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Province to limit short-term rentals in some B.C. communities, but not all

Legislation tabled Monday morning establishes new requirement but not everywhere

Housing Minister Ravi Kahlon said new legislation limiting short-term rentals won’t impact the ability of British Columbians to use short-term rental platforms or rent out their own homes themselves.

“But those of you, who are renting out dozens of short-term rentals to make a huge profit, that are taking away homes from people, you should probably be thinking about a new profit scheme,” Kahlon said.

Kahlon made these comments at a joint news conference with Premier David Eby after tabling new legislation that promises to create new housing by stemming what Kahlon called the “surge” of short-term rentals taking away housing units from “people who desperately need them.”

Data from the provincial government identifies 28,000 daily active short-term rental listings in the province, an increase of 20 per cent from a year ago.

Kahlon also set a goal for the legislation by referencing a McGill University study commissioned by the provincial hotel industry. It found short-term rentals offered through platforms like Airbn, Vrbo and others have pulled 16,000 “entire homes” out of the rental market in British Columbia with consequences for rental rates.

“If we can get even half of the 16,000-plus…homes that are being used for short-term rentals back into the market, that’s 8,000 homes for families being able to have in British Columbia,” Kahlon said.

Not everyone agrees with this finding. The Conference Board of Canada has found that short-term rentals have had little impact on rental rates.

The legislation the provincial government introduced Monday (Oct. 16) will limit short-term rentals in many but not all communities across B.C. However, the changes require additional bureaucracy, comes with multiple exceptions, and will take some time to come into effect.

The key element is the introduction of the principal residence requirement effective May 1, 2024. It means homeowners cannot operate a short-term rental business unless it is their principal residence and/or one other unit on their property, be it a secondary suite, a laneway house or garden suite.

The legislation defines a “principal residence” as a “place in which an individual lives for a longer period in a calendar year than any other place” in mirroring the definition used in the provincial speculation and vacancy tax.

This means that home-owners could still rent out their principal residence as short-term rentals for several months. But it also means that condominiums currently available as short-term rentals on various platforms would have to enter the rental pool.

This part of the legislation aims squarely at the growing proliferation of condominium buildings that have essentially turned themselves into private, quasi-hotels.

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But that principal residency requirement will only apply in communities with populations above 10,000, and communities below 10,000 less than 15 kilometres away from communities with the requirement. Municipalities under 10,000 can ask the province to extend the requirement to their communities, while communities above 10,000 can apply for an exemption from the requirement if their vacancy rates as measured by CHMC exceed three per cent.

The legislation also exempts from the principal residency requirement regional districts, electoral areas (including Gulf Islands) and the 14 resort and mountain resort communities in B.C.

Eby said the legislation recognizes the role of short-term rentals as an additional income source for individuals and their role in the tourism, especially in rural British Columbia while addressing the “gross abuses” within the industry, he said.

The principal residency requirement serves as what government calls a “provincial floor” and won’t stop municipalities from passing tougher bylaws around short-term rentals.

The legislation also promises additional help for municipalities struggling to track the number of short-term rentals within their borders and go after violators.

The legislation calls for the creation of a legally binding provincial host and platform registry by late 2024, and the creation of a provincial short-term rental compliance and enforcement unit. Details such as size and budget of this unit are still to be worked out.

The registry responds to a long-standing demand from municipalities and others concerned about a lack of data around the issue.

Once the registry goes online, platforms will have three months to register their companies and hosts will have six months to register their units. Platforms can only advertise listings with a provincial host registration number.

Violators also face tougher penalties. Hosts breaking local municipal by-law will have to pay $3,000 per day per infraction — up from $1,000.

Some elements of the legislation, including the ability of regional districts to issue business licenses for short-term rentals, will come into effect immediately, after it has received royal assent. Others won’t come into effect until May 1, 2024 while some won’t come into effect late 2024.


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Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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