How BC’s New STR Regulations Affect Okanagan Cities

In late 2023, the BC government announced sweeping changes to regulate the short term rental (STR) market across the province, which come into effect May 1st, 2024. As the Okanagan’s economy is heavily dependent on tourism, many municipalities pushed back to advocate for the autonomy to enforce their own short term rental bylaws. However, most cities did not meet the provincial requirements for exemption of a minimum vacancy rate of 3% for two consecutive years, so now must fall in line with the New Short Term Rental Accommodations Act.

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Below is a summary of the new rules, how each municipality around Okanagan Lake will be affected by these regulatory changes, and what that means for Air BNB hosts.

Table of Contents

Summary of BC’s New STR Rules

The new legislation restricts all short term rentals to a homeowner’s principal residence plus one secondary suite or accessory dwelling. To be clear, a principal residence means “the place where an individual lives in for a longer period in the calendar year than any other place”.

This means a property’s principal use can no longer be a short term rental. It must be primarily the homeowner’s residence, which can then be rented out for a shorter portion of the year, if the other regulatory criteria are met.

The other major change the province implemented is the definition of a short term rental changed from any stay less than 30 days to now any stay less than 90 consecutive days.

Finally, all STRs must have a valid business license, if required by the municipality, with a registration number that needs to be displayed on all listings and advertisements for the short term rental.

Penalties

The maximum fine has been increased to $3,000 per infraction, per day, up to a maximum of $50,000 for bylaw offences.

Who is Exempt

The provincial rules don’t apply to self-governing First Nations Lands, such as Westbank First Nation.

Municipalities with a rental vacancy rate greater than 3% for two consecutive years (based on the data reported by the CMHC) can apply to “opt-out” of the STR Accommodation Act.

The following are also exempt from the new rules:

Municipalities less than 10,000 people and not within 15km of a larger municipality

  • Mountain & Resort Communities
  • Regional District Electoral Areas
  • Time shares & fractional ownership
  • Strata hotels & motels
  • Student housing (owned and operated by the school)
  • Outdoor Recreation Lodges (for fishing, hunting, etc.)
  • Farm land (Class 9)
  • Home exchanges
  • Strata guest suites

In the Okanagan, these areas are exempt from the new rules:

  • West Kelowna
  • Westbank First Nation
  • Peachland
  • Naramata
  • Big White Ski Resort
  • Silver Star Ski Resort
  • Apex Ski Resort

These are the Okanagan Cities where the New STR Rules apply:

  • Kelowna
  • Lake Country
  • Vernon
  • Coldstream
  • Summerland
  • Penticton

In Summary, while some cities and towns are exempt from the new rules, the reality is that most municipalities already have bylaws established to restrict the use of short term rentals. The difference now is that cities can only be more restrictive than the province in where they allow STRs, but they can’t be more permissive. For example, Kelowna had proposed a plan to allow STRs to continue as a primary use in certain buildings, but the province denied their request to do so because it went against the primary residence requirement. As a result, Kelowna could only allow STRs to continue in primary residence properties that had a valid business license to operate.

How the New STR Rules Apply to Cities in the Okanagan

What follows is a brief summary of how each Okanagan municipality’s STR bylaws stack up with the provincial rules.

Big White, Silver Star & Apex Mountain Resorts

Ski resorts in rural areas and BC Parks resorts are exempt from the “Principal Residence Requirement”, even if the electoral area within which they are situated elects to “opt-in”. 

Kelowna

Sunset over Kelowna

City bylaws now mirror provincial rules

  • You must have an existing STR license to operate & display the registration number on all listings
  • No new STR licenses will be granted by the City
  • STRs only allowed in your principal residence, or a secondary suite or carriage house on the same property
  • Can accommodate maximum of six adults per listing
  • The primary use of the property can no longer be a STR
  • Licenses for principal use STRs are now invalid
  • Buildings that were formerly purpose built for short term rentals can now only operate as one if the unit being rented is the host’s primary residence, and the host has a valid business license to operate. This applies to:
    • Discovery Bay, Sunset Waterfront Resort, Brooklyn on Bernard, 1290 Sole, 1350 Sole, Playa Del Sol, Borgata Lodge, Pinnacle Point, Granite at McKinley Beach, Cambridge House, Mission Shores, Aqua, Caban, and Movala.

