Kelowna looking to backtrack on short-term rental rules

Amending short-term rules

Photo: pixabay

The City of Kelowna is rethinking its policies around short-term rentals.

And, if city council agrees, staff will craft new bylaws that would bring the city in line with provincial standards established more than a year ago.

In early 2024, in response to provincial legislation, the City of Kelowna adopted new short-term rental bylaws that were more restrictive than those enacted by the province.

As a result, the number of legal short-term rentals plummeted from 1,217 in 2023 to just 427 a year ago.

“Short-term rental regulations have drawn strong criticism from local businesses and the development community as a core reason for a decline in the local economy,” development planning manager Nola Kilmartin said in a report to council.

“Staff have reviewed and summarized the available data on STRs as it relates to housing and tourism. The data indicates that fluctuations in the local economy are the result of several factors and cannot be directly attributed to City of Kelowna STR bylaws.”

Initially, the city introduced bylaws more restrictive than the province as a protection for long-term rental stocks, the lack of resources to enforce STR regulations and demands on the city’s bylaw officers.

Data from the city also indicated about 1,200 illegal short-term rentals were operating in Kelowna between 2023 and 2024.

However, she says, new information released during 2024 indicates several reasons for aligning local bylaws with those of the province.

“This includes eligibility for a federal STR grant that would support enforcement efforts and consistency with the province’s new Compliance and Enforcement Unit.

“Easing the secondary use restrictions on STRs in Kelowna would remove some of the perceived negative impact of these restrictions on the local economy.”

“With Kelowna’s vacancy rates trending upward and ample new purpose-built rental supply in-stream, staff recommend aligning our local regulations with the province.”

Current bylaws only allow short-term rentals as a secondary use, however, new bylaws would allow them as a principal use as well.

In conclusion Kilmartin said it is not clear if the city’s restrictions improved housing affordability or impacted tourism, adding the rise in the rental vacancy rate stems from more purpose-built rentals in larger developments and not an increase in secondary suites converted from short to long-term rentals.

“Economic factors and extreme weather have affected tourism in Western Canada creating uncertainty.

“While restrictions may have played a role, we cannot confirm this.

“Increased resources and support for STR bylaw enforcement from provincial and federal governments present an opportunity for the city to leverage.”