A couple of days ago Premier David Eby announced sweeping changes to the rules around short term rentals typically provided through companies like Air BnB, VRBO and Expedia.

They will also apply to people posting privately on sites like Facebook Marketplace, Kijiji, Craigslist as well as classified ads in newspapers.

That was taken right from the BC Government website, yes it did say newspapers and referenced Craigslist!

These changes will not apply to reserve lands, hotels and motels as well as any treaty lands or treaty first nation unless the nation decides to opt into all or part of the legislation.

That last part will be interesting to see, if I were a betting man, I would probably put my money on them deciding not to opt into the legislation.

So how will this legislation take effect? 

This right from the BC Government website: “There are parts to this new legislation that will take place immediately, like the ability of regional districts to issue business licenses and increase maximum penalties. Other changes like the Province's principal residence requirement and registration system will come later.”

So here’s what will take place immediately:

1. The maximum fine will increase from $2000 to $50,000

2. In areas where a business license is required, short-term rental hosts will be required to display a valid business license number on their listing.

3. Platform Accountability: If a listing does not include a valid business license, where a business license is required by the local government, the short-term rental platform must remove the listing at the request of the local government.

Under the new rules, short-term rental platforms will be required to share information about short-term listings with the Province. The Province can then share this information with local governments. The Province will keep the short-term rental information confidential and will not disclose it to the public.

Alright here is what will likely take place in the new year:

1. Short Term Rentals will be restricted to the host’s principal residence as well to any secondary suite at the residence

2. This will apply province wide with municipalities with a population of 10,000 or more

3. The Province will establish a short-term rental registry. This will help ensure that short-term rental hosts and platforms are following the rules and provide local governments and the Province the information needed to follow up when they don't.

4. In order to ensure the rules are being followed, the Province will establish a provincial compliance and enforcement unit

Alright the timelines the government is putting in place is as follows:

Immediately after the proposed Bill receives Royal Assent: Increased fines and tickets, business licensing authority for regional districts

May 1, 2024: Principal residence requirement (including definition of exempt areas or accommodations), changes to legal non-conforming use protections

Summer 2024: Data sharing

Late 2024: Provincial registry launch, requiring platforms to remove listings without valid provincial registry numbers

Recently, in a statement, AirBnB said the legislation will not alleviate the housing crisis but instead will take money out of people's pockets, inflate the cost of accommodations for visitors and decrease tourism revenue.

Quote: "We hope the B.C. government will pursue more sensible regulation and listen to the many residents – hosts, travellers and businesses – that will be impacted by the proposed rules,"

Ok so let’s talk about how this is and what kind of an effect it’s going to have on the market, specifically here in the Okanagan.

According to AirDNA, a platform that tracks short term rental statistics, there are approximately 1727 total STR listings in Kelowna and the surrounding areas including Lake Country and West Kelowna. 

The vast majority, approximately 1599 are listings of the entire home and not just a room in the home. 

Now this data is just restricted to AirBnB and VRBO, the two major platforms in the area when it comes to short term rentals. This does not include those that are running their own STR on sites like Facebook Marketplace or Kijiji.

I am sure the actual number of units is probably closer to 2000 if you factor in all platforms and private listings.

So think about the Okanagan in the summer, our population here almost doubles during July and August, the short term rental market is going to dry up by May of 2024.

This will put a ton of pressure on the hotels and motels in the area that are already booked up through those summer months.

When supply is restricted, what happens to pricing?

It will increase. And likely to a level that will price individuals and families out of the market.

It is already expensive to visit here, gas is high, price of groceries is higher than ever before and now our tourism industry is going to be hit hard because of the restrictions being put into place.

My estimation is that well over half of those units will be gone from the short term rental pool which will drive the cost of hotel and motel rates through the roof. Lack of supply and the same demand as previous years and this will absolutely become a reality.

This will have an effect on every business in the central Okanagan that relies on tourism to pay their bills and to turn a profit.

Now let’s look at this from the governments side, they want to open up long term rental options for people, which incidentally, I don’t disagree with.

In order for these AirBnB operators to shift to a long term rental model they are going to have to charge rents that cover the cost of their mortgage, utilities, taxes and provide some kind of cash flow or profit margin.

According to RentFaster dot ca, the average rent for a single family home in Kelowna and the surrounding area is $3700.

Now I would expect rents to come down just a little bit as more inventory hits the market, but look for rents to likely increase as a result of owners and landlords that will look to cover the costs of keeping a single family home in the central okanagan.

The vacancy rate in Kelowna according to CMHC is sitting at 1.2%, the increase of rental units by restricting AirBnB and forcing these units into the rental pool will have a negligible effect on the vacancy rate here.

Even if all 1727 units come into the rental pool, which is highly unlikely, the vacancy rate likely wouldn’t even touch 2%. 

Realistically, out of those 1700 units we will probably see a lot of these homes being listed for sale as they won’t be able to stay net positive without the air bnb model.

If that happens, there would be even less inventory going into the rental pool, so one would have to wonder why the province is moving forward with such a punitive plan.

According to the government, they think that this new legislation will bring 16,000 new rental units into the pool and they hope that it alleviates the pressure on the housing crisis.

Based on the Okanagan model, I don’t see this happening. I think it looks good as a white paper and would certainly be a good discussion for experts and pundits alike.

Time will tell if the theory works to alleviate some of the stress, in the meantime, there will be a lot of people and businesses affected by this legislation.

The one big unknowns right now, after having had a quick chat with city planning, is how developments like Playa Del Sol will be affected. Will the city be allowed to apply for an exemption for these kinds of properties because of how they have been approved by city of Kelowna bylaws?

Also an unknown is how exemptions will play out, what if a city already has a healthy vacancy rate? Take West Kelowna as an example, their vacancy rate is 3%. Could they or better yet, should they be exempt from these rules as a city with a population over 10,000?

