Kelowna bans short-term rentals amid provincial crackdown

The city of Kelowna has banned short-term rentals (STRs) across all mixed-use and residential zones.

The decision, by a narrow majority of city councillors, will leave Kelowna with just under 500 legal units based on grandfathered regulations allowed by the province.

Like other cities in B.C., Kelowna is obligated to cut down on STRs based on new legislation from the province that is aimed at addressing the severe lack of long-term housing for British Columbians.

However, Kelowna will impose even stricter regulations than those introduced by the province.

In Kelowna, short-term rentals will not be allowed as a principal or secondary land use - with few exceptions – effective May 1, 2024.

The provincial regulations meanwhile, require STRs to be limited to a host’s principal residence plus one secondary suite or accessory dwelling unit.

The new laws also create stronger enforcement tools to address illegal suites and units. All short-term rentals will be monitored through a new provincial registry.

Kelowna has a housing deficit of around 5,000 units, and there are an estimated 1,200 illegal short-term rental listings.

The province, meanwhile, figures 16,000 homes are being used as short-term rentals across B.C. for the majority of the year.

The city will allow 498 currently licensed secondary use short-term rentals to continue operating, even after May 1, with a ‘legally non-conforming’ status, provided the host is a principal resident.

In supporting the ban, city councillor Luke Stack noted the biggest complaints from the public were the secondary use of homes, primarily in single family neighborhoods where non-resident owners “just bring tremendous grief to the neighborhood.”

He added many people were also put off buying a condo in many towers across the downtown because they felt “they were living in a hotel rather than a neighbourhood.”

Councillor Gord Lovegrove opposed the ban, in part because responsible homeowners would be denied the ability to have short-term tenants in their principal residence to help pay off the mortgage.

“Many people have pointed out this will put a hardship on housing affordability,” Lovegrove said, also noting the problem seemed to be more about nuisance properties due to absentee owners. “We want to have fairness.”

But Stack said it was important the city does not lose sight of the main goal which is to bolster its long-term housing supply.

“Short term rentals have had a tremendous impact. We are suffering as a city, “ he said. “We can’t change someone who doesn’t want to be a landlord, but there will be those [in future] who want to come into our city and make investments and those will become long-term rentals.”

City council has directed staff to follow-up at a future meeting with a report outlining specific properties that may be eligible for a potential request to the provincial government for exemption status from the principal residence requirement.