West Kelowna

Successfully opted out of provincial rules, but city bylaws still apply:

  • STR license required to be displayed in all listings and advertising
  • “Short Term” = less than 30 days
  • Only allowed in single detached homes, secondary suites & carriage houses
  • Must be the host’s principal residence

 

The following tourist resorts don’t need to be a principal residence to operate as an STR:

  • Seclusion Bay
  • Barona Beach
  • The Cove
  • Casa Loma Resort
  • Boucherie Beach Cottage
  • Paradise Escapes

 

Westbank First Nation

Provincial rules don’t apply, but bylaws still apply:

  • Property must be zoned to allow short term rentals
  • If not zoned for STR, an application for rezoning can be made through WFN’s planning department
  • A business license is required

 

Currently Copper Sky and Shelter Bay are the only buildings zoned for short term rentals.

 

Peachland

Has a population under 10,000, and provincial rules don’t apply, but the city was considering requesting to opt-in to the new regulations. In January 2024, council said they would hold a town barbecue in June to obtain public input before discussing the motion in Fall of 2024. In the meantime, Peachland bylaws continue to be in effect, where short term rentals fall under the Bed and Breakfast category.

  • Whole dwelling units including garden suites are NOT permitted to be rented out short-term.
  • You must hold a secondary suite license AND a business license to operate
  • Property must be zoned to allow short term rentals
  • Property must be the licensee’s principal residence
  • No more than 4 bedrooms to be used for the Bed & Breakfast / short term rental
  • No more than 8 patrons to be accommodated at one time
  • Guests can stay no longer than 30 days in a 12 month period

Lake Country

Doesn’t qualify for exemption from Provincial rules, and city bylaws state:

  • STR business license required & must be displayed on all advertising
  • STRs allowed only in your principal residence
  • Not allowed within a secondary suite
  • Max 4 bedrooms per listing
  • The primary use of the property cannot be a STR
  • Still accepting applications for new STR licenses

Vernon

Doesn’t qualify for exemption from Provincial rules, but STRs are allowed within their bylaws

Summerland

Doesn’t qualify for exemption from Provincial rules, and city bylaws state:

  • STR business license required & must be displayed on all advertising
  • STRs allowed only in your principal residence
  • No “whole house” rentals permitted, only allowed in rooms or a suite within the house, or contained in a separate dwelling onsite (i.e. carriage house)
  • Must be zoned to allow STRs
  • Only one STR per property allowed
  • Maximum 4 bedrooms and 8 guests

Penticton

The City attempted to opt-out, but was denied their request. They’ve now aligned their bylaws and licensing requirements with the new provincial rules. This means that as of May 1, 2024, short-term rentals will only be permitted as part of a principal residence. This also means that you will not be able to operate a short-term rental in a non-principal residence, even if you hold a business license valid for 2024 from the City. 

  • City bylaws now mirror provincial rules
  • STR business license required & must be displayed on all advertising
  • STRs allowed only in your principal residence or within your carriage house or secondary suite
  • Allowed in any residential zone
  • The primary use of the property can no longer be a STR
  • Accepting applications for new STR licenses for properties that conform to the new rules

Naramata

According to the provincial exemptions, Naramata does not need to follow the new STR Accommodations Act. However, some citizens wish to opt-in and have started a petition for the Regional District to have their area included in the legislation.

On March 21, 2024, the RDOS Board voted to request the three electoral areas below “opt-in” to the new rules:

  • Electoral Area D (Skaha East, Okanagan Falls)
  • Electoral Area F (Greater West Bench, Rural Summerland, Okanagan Lake West)
  • Electoral Area I (Skaha West, Kaleden)
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