The legislation seems rushed and not really that well thought out.

I feel that it is punitive and is not going to have the desired effect that the government is hoping for.

What do you think about the legislation? I am interested to hear your comments below!

As always, if you are thinking of making a move into or out of Kelowna then we should talk, you can reach me on my cell at 403-827-7527 or by email at info@livelovekelowna.ca

Last month I told you I would have some exciting news that I am only making known to my clients at this point.

Well, it is official now, as of last week I have officially joined RE/MAX Complete Realty in Calgary and the RE/MAX in Kelowna.

All of my contact information will remain the same, nothing changes there, the big change is being aligned with the #1 most trusted brand in real estate.

Ok, now that's over with, on to the rest of the email!

📊 Rate Hikes & What That Means for Markets

💰 Quick Calgary Update

🏡 Quick Kelowna Update

🔥 How are Forest Fires Impacting the Housing Market?

📧 Save my Contact Information

______________________________________________________________________________

📊 It seems like every email I have sent you this year I have talked about rising rates, I really wish I didn't have to do that. It is time for the BoC to actually stop this madness and watch to see what (if any) affect there is on the marketplace. Many economists agree with this sentiment, so hopefully they listen to that advice. The BoC rate is now at 5% which is the highest it has been in over 20 years, typically we see a levelling off period with sales and a quick adjustment by buyers. We will see a lot of buyer's fulfill their rate holds in the next couple of months and that period of adjustment will happen, whether there is a positive bounce back remains to be seen.  Here's an article regarding a number of different local markets, click to see if yours is covered.

💰 Now that Stampede is officially over with record setting attendance, the craziness of the market will likely continue for the short term. There is always a bit of a slowdown in the market come end of August to about mid September, so if you are thinking of selling we should probably talk sooner than later. The month of June saw 1525 Single Family sales which was an increase of 3% from June of 2022. There are currently only 1323 single family listings on the market with 335 properties pending and 622 sales so far this month. Prices have increased steadily, for the first time in a very long time (think more than a decade) apartment and townhouse pricing is outpacing single family home prices. If you want more detail on these stats specific to your area, then email me back.

🏡 The overall benchmark price for single family homes is down 3.1% from last years numbers. Sales are up however for the month of June compared to last year, which is a good sign. However, that said, we are likely to see that same downturn in the market that Calgary is going to see. My prediciton at the beginning of the year was that the Kelowna market would balance out by this time in 2023, my revision is that balance will not likely come until closer to the end of the year. Sellers have to continue to have patience, while buyer's will continue to have their pick of the lot.

🔥 Given that we are seeing record numbers of forest fires in the country this year (I believe AB is down, but BC is up...don't quote me on that), I thought this article would be fairly relevant. Construction costs have skyrocketed and lack of supply due to a decrease in housing starts is what is fuelling new home price increases.

📧 Like I mentioned my contact info has not changed, if you are wanting to get a hold of me then reply to this email. If you are in Kelowna you can always reach me at info@livelovekelowna.ca, my BC number is 778-716-7527. My AB number is 403-827-7527. Make sure you save it in case you need it!

That's all I have for you this month! 

All the best,

KELLEY SKAR

If you are looking at making a move to the Central Okanagan and are stuck on a community to live in then you should check out some of our blogs as we cover areas like Vernon, Kamloops as well as the differences between Calgary and Kelowna.

In today’s blog and video below, I discuss the similarities and the differences between Kelowna and West Kelowna.

What are the Similarities between Kelowna and West Kelowna?

As you have probably guessed, both Kelowna and West Kelowna are located in the heart of the Okanagan Valley, surrounded by beautiful mountains and lakes. They both offer a variety of outdoor activities, including hiking, mountain biking, and skiing. 

Both cities have neighbourhoods with a great focus on families, as well as easy access to all three levels of schools. Not only are there some amazing parks, ball diamonds and soccer and football fields but you also have access to whatever sport our kids want to play through various sports leagues.

In fact, I did a video on those Kelowna sports leagues in the link right above my head!

They both obviously enjoy a thriving wine industry, with numerous wineries and vineyards in the area. Visitors can enjoy wine tasting tours and explore the local cuisine.

Both Kelowna and West Kelowna have stunning beaches that are perfect for swimming, sunbathing, and water sports. Some of the most popular beaches in the area include Gyro Beach and the Downtown Park in Kelowna and Gellatly Bay Beach in West Kelowna.

I would say that’s pretty much where the similarities end so now, let's take a look at the differences between Kelowna and West Kelowna.

What are the Main Differences Between Kelowna and West Kelowna?

West Kelowna is much smaller compared to Kelowna. It has a more laid-back atmosphere and is known for its stunning natural scenery and peaceful lifestyle. The population of West Kelowna sits at just over 38,000 people and makes it the third largest city in the Okanagan.

Kelowna, on the other hand, is a much larger city with a population sitting around 142,000 people. The city has a bustling downtown core and a vibrant nightlife and is also home to universities and colleges, making it a popular destination for students.

As we have already established, both cities have some amazing wineries to choose from, if we are looking specifically at spirits, wine and beer, I would say this is where the similarities end as Kelowna has a burgeoning craft beer scene that is currently not even close to be being rivaled by West Kelowna.

Kelowna has a more diverse economy, with industries such as technology, healthcare, and tourism driving its growth, while West Kelowna is more focused on agriculture and tourism."

So there you have it, the top similarities and differences between Kelowna and West Kelowna. 

If you are thinking of relocating or selling your current home and making a move to Peachland, West Kelowna, Kelowna or Lake Country, then we should talk.

You can always shoot me an email to info@livelovekelowna.ca or give me a call at 778-716-7527.