BC alters short-term rental limitations for municipalities with sustained vacancy rates

Beginning next year, the BC government will allow municipalities to opt out of limitations that have been put in place for short-term rentals (STRs) if they can show a sustained increase in vacancy rates. 

The Short-Term Rental Accommodation Act came into effect on May 1st, 2024, which limited STRs ability to operate in order to get the rentals back into municipalities’ long-term rental pool. 

Any BC community with a population of over 10,000 was subject to this legislation that disallowed the operation of STRs such as Airbnb or Vrbo, unless the property was also the owner’s principal residence. 

Now, two years after this came into effect, the Province is allowing municipalities to go back to how things were before the STR act was passed. 

Eligible municipalities with sustained rental vacancy levels above 3% will have an earlier opportunity to opt out of the provincial rules that restrict STRs to principal residences. This is being done to help to meet summer tourism demands, so long as it will have little effect on the residents of the community. 

One example of this is Kelowna, who have gotten their vacancy numbers up and have already requested an opt out from the Province. 

“Our short-term rental rules are focused on returning homes to the long-term market for people and giving communities with healthy rental markets the flexibility to provide additional tourist accommodation,” said Christine Boyle, Minister of Housing and Municipal Affairs. 

“Accelerating these timelines will assist communities like Kelowna that have brought vacancy rates to healthy levels through their hard work on housing to make the most of the summer tourism season.”

According to the Province, Kelowna has removed the principal residence requirement from some buildings in the downtown core, but maintained the requirement in most residential areas. 

Kelowna was an exception to the provincial rules surrounding STR limitations, and other municipalities will have the opportunity to follow in their footsteps beginning in 2027. 

To qualify, municipalities must maintain a vacancy rate of at least 3% for two consecutive years to request an opt out of the principal residence requirement. 

Because the Canada Mortgage and Housing Corporation (CMHC) releases their vacancy rate report in December, municipalities can now request the opt out beginning February 28th, 2027, in order to have an effective date of June 1st, 2027. 

This will allow for more STRs to hit the market, just in time for next summer’s tourism boom. 

“Short-term rentals are an important part of the tourism sector in many parts of BC,” said Anne Kang, Minister of Tourism, Arts, Culture and Sport. 

“These changes support communities to make decisions that best meet their housing needs for residents, including those who work in the tourism sector, while also supporting the visitor economy.”

According to the CMHC’s 2025 vacancy report, Victoria has reached its highest vacancy rate since 1999, at 3.3%.

In 2024, Victoria’s vacancy rate was only 2.4%. This means that unless the city sees another year of vacancy rates sustained above 3% in 2026, Victoria will be ineligible to apply for the opt out. 

However, if Victoria does qualify, it will be up to city council to apply to the Province for the opt out.