In order to combat the housing shortage in BC the current sitting provincial Government recently announced some sweeping changes. Amongst them is Bill 35, the new Short-Term Rental Accommodations Act, which effectively restricts or bans short-term rentals that do not conform to the provincial regulation exemptions which take effect on May 1, 2024. It is expected to be passed with little revision.
What is the Purpose of the New BC Short Term Rental Regulations?
Ultimately, the goal of the act is to demonstrate that the provincial government is taking steps to alleviate the rental housing demand despite a multitude of other reasons that are contributing to this challenging situation.
However, according to the provincial website “the purpose of the new rules is to:
- Give local governments stronger tools to enforce short-term rental bylaws
- Return short-term rental units to the long-term rental market
- Establish a new Provincial role in the regulation of short-term rentals”
What are the Rules?
Sourced from the Provincial Government website
“Effective May 1, 2024, protections for non-conforming use of property will no longer apply to short term rentals. Information about non-conforming use is available through local governments. In some areas, these protections have historically allowed hosts to continue to use their property for short-term rentals even when it was against the new rules set by the local government.” As noted above due to the variety rules with regards to non-conforming use between local governments, the Provincial Government is directing readers to the local governments for more information on what is non-conforming use.”
Also effective May 1, 2024, the new provincial principal residence requirement will come into effect. This means that regardless of local zoning bylaws, the principal residence requirement will apply in designated communities” (listed in this link).
What this means is that BC home owners who are acting as a host will legally only be able to rent out their principal residence plus one more additional secondary suite or accessory dwelling unit as a short-term rental. The legislation does not provide a blanket ban on these rentals and there are specific areas that are exempt from the principal residence requirement, including the following Provincial Government list:
- “The 14 resort regions,”
- “Most municipalities under 10,000 population (except those adjacent to larger municipalities)”
- “Regional district electoral areas”
- “Mountain Resort Areas and Designated Resort Regions” (which may also include the 14 resort regions above)
- “Islands Trust”
- “Agri-tourism accommodations”
And apparently the Provincial Government will NOT be adding any more areas for exemption.
Who Does the Short-Term Rental Accommodations Act Affect?
The new rules apply to all short-term rentals being offered to the public including:
- Offers hosted by platforms, on which people can reserve and pay for the rental service (i.e. Airbnb, VRBO, Expedia, and FlipKey)
- Offers on other web listing forums (which may include for example, Facebook Marketplace, Kijiji, and Craigslist)
- Offers in classified ads in newspapers
Although not directly mentioned, I would also expect the rules would apply to an owner’s private website where people can reserve and pay for the rental.
But the new rules will not apply to:
- Reserve lands
- Nisga’a Lands or the Treaty Lands of a Treaty First Nation (unless the Nation chooses to opt into all or part of the legislation through a coordination agreement with the Province)
- Hotels, motels (What is the definition of these?)
The Provincial Government is also drafting additional regulation to exempt other property types such as timeshares and fishing lodges.
What else is the Provincial Government Including?
- Broaden the definition of short-term rentals to cover any accommodations being rented up from fewer than 30 days up to fewer than 90 consecutive days at a time: This is a significant departure from what the municipalities define as a short-term rental period. If this rule goes through, it will have a massive effect for many owners.
- Strengthen local government tools to enforce short-term rental bylaws: The maximum fine that regional districts can set for prosecutions of bylaw offences under the Offence Act will increase from $2,000 to $50,000, which would be consistent with municipalities under the Community Charter. It also intends to increase the maximum municipal ticketing fine a local government may issue. These maximum fines could then be applied in:
- Municipalities
- Regional districts
- Islands Trust
- Establish a new business licence authority for the regional districts: This would give the Regional districts the ability to regulate and license short-term rentals and other businesses similarly to municipalities.
- Display a business license. Where local governments require a business license, the host would also need to display a valid business license number on their listing
- Platform Accountability: If a host does not include a valid business license number in a region where it is required by the local government, the provincial government is going to require the platform to remove the offending host’s listing at the local government’s request.
- Data Sharing: The short-term rental platforms will be required to share information about short-term listings with the Province. The Province can then share this information with local governments. Apparently, this information will be kept confidential. This is a growing concern due to the growing number of data breaches in both private and public entities. It is expected to be done by the summer of 2024.
- Establishing a Provincial Registry. Further to the above data sharing point, The Province will establish a short-term rental registry to help “ensure that short-term rental hosts and platforms are following the rules and provide local governments and the Province the information needed to follow up when they don’t.” “Hosts will be required to include a provincial registration number on their listing. They will also have to include their business license number, if a business license is required by the local government. Platforms will be required to validate registration numbers on host listings against the Province’s registry data.” This registry is expected to be complete by the end of 2024.
- Establish a Provincial compliance and enforcement unit: This unit will track compliance, issue compliance orders, and administer penalties for violators.
What are the Effects of the Province’s New Short-Term Rental Regulations?
