I have short-term rentals in buildings that were developed, sold and zoned 20 years ago for legal short-term rentals.
I fully agree that housing is an issue in our city that needs to be dealt with and that the Airbnb business has gotten out of hand. However, the sudden short-term rental “ban” by the B.C. government, (as a) one-size-fits-all approach is short-sighted and unstructured.
Kelowna depends on tourism. Such drastic changes will definitely create an impact to this economy. Long-standing businesses, such as property management companies, cleaning companies etc., will be the most affected, but add in the restaurants, golf courses, gift shops, and many more.
Small businesses still haven’t recouped their losses from (the) COVID (pandemic) and the wildfires this summer, and there aren’t nearly enough hotel rooms in Kelowna to accommodate the summer tourists.
We short-term rental owners are already facing summer cancellations from larger families who state they will not be able to afford hotels in Kelowna. They are going elsewhere.
The hotel industry will be the winners in this. McGill University recently did a study on the impact of short-term rentals in B.C. Housing Minister, Ravi Kahlon, and Premier David Eby frequently refer to it. Kahlon calls it “instructive”, and said it was the first time he’s seen raw data that demonstrates the impact of short-term rentals.
But those two neglected to mention it was funded by the B.C. Hotel Association— an absolute and direct conflict of interest. (The government) is giving in to the lobbying of the hotel industry and eliminating economical options for visitors.
Low interest rates were the catalyst for investors to buy in the Okanagan. Now, high interest rates are encouraging existing homeowners to open Airbnb’s to subsidize their suddenly high mortgages. Combine that with sudden inflation, high immigration numbers, a “biased” B.C. Residential Tenancy Act that landlords repel, and add 20,000-plus students who need off-season housing in a city that (allowed) too many short-term rentals (with an inability to police illegal rentals) and you have the perfect storm.
Until recently, the city has approved developments with short-term rental (STR) allowances. Those buildings have strata bylaws in place for STRs, they pay licensing fees to the city and they collect the required 16% tax on accommodations. They even hire their own security companies. A high number of these rentals house students for eight months in the off-season, though they show up on the city books as a short-term rental. This legislation will affect students greatly.
Is this strategy really going to work? Will a young family be suited to a small fifth-floor, two-bedroom, $585,000 condo of 1,016-square-feet, with a huge mortgage and a $550 monthly strata fee? Unfortunately, long-term renting isn’t a good option for the owner, as their income alone will not cover the mortgage, taxes, insurance, strata fees, and other operating costs. Will owners be willing to sell at a huge loss?
The housing minister is making the assumption that a majority of short-term rentals will be converted into long-term housing. But Airbnb is a tool for people who want to run short-term rentals, not long-term rentals.
The B.C. Residential Tenancy Act makes it very hard to evict a bad tenant. A high percentage of landlords have been burned by it, and some just aren’t interested. The act is in serious need of a review, and the Residential Tenancy Branch is seriously backlogged. Being a long-term landlord has become too expensive and too risky in B.C.
Housing has been an issue in Kelowna for quite a while, long before the Airbnb problem came along. Now we have a government that is flexing and going for the low-hanging fruit, rather than doing this in planned stages to see how the market reacts and will enforce impulsive laws.
MLAs in Victoria have absolutely no problem putting the local Kelowna economy at risk, forcing locals out of their legally established businesses. It’s just wrong.