Kelowna long-term rental advocate Dianne Varga looks over copy of Kelowna’s housing strategy. Photo: Barry Gerding/Black Press

Kelowna short-term rental loophole raises concerns

Brooklyn housing project marketed as non-principal residence rental revenue opportunity

A loophole in the short-term rental policy proposed by city council may backfire and create a “speculators heaven,” says a rental advocate.

Dianne Varga says the city’s plan to restrict short-term rentals to principal residences can be evaded by buying into multi-unit property developments falling under a myriad of C type zones .

“Examining the city’s zoning map, I also find there’s scarcely a plot of land downtown that’s not zoned one of these,” Varga said.

She says the zoning loophole will turn higher density developments in the Pandosy and Rutland areas of the city into “a speculator’s heaven.”

Related: Kelowna to consider allowing short-term rentals

Varga wants Kelowna residents to be aware of these issues before a public hearing on Tuesday, July 31, that will examine a proposal by the Mission Group for the 178-unit Brooklyn housing project on St. Paul Street.

The Mission Group’s advertisements for the project presents it as an opportunity for homebuyers to generate short-term rental revenue, said Varga.

“The ability to offset the cost of your investment by renting it when you please is a game changer,” said Randall Shier, president of the Mission Group, in a press release.

“First-time homebuyers and working professionals will love the flexibility offered by the option of earning money while they are away from home.”

Varga said that’s the message being marketed to Lower Mainland property buyers, creating the potential for wealthy investors to buy up clusters of the Brooklyn units to generate short-term rental benefits.

Varga argues that for long-term renters like her, it further diminishes the opportunity to ever buy into local real estate, as entry level housing will be consolidated by out-of-town real estate investors.

Related: Lake Country addresses short-term rental issue

At a council meeting July 11, Kelowna city staff acknowledged to council that existing short-term rental accommodation rules are being openly flouted by local property owners.

According to a staff report, as of last November there were 1,178 listings for short-term rentals in Kelowna despite the fact they are not allowed in any areas in the city zoned residential.

At the council meeting, city councillors adopted a plan to establish guidelines for short-term rentals, most significant being to only be allowed in a property owner’s principal residence. That would rule out short-term rental use for secondary suites or carriage homes.

Council plans to hold further extensive consultation meetings across Kelowna before drafting a short-term rental policy in place.

Varga admits existing city zoning guidelines make it difficult to contest the Brooklyn development or any others on short-term rental grounds.

“I think it is important for people who care about this issue to make their concerns known or make a submission to the public hearing,” Varga said.

“The city is looking at drawing up a short-term rental policy, but at this point there is a way for developers through these C-zones to get around that.”

Related: Landlords turn to short-term rentals

She cited the example of another condo development downtown where short-term rentals are rampant, leaving the building significantly empty to the extent it required private security.

Another Kelowna resident Amanda Poon sent an email to the Capital News this week, saying how can city council veto short-term rentals while praising the Brooklyn development in the same breath.

“Regulate all, or regulate none,” she wrote.

Poon noted that, while development injects substantial revenue into community coffers, there is a cost in that city staff project nearly half of Kelowna’s infrastructure needs are under-funded for the next decade.

She suggests the Brooklyn project rezoning be deferred until the community consultations on short-term rentals has occurred.

“They will prioritize our long-term OCP vision over developers’ hasty need to drum up seed capital while the market is hot. We need time to review these projects thoroughly and put solid legislation in place to make sure the promised community benefits of these developments will actually be realized (Central Green flashbacks, anyone?),” Poon said.

The public hearing takes place Tuesday, July 31, at city hall. The deadline for submissions is Monday, 4 p.m.

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