done,” said mayor of Tofino, Dan Law.

Business Examiner Staff/Submitted




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