TIABC Voice of Tourism Newsletter – January 10, 2025

One of my favourite pastimes is to peruse realtor.ca to check out properties for sale in communities around the province. While a move to another home isn’t imminent, it’s helpful to be somewhat familiar with real estate prices in the event we decide to pull up stakes and settle elsewhere.

I am both fortunate and grateful to own my current residence so if my wife and I decided to sell for whatever reason, we have the option to use the proceeds to purchase another home. Conversely, if we stay put for the foreseeable future, we could leverage against the market value of our house to buy another property as an investment.

Over the holidays I spent many hours looking at listings and was astounded to learn how in most cases the numbers simply don’t make sense to purchase a condominium now and rent it out to a long-term tenant.

Notwithstanding the staggering price of a standard condo in many BC communities, with interest rates as they are, plus maintenance fees, insurance, property taxes, utilities, repairs and other costs, I would need to charge an exorbitant amount and still supplement any rental income with money out of my own pocket to pay the mortgage.

Suffice it to say, I not only feel for those trying to get into the market, but I also understand the plight of average folks who invested in real estate for the long-term with the intent of generating sufficient revenue to cover expenses through vehicles such as short-term rentals (STR), which often produce higher monthly income than rent. Because the new provincial rules introduced last May limit what can be used as a STR and where, some investors can’t afford to keep their units any longer.

There are those that have no sympathy for owners who assumed the risk in a largely unregulated environment, while others maintain that there has to be a palatable solution for all parties (e.g. owners, visitors, communities, platforms, government) that can be implemented in short order. Regardless, the unintended consequences of the regs deserve to be acknowledged.

As a reminder, one of TIABC’s primary goals was to see the new provincial STR regulations put a stop to multi-unit developments built to house permanent residents that were instead being operated as ‘ghost’ hotels. Along with attaining more homes for long-term tenants, including tourism workers, we also wanted to ensure the regs allowed for a healthy balance between much-needed permanent housing and short-term rentals, especially in communities under-serviced by traditional accommodation. We happen to believe that so far the legislation has accomplished these objectives.

However, because the data are not yet available, it’s too soon to measure the efficacy of the regs. Housing Minister Ravi Kahlon insists the new STR rules are working with more housing available for those who need it. That said, I’ve heard from tourism operators and communities who say the regulations have impacted visitation and hurt business. In fact, the BC Conservative critic for Jobs, Economic Development & Innovation, Gavin Dew, told the Vancouver Sun last week that