At this time, we don’t know all of the ramifications, but there are many as Kevin Falcon, the leader of the opposition pointed out such as the effect on tourism, temporary work, health care, etc. Just think of all those people that have already booked these places in regions where there are already limited and expensive hotels and motel accommodations like Vancouver. Here are just a few considerations that these short-term rentals help. Do tourists want to always stay in hotels and pay $10 for a cup of coffee and have to eat at restaurants for every meal? NO!!!
- How is the city and region going to accommodate all the tourists for the FIFA tournament, and even the recently announced Taylor Swift concert, where hotels are already booked up?
- What about those businesses who bring in personnel that require temporary residences while assigned to do work in a particular region in BC?
- How about the film industry that also brings in actors and personnel for various films and shows?
- What about people that must go to specific regions for surgeries, treatments, or temporary medical care.
- What about those people burned out of their homes due to forest or apartment fires?
In many cases, this new act overrides local governments, strata corporations, and homeowners’ rights for those homeowners that have been compliant in terms of short-term rentals.
Is this a Real Solution?
The provincial government refers to a study which estimated that more than 16,000 housing units being used as Short Term rentals in BC.
- From July 1, 2021 to July 1, 2022 BC welcomed over 116,000 new residents.
- In the first quarter of 2023 the net migration to BC was over 48,000.
Removing 16,000 short term rental units is potentially going to make things worse. It is like putting a small “Band-Aid” on a large hemorrhaging wound (sorry for the graphic image). It’s a step in the right direction and may relieve a tiny bit of pressure, but it is a misstep on providing any meaningful solution. The provincial government’s Short-term Rental Act regulations are not just dealing with the “Bad Actors” (those non-conforming individuals and entities that are profiteering from short-term rentals) as Premier Eby calls them, but it is punishing everyone even if they were compliant.
Remember that in 2018 that the NDP provincial government capped rental increases at a rate of inflation plus 2 per cent and then in 2019 removed the 2 percent part and changed it to a government controlled annual rent increase. This one step has made it even more difficult for homeowners and landlords to try to financially keep up.
Many of the property owners potentially had to switch the rental status of their homes to keep up with all the bills of maintain the property. With significant increases in every cost related housing like taxes, heating, electricity, materials, labour, insurance, interest many homes would deteriorate if these types of fiscally responsible steps weren’t taken.
Even if a property was break even with revenues and expenses, if the income doesn’t increase at the same rate as the expenses, it cannot keep up mathematically and something will break.
So enough with blaming the foreign buyers, developers, real estate agents, investors! It is way more complex than that and all three levels of government very much have their fingerprints all over the current housing crisis in Canada and in BC!
My Opinion
As someone who was born, raised, and lived here all my life in Vancouver, I absolutely have a strong opinion about this situation and feel a need to voice my opinion. Not everything is a nail and this heavy-handed approach to what is a complex problem is in no way solving the problem. At best, it is picking the low hanging fruit, and providing delusional optical overture by the provincial government to somehow demonstrate that it is somehow addressing the housing shortage concern.
The approach is an overreach by the provincial Government of homeowners’ rights without addressing the real issue at hand. If the provincial government really wants to address the issue head on, then consider and act on all the costs that are involved in building and getting housing units to market in an affordable way such as the extraordinarily long time it takes to get permits by the municipalities, the ever increasing development cost charges, the property transfer tax on a property every time it sells whether at 1 dollar or 100 million dollars, the incredible waste of tax payers dollars at both local and provincial levels, immigration without control or addressing the related housing and infrastructure to accommodate the new comers.
Many of the property owners potentially had to switch the rental status of their homes to keep up with all the bills of maintain the property. With significant increases in every cost related housing like taxes, heating, electricity, materials, labour, insurance, interest many homes would deteriorate if these types of fiscally responsible steps weren’t take. Even if a property was break even with revenues and expenses, if the income doesn’t increase at the same rate as the expenses, it cannot keep up mathematically and something will break.
Real Solution
It is time to get serious and address all the inputs to this problem and start including ALL the stakeholders to fundamentally change the approach and come up with a real and realistic sustainable solution.
What I mean by that idea is to have the provincial and local governments, developers, a cross section of landlords, tenants, rental housing organizations, the hotel and motel operators participate in meaningful discussions to tackle all the major concerns and work on potential creative solutions, where zoning, infrastructure, immigration, cost cutting measures are addressed.
Mic drop!!!
What Can You do if this Affects You?
Get involved! Speak up! Take Action! Contact your local MLA, the media, the News stations, etc.
There will be challenges to the zoning and requests for definitions of what is a hotel or motel. I would expect that there will be an up swell of activity in the media, potential lawsuits tabled against the provincial government, and there will be legal challenges and battles. You get in life what you negotiate.
I would expect that there will be people trying to adapt to the new rules and maybe look for mid-term rentals, but this won’t work for most as the demand for that type of accommodation will not work for many.
