British Columbia, a province renowned for its breathtaking landscapes and vibrant urban centres, has long been a magnet for tourists. The proliferation of online platforms like Airbnb and Vrbo has transformed the hospitality industry, offering homeowners a lucrative avenue for generating income through short-term rentals. However, this burgeoning sector has also triggered a wave of concerns, prompting municipalities and the provincial government to grapple with complex legal and social implications for short-term rentals.
This blog delves into the evolving landscape of short-term rental legislation in BC, examining the key legal issues, recent legislative changes, and the potential impact on homeowners and communities.
The Rise of the Sharing Economy and the Short-Term Rental Boom
The advent of the sharing economy has fundamentally altered traditional business models, with short-term rentals emerging as a significant disruptor in the accommodation sector. The ease of listing properties online and the potential for higher returns compared to long-term rentals have attracted numerous homeowners to the short-term rental market. This surge, however, has not been without its challenges.
Housing Affordability
Critics argue that converting long-term rental units into short-term rentals has exacerbated the housing affordability crisis in many BC municipalities, particularly in popular tourist destinations like Vancouver and Victoria.
Community Disruption
Residents have raised concerns about the impact of short-term rentals on neighbourhood character, including increased noise, traffic, and transient populations.
Safety and Bylaw Enforcement
Municipalities have struggled to enforce bylaws related to noise, parking, and building safety in the context of short-term rentals.
Taxation and Regulatory Compliance
Ensuring short-term rental operators comply with tax regulations and licensing requirements has presented a significant challenge for local governments.
Past Legal Framework: A Patchwork of Municipal and Provincial Laws
The regulation of short-term rentals in BC involves a complex interplay of municipal bylaws and provincial legislation.
Municipal Bylaws & The Local Government Act
Under the Local Government Act, municipalities have the authority to regulate land use and business activities within their boundaries. This includes the power to enact bylaws governing short-term rentals, such as licensing requirements, zoning restrictions, and occupancy limits. For example, some municipalities require a business license for a short-term rental. Many also have restrictions in specific zones.
The Strata Property Act
For strata properties (condominiums), the Strata Property Act governs the relationship between strata corporations and unit owners. Strata corporations can enact bylaws restricting or prohibiting short-term rentals within their buildings. These bylaws must be reasonable and consistent with the Strata Property Act.
The Residential Tenancy Act
The Residential Tenancy Act applies to tenancy agreements where a landlord provides a dwelling unit to a tenant in exchange for rent. However, it generally does not apply to short-term rentals primarily for vacation or travel. The distinction between a long-term tenancy and a short-term rental is often crucial in determining the applicable legal framework.
The Short-Term Rental Accommodations Act: A New Era of Regulation
The BC government has increasingly recognized the need for a more comprehensive approach to regulating short-term rentals. The Short-Term Rental Accommodations Act, which was passed in the fall of 2023 and came into effect May 1, 2024, is a significant change. This Act is the provincial government’s attempt to regulate the industry.
The Short-Term Rental Accommodations Act represents a substantial shift in the regulatory landscape, introducing a province-wide framework for short-term rentals. Key sections of the Act are set out below.
Principal Residence Requirement
A primary feature of the Short-Term Rental Accommodations Act is the principal residence requirement. This mandates that short-term rentals can only be operated in the host’s principal residence, meaning the dwelling where they ordinarily reside for the majority of the year. This is designed to return more housing to long-term rentals.
Provincial Registry
The Act establishes a provincial registry for short-term rental operators, which came into effect on May 1, 2025. Short-term rental operators are required to obtain a registration number. This registry will help municipalities enforce bylaws and track short-term rental activity.
Platform Accountability
Online short-term rental platforms will be required to display the registration numbers of listed properties and share data with the province to facilitate enforcement.
Increased Municipal Enforcement Powers
The Act gives municipalities increased powers to enforce bylaws, including issuing fines and suspending business licenses.
