British Columbia (really most of Canada) is grappling with a severe housing crisis, marked by a shortage of affordable long-term rentals and attainable housing options. This crisis is significantly exacerbated by the rise of short-term rentals, where over 16,000 entire homes are being used for this purpose, making it increasingly challenging for residents to secure affordable housing. In response, the BC government has introduced the Short-Term Rental Accommodations Act to alleviate the housing crisis by returning valuable housing inventory to the long-term rental market. These new regulations have the potential to ripple into Alberta, as investors may seek opportunities beyond BC's borders and international visitors may look for more stable and affordable rental opportunities when planning a trip to Canada.
BC's Housing Crisis
The scarcity of affordable housing, including long-term rentals, has become a pressing issue in British Columbia. Short-term rentals, particularly entire homes, are viewed as a major contributor to the problem, occupying housing units that could otherwise serve residents seeking stable accommodations. Local governments have taken steps to regulate short-term rentals, but enforcement of these bylaws remains a challenge, prompting a call for additional resources and tools.
Primary Goals of the Legislation
The newly introduced regulatory measures have three key objectives:
Returning Units to the Long-Term Rental Market: The most critical goal is to return short-term rental units to the long-term rental market. By achieving this, British Columbia hopes to mitigate the housing shortage, ensuring that more affordable housing options become available to residents through existing dwellings with new construction and development opportunities not keeping up with current demand.
Empowering Local Governments: These regulations aim to provide local governments with the tools needed to enforce short-term rental bylaws effectively. This empowerment allows local authorities to address the housing crisis at the community level.
Provincial Oversight: These regulations establish a provincial role in the oversight of short-term rentals, ensuring that standards and compliance are consistent across the province.
Scope of the Regulations
The new rules encompass all short-term rentals offered to the public, including various platforms like Airbnb, VRBO, Expedia, and other web listings such as Facebook Marketplace, Kijiji, and Craigslist. However, specific exemptions include reserve lands, Nisga’a Lands, Treaty Lands of a Treaty First Nation (unless a coordination agreement is established with the Province), hotels, and motels. The new legislation doesn’t apply to any municipalities with a population of less than 10,000 that aren’t immediately adjacent to larger municipalities (ie. greater Vancouver area), any of the 14 designated resort communities (Fernie, Golden, Harrison Hot Springs, Invermere, Kimberley, Osoyoos, Radium, Revelstoke, Rossland, Sun Peaks, Tofino, Ucluelet, Valemount, and Whistler) or are an Agri-tourism business.
Key Changes and Implications
The new regulations introduce several significant changes, including:
Strengthened Enforcement Tools: Regional districts will witness a substantial increase in the maximum fines for bylaw violations, rising from $2,000 to up to $50,000. This aligns with municipalities under the Community Charter, equipping local governments with more robust enforcement capabilities.
Business Licensing Authority: Regional districts will gain the authority to regulate and license short-term rentals, similar to municipalities, under amendments to the Local Government Act. This ensures a uniform approach to regulation.
Display of Business License: In areas where a business license is required, short-term rental hosts must display a valid business license number on their listings, enhancing transparency.
Platform Accountability: Listings without a valid business license, where required, must be removed by the short-term rental platform at the request of the local government.
Data Sharing: Short-term rental platforms are obligated to share listing information with the Province, which is then shared with local governments to facilitate effective bylaw enforcement.
Returning Units to Long-Term Rental Market
To fulfill the goal of returning units to the long-term rental market, the regulations implement a provincial principal residence requirement. This requirement limits short-term rentals to the host's primary residence, along with one secondary suite or accessory dwelling unit. The principal residence requirement applies province-wide in municipalities with a population of 10,000 and over, and adjacent communities.
Exemptions for specific areas or accommodation types may be defined in future regulations. Local governments can also request to "opt in" to or "opt out" of the principal residence requirement, depending on local vacancy rates.
To ensure compliance with the new rules, the Province will establish a short-term rental registry. Hosts will need to include a provincial registration number on their listings, along with their business license number if required. Short-term rental platforms must validate these numbers against the provincial registry data.
Additionally, a provincial compliance and enforcement unit will be established to track compliance, issue orders, and administer penalties for violations.
Implications for Alberta
The introduction of these regulations in BC has sparked discussions about potential implications for Alberta's real estate landscape. As investors in BC navigate the changing regulatory environment, Alberta may emerge as an attractive destination for those seeking new opportunities in the short-term rental market. The possibility of a more stable regulatory environment in Alberta, combined with the potential for increased demand in this sector, could lead to investors selling their BC properties and venturing into Alberta or other parts of Canada. The stringent limitations on short-term rentals in BC may divert tourism dollars to other regions in Canada, like the Bow Valley, where a wider range of more affordable accommodation options are available, potentially attracting more visitors and bolstering local tourism economies.
If you are looking to purchase a vacation rental property in Canmore, you may want to secure a purchase sooner than later in the event that we do see an influx of BC investors looking to move their for profit housing investments to other markets.
For prospective homebuyers in Canmore, the impact of BC investors shifting their focus to the Bow Valley should be minimal. Canmore has been proactive in addressing short-term rentals long before online platforms like Airbnb and VRBO became popular. The town's Land Use Bylaws have already established clear guidelines for short-term rentals – a property must have "Visitor Accommodation" or "Tourist Home" designated as a permitted use. Licensing requirements, much like those soon to be introduced in BC, have been in place for years. These regulations are aimed at preserving existing residential inventory from being converted into short-term rentals and safeguarding long-term renters from potential displacement by landlords seeking higher profits through short-term rentals. While tackling the housing crisis is crucial, Canmore's unique challenges are driven by various factors, including residential properties that remain vacant and a focus on Visitor Accommodation developments rather than residential ones, which does not effectively address the town's supply issue or provide affordable housing for its residents. Adopting a similar approach to BC's Short-Term Rental Accommodation Act wouldn't provide a viable solution to Canmore's housing crisis, as the town has already implemented similar control mechanisms to prevent or discourage the conversion of long-term rentals into short-term ones.
BC's new regulations for short-term rentals represent a concerted effort to address the housing crisis by returning valuable housing inventory to the long-term rental market. While the impact on BC's real estate and tourism industries is evident, the implications for Alberta may include an influx of investors looking for more favorable conditions. As these regulations unfold over the next two years, it's essential to stay informed about how they shape the real estate landscapes in both provinces, working toward a balance that benefits residents, investors, and the broader community.