BC government reveals new policies to crack down on short-term rentals

BC government reveals new sweeping policies to crack down on short-term rentals

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Sweeping changes are coming to the short-term rental market across British Columbia, and it is all driven by new regulations pushed forward by the provincial government.

In a press conference Monday morning, after hinting earlier this year that such policies would be forthcoming, Premier David Eby announced a multi-faceted, phased approach to cracking down on short-term rentals to help tame the housing affordability and supply crisis.

The outlined measures are closer to an enhancement, refinement, and expansion of the City of Vancouver’s regulations province-wide than the new policies in place in Quebec and New York City that have had the effect of wiping out legal short-term rentals.

More specifically, the new proposed legislation for BC will eliminate multi-property short-term rental businesses and preserve the ability for homeowners to lease a space within their principal residence and a secondary suite on platforms such as Airbnb and Vrbo. But there will now be new enforcement tools (including a new provincial enforcement unit), increased fines, and a new provincial registry tracking the use of homes for overnight visitor accommodations.

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There are currently about 28,000 short-term rental listings across BC, representing an increase of 20% from 2022. The provincial government and researchers believe the proliferation of short-term rentals now has a measurable impact on the availability and affordability of long-term rental homes for people who live, work, and study.

Overall, it is estimated that 40% to 50% of the listings are non-compliant, according to the province.

Various research shows over 16,000 “entire homes” have been pulled from the long-term rental housing market for residents, the short-term rental market is dominated by a small segment of profit-driven operators akin to mini-hotel operators, and the top 10% of hosts earned 49% of all revenue, with nearly half of all short-term rental properties holding multiple listings.

“The number of short-term rentals in BC has ballooned in recent years, removing thousands of long-term homes from the market. That’s why we’re taking strong action to rein in profit-driven mini-hotel operators, create new enforcement tools, and return homes to the people who need them,” said Eby.

BC Minister of Housing Ravi Kahlon added, “The short-term rental market is creating serious challenges in BC and around the world. Operators with multiple listings are taking homes off the long-term market to make big profits while people pay the price — it can’t go on like this. The legislation is comprehensive and designed to target areas with high housing needs.”

The provincial government has indicated it is choosing to maintain a “balanced” approach toward addressing housing issues and maintaining tourism-supporting overnight accommodations considerations.

Here is a full breakdown of BC’s new short-term rental regulations under the proposed legislation:

Short-term rentals only in principal residence with a secondary unit

Moving forward, short-term rentals will only be permitted in properties that are classified as the principal residence of the host, with the principal residence also containing a secondary suite such as a basement unit, laneway home, or garden suite. Hosts can still rent out their home when they are away or a secondary suite if permitted by local bylaws.

Furthermore, this principal residence requirement is only required within municipalities with a population of 10,000 or more. Regional districts and resort municipalities, such as Whistler and Sun Peaks, are also exempt.

This principal residence policy is only optional for municipalities with a population under 10,000, except for small jurisdictions adjacent to large municipalities. Small communities adjacent to larger municipalities are defined as smaller communities less than 15 km away from a larger community with the principal residence requirement.

Larger communities with a population of over 10,000 but have a rental vacancy rate above 3% — considered a rate that is in the health range — can also opt out. Moreover, any jurisdiction that is exempt can opt in if the local government chooses to do so.

According to the provincial government, there are currently 30 municipal governments that have their own bylaws or license fees regulating short-term rentals. The new provincial legislation will increase this number to up to a total of 64 municipal jurisdictions, including 58 jurisdictions with a population of over 10,000 and six jurisdictions that are deemed adjacent to larger municipalities.

The new policies related to the principal residence requirement will come into effect on May 1, 2024.

New provincial registry

By late 2024, the provincial government will establish its own provincial host and platform registry.

Short-term rental listings will need to include the business licence number provided by the local government and the provincial registry number.

Furthermore, the provincial government will create its own compliance and enforcement unit for short-term units to track compliance, issue orders, and administer penalties for violations.

Increased fines and enforcement by local governments

Municipal governments will be able to increase their non-compliance fines from the existing maximum rate of $1,000 per day to up to $3,000 per day, based on each infraction.

The maximum penalty that regional districts can levy will be increased from the current maximum of $2,000 to up to $50,000. Regional districts can also issue business licences to regulate short-term rentals in rural areas.

These new fines and enforcement tools for local governments will come into effect as soon as the legislation receives Royal Assent.

Short-term rental platforms will be required to provide data to the provincial government on their host’s listings, with this information used to support tax auditing and shared with local governments to assist with enforcement and compliance efforts. No private information about hosts will be released publicly.

Under the new regulations, the platforms will have to remove a host listing within days when there is no valid local government business licence or provincial registration in place.

The platforms will be required to share their data with the provincial government starting in Summer 2024.

According to the provincial government, in the order of population size, the communities with a population of more than 10,000 people are (jurisdictions with an *asterisk have a rental vacancy rate above 3%):

Vancouver
Surrey
Burnaby
Richmond
Abbotsford
Coquitlam
Kelowna
Township of Langley
Saanich
Delta
Nanaimo
Kamloops
Chilliwack
Victoria
Maple Ridge
District of North Vancouver
New Westminster
Prince George*
Port Coquitlam
City of North Vancouver
Langford
Vernon
West Vancouver
Mission*
Penticton
West Kelowna*
Campbell River
Port Moody
North Cowichan
City of Langley
Courtenay
Squamish
White Rock
Fort. St. John*
Cranbrook
Salmon Arm
Pitt Meadows
Colwood
Port Alberni
Oak Bay
Esquimalt
Central Saanich*
Lake Country
Sooke
Comox
Powell River
Parksville
Dawson Creek*
Sidney
Prince Rupert*
North Saanich
Summerland
Terrace
View Royal
Coldstream
Nelson
Williams Lake*
Sechelt

Small communities that are classified as adjacent communities and will have the primary residence requirement:

Qualicum Beach
Metchosin
Duncan
Cumberland
Highlands
Anmore

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