Community Planning

A First Look at How the City Plans to Regulate Airbnb in Kelowna

We are encouraged that the issue of short term rentals is being taken fairly seriously now

Last week, the City of Kelowna’s Community Planning office released its proposed short term rental regulations to stakeholders for consultation. These stakeholders include tourism industry representatives like the Kelowna Motel Hotel Association, Tourism Kelowna, neighbourhood associations, strata councils, short term rental platforms, Landlord BC, Renters United Kelowna, and the Healthy Housing Advisory Committee. These organizations have until the end of the month to submit their feedback to the city office.

Following the stakeholder consultation feedback, the Community Planning office will finalize the proposed regulations and present them to council along with a corresponding business licensing and enforcement strategy at some point next month, followed by bylaw amendments that will include a public hearing early in the new year.

Back in mid July, Kelowna’s Community Planning Supervisor, Laura Bentley submitted the Short Term Rental Accommodation Regulatory Direction to council, laying out the city staff’s vision to introduce regulations limiting short term rentals, and council was quick to endorse it.

The report toughened up (non) existing AirBnb/VRBO allowances to ones primary dwelling, however left all commercially zoned apartments wide open to short term rentals. This basically included all apartments in downtown Kelowna. Naturally there was much concern among locals wishing to improve the massive housing vacancy and affordability issues facing Kelowna (we also wrote about this at the time).

The lawlessness over Kelowna’s short term rental market peaked earlier this year when Kelowna’s largest developer, Mission Group Enterprises began marketing their new downtown condo project, “Brooklyn” as having no “rental restrictions”. We’ve highlighted the most interesting part of an email we received in mid summer from the developer.

So after some pushback in a public council meeting regarding the rezoning of the Brooklyn on Bernard, the city decided to take a look at regulating commercially-zoned apartments downtown. To wit, Laura Bentley and her team have proposed a sweeping change to the rules that at first glance would seem to go a long way in combatting Kelowna’s ailing rental vacancy rate if it were to be approved early next year – that “short-term rental accommodation be secondary to a principal dwelling unit (e.g. single family home, townhouse, apartment) and restricted to the operator’s primary residence in most residential and commercial zones”. That’s big!

A change like this would extend to and affect a majority of downtown dwellings – residential apartments in commercial zones including Mission Group’s “Brooklyn” development. Take a closer look at the two charts that are included in the Community Planning office’s proposed regulations:

The urban commercial section covers just about every building downtown.

The new proposed regulations now limit the scale of the use of homes being rented out to three rooms maximum – no more huge house parties as the emphasis is on being a good neighbour.

Laura Bentley was interviewed last week by CBC Daybreak South’s Chris Walker (begins at 1:59:20), where he asked Laura specifically about the implications these new proposed regulations would have on Mission Group’s “Brooklyn” (2:02:20), and whether or not a development like this would be grand-fathered in to allow for short term rentals. Her reply:

“For existing buildings where that use has already been taking place legally under the current apartment hotel use, there are some non-conforming use provisions. For buildings that are under construction or there’s future construction, there are some other requirements that they would need to meet so we can have those conversations with developers or future residents in those buildings as they come up, so we’ll have to look at them on a bit of a case by case.”

Let’s hope the deliberations of the next few weeks (among stakeholders and the city) make it a bit more clear what the “non-conforming use provisions” might be, and what specific requirements buildings either under construction, or slated to go into their construction period, are required to meet to be applicable for short term rental use. We hope that if and when these developments are being looked at on a case-by-case basis, that the process is fully transparent and also, not a new loophole. If they are allowing the Brooklyn and others that have sold a majority of units to be exempt from new regulations in order to honour their contracts with consumers, they could just say that.

The planning staff’s propositions also discuss the RM6 zoning that allows short term rentals in tourist areas like Sunset Drive and Playa del Sol. It will be interesting to learn if the city plans on issuing more RM6 zoning (they mention a new “subzone” for RM6) or C9 (the Tourist Commercial zoning that allows short term rentals as a secondary use) going forward – is the “cultural district” suddenly going to become tourist commercial for new builds? I guess we don’t know.

As old pre sharing-economy models, and tourism-at-any-cost mindsets are being replaced by more sustainable thinking, we are encouraged that Kelowna is taking this issue of short term rentals extremely seriously now – the regulatory direction presented earlier in the year was inadequate, and failed to reflect the needs of a growing city grappling to house it’s residents – this is far better. How the city continues to shape regulation here can determine the character of this city for decades to come, and we look forward to hearing about the results that come out of this stakeholder consultation period, and to the public hearing in the New Year.

UPDATE: The city’s community planning department on Monday, December 3rd will present its proposed short-term rental accommodations regulations to council. The document can be read here. They will include requiring a business licence to rent out space and a limit on how many people can stay in a short-term rental. It will cost $345 for a one-year business licence if the rental is in the operator’s principal residence and $750 if it is not. Meanwhile, the maximum number of people who can stay—depending on the zoning bylaws—will be six, and they will be able to use no more than two parking spaces. Short-term rentals can be no longer than 29 days.