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New Rules for Short-Term Rentals

This news is from B.C. but it’s being studied all across Canada, including Alberta, and it may very well be legislated in our province sooner than later.

Essentially, short-term rentals (STRs) in B.C. (Airbnb or otherwise) will be banned almost entirely as of May 2024. The exceptions are rentals attached to the owner’s principal residence or in municipalities with populations less than 10,000 (but they can still opt-in).

The idea is to free up more long-term rentals (LTRs) to deal with sky-rocketing rents. 

There are an estimated 28,000 STRs across BC, and a significant percentage are not attached to the owner’s principal residence, so this legislation will theoretically free up thousands of LTRs.

More LTR inventory means more affordable rents for those who are struggling. That’s the good news.

But as with all government legislation interference, there are winners and losers. After all, why do we have so many STRs in the first place? 

It’s because there’s a high demand for them, and the market is highly efficient! Where there’s demand, entrepreneurial people try to meet it with additional supply.

However, artificially decreasing the supply of STRs (against natural market forces) means higher prices to consumers for the remaining inventory of STRs (and hotel rooms). This could ultimately have severe negative consequences for B.C.’s tourism industry.

For example, my wife and I have rented the same Airbnb in Kelowna for the past few summers. It’s a nice little place half a block from the beach, and it’s attached to the owner’s principal residence, which means the owners can continue operating it. They will benefit greatly from the new legislation because they’ll be able to charge more since there will be fewer competitors.

But I’ll be thinking twice if I have to start paying $500 a day for that dinky little Airbnb. Perhaps we’ll reconsider Kelowna and think about a more affordable place to vacation (not in B.C.)

The point is not to whine about my personal situation. After all, the cost of LTRs is a much bigger and more serious societal problem. But there are always other ramifications whenever the government implements a new rule, despite their best intentions.

Rather than artificially creating new restrictions and a shortage of STRs, how about removing restrictions and red tape for builders so they can more easily fill the demand for housing and solve the shortage of LTRs once and for all?

This is only my personal viewpoint, of course. What do you think?