Short-term rentals rules in effect; fines to be levied against non-compliant hosts

The new rules passed in the fall — part of a multi-pronged approach to create more homes to rent or buy amid a national housing crisis — are aimed at converting thousands of short-term rentals into long-term rental housing for people who work and live in the province.

Despite pressure from vacation-rental owners, Premier David Eby and Housing Minister Ravi Kahlon have not backed down from the controversial initiative to "rein in profit-driven mini-hotel operators" and return homes to people who need them.

The clock is now ticking on hefty fines for those who don't fall in line.

Kahlon, in a phone interview on Tuesday, said owners and operators have had since October to prepare for this week's enforcement of the new rules — to sell their properties or find the right long-term rental opportunities — and wide compliance is expected.

Short-term rentals are now limited to a principal residence or basement suite, laneway or garden suite on the same property in communities with populations of 10,000 or more.

Strata hotels and motels that were operating in a manner similar to a hotel or motel before Dec. 8, 2023, and that meet certain criteria, will be exempt from the principal-residence requirement.

Analysis from short-term rental data analytics company AirDNA from March 2024 shows more than 19,000 homes in B.C. are being listed as short-term rentals for the majority of a calendar year.

"We're trying to find a balance," said Kahlon. "Short-term rentals are still going to be available for people but we need to ensure that people that are investors that are going in and buying multiple homes and moving them away from long-term rentals, that's not something that we want to see."

The province says its digital database — which it calls unique in Canada — will allow local governments to input information on all licensed rentals so companies can remove listings on their platforms that do not comply.

"We expect [on May 1] local governments will start submitting — through the data portal — individual addresses of hosts that are operating in their communities without proper local government approvals," said Kahlon.

Hosts and platforms such as Airbnb and VRBO have up to five days to respond by removing the listings that don't have the proper permitting, "so that we can ensure that housing that is desperately in our communities is available for people," said Kahlon.

By May 6, the platforms must show they are eliminating unlicensed listings or fines will be issued.

Administrative penalties for hosts breaking the rules range from $500 to $5,000 a day for each infraction and up to $10,000 per day for corporations.

Visitors and guests will not face any fines. Visitors with stays booked after May 1 are encouraged to check their local government regulations and B.C.'s new short-term rental rules.

Four government staff will oversee the enforcement, with funding for up to 15 people if needed, said Kahlon.

There will be a "bit of a grace period" for those few operators who weren't aware of when the primary-residence requirement kicked in, said Kahlon.

But there will be be no such grace period for operators who should be well aware or who have already received warnings from local governments about contravening municipal short-term-rental rules.

"The new commissioner that we've hired will be able to go through those case by case to make sure the information is available," said Kahlon.

Victoria is one of about 30 cities in the province that already have short-term rental rules.

Mayor Marianne Alto said because the local and provincial regulations are similar, the only major differences now are that previously so-called non-conforming short-term rentals that were allowed to operate in the city won't be able to do so under the new provincial rules.

Also, the city will now have help with enforcement — the teeth in the legislation it wanted.

"We're happy that they're going to take that on because it's been, certainly, a lot of work for us to do that kind of enforcement," said Alto. "And so now data collection and sharing is a lot easier."

For those operating legally, it will just mean they need to apply annually locally for their license, she said.

Alto said she's "heartened" to hear there will be a grace period for those out of the loop. "There will be people who despite the enormous amount of attention this has had, there's going to be the odd person who's going to say: 'Oh, really? Does that apply to me?' "

For 17 initially exempt communities that requested to opt into the principal-residence requirement — including Tofino and Gabriola Island— the new short-term rental rules will take effect Nov. 1.

Kahlon, who was born and raised in Victoria by a dad who was a taxi driver and a mother who ran a restaurant, said he well understands that cities like Victoria rely on visitors.

"I get it, tourism is important for our community, but if my friends that I grew up with can't afford to raise their kids in the same community that we grew up in, that's something that we have to address and that's what this legislation is about," said Kahlon.

Still, the new rules have angered some who purchased condos and houses to rent out on a short-term basis as a retirement investment and others who believe they will adversely affect tourism and cause hotel prices to spike.

Alto said she's aware of those arguments. "Part of this is a much larger conversation I think society has to have about whether or not housing is a commodity, and is it the same thing as food and water or is it in a different category?

"In the context of what I understood to be the motivation behind the province, it is legitimately a desire to create every potential opportunity to create long term housing and this is just one of those ways."

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- A full list of communities and an interactive map of where the Principal Residence requirement applies can be found here: https://www2.gov.bc.ca/gov/content/housing-tenancy/short-term-rentals/principal-residence-requirement

- For more information for visitors staying at a short-term rental, visit: https://www2.gov.bc.ca/gov/content/housing-tenancy/short-term-rentals/information/visitors