Exemptions
Some areas and types of accommodations, such as hotels, motels, and certain resort properties, will be exempt from the principal residence requirement. The Act also allows some municipalities to opt out of the principal residence requirement if the vacancy rate exceeds 3%.
Short-Term Rental Accommodations Act Impacts & Challenges
Implementing the Short-Term Rental Accommodations Act raises several important legal issues and considerations.
Definition of Principal Residence
The Act defines “principal residence” as the dwelling where an individual ordinarily resides most of the year. However, the interpretation of this definition may be subject to legal challenges, particularly in cases where individuals have multiple residences.
Enforcement Challenges
Enforcing the principal residence requirement and other provisions of the Act will require significant resources and coordination between the province and municipalities.
Impact on Tourism
The new regulations could potentially impact the tourism sector, particularly in areas where short-term rentals are a significant source of accommodation.
Conflicts With Strata Bylaws
The interplay between strata bylaws and provincial legislation must be carefully considered. While the Act sets a province-wide standard, strata corporations may impose additional restrictions on short-term rentals within their buildings as long as they do not conflict with the Short-Term Rental Accommodations Act.
Existing Bookings
Hosts will need to adjust to the new rules for a period. The Act will need to address how existing bookings will be handled.
Constitutional Challenges
The Act could face constitutional challenges, particularly regarding the provincial government’s authority to regulate land use and business activities, which are traditionally within the purview of municipalities.
Impact on Homeowners and Communities
The Short-Term Rental Accommodations Act is likely to have a significant impact on homeowners and communities across BC.
Homeowners
Homeowners who rely on short-term rental income may need to adjust their business models to comply with the new regulations. Some may convert their short-term rentals into long-term rentals, while others may seek exemptions or explore alternative accommodation options.
Communities
The Act is expected to increase the availability of long-term rental housing, which could help alleviate the housing affordability crisis in some areas. However, the impact on tourism and the overall economy remains to be seen.
Strata Corporations
Strata corporations will need to review their bylaws and ensure they are consistent with the new provincial legislation. They will also need to develop strategies for enforcing the regulations within their buildings.
Tourism Industry
The tourism industry will need to adapt to the changing regulatory landscape. Hotels and other traditional accommodation providers may see an increase in demand, while the availability of short-term rentals may decrease in some areas.
The Future of Short-Term Rentals in BC
The Short-Term Rental Accommodations Act represents a significant step towards regulating the short-term rentals sector in BC. However, the legislation’s long-term impact remains to be seen. Ongoing monitoring and evaluation will be crucial to ensure the regulations are effective and achieve their goals.
Data Collection and Analysis
The provincial registry and data sharing agreements with online platforms will provide valuable data for monitoring short-term rental activity and assessing the impact of the regulations.
Stakeholder Collaboration and Communication
Effective collaboration and communication between the province, municipalities, and stakeholders will be essential for successful implementation and enforcement..
Adaptability and Flexibility
The Short-Term Rental Accommodations Act and any related regulations may need to be adapted and adjusted over time to address emerging issues and challenges.
Addressing the Housing Crisis
The Act and its regulations are one piece of a larger puzzle in addressing the housing affordability crisis. The province and municipalities will need to continue to explore other strategies, such as increasing the supply of affordable housing and supporting long-term rental options.
Balancing Interests
The Act aims to balance the interests of homeowners, communities, and the tourism industry. Finding the right balance will be crucial for ensuring the long-term sustainability of the short-term rental sector in BC.
Meridian Law Group: Trusted Legal Guidance for Short-Term Rental Disputes and Real Estate Challenges in BC
Whether you’re a homeowner navigating BC’s new Short-Term Rental Accommodations Act or a buyer or seller facing complex real estate issues, experienced legal support is essential. Meridian Law Group assists clients with a wide range of residential and commercial real estate disputes, delivering practical strategies and personalized legal solutions. Our skilled litigation lawyers are committed to resolving matters efficiently, whether through negotiation, mediation, arbitration, or litigation, while always protecting your long-term interests. Let our experienced team help you move forward with clarity and confidence. Call us today at (604) 687-2277 or visit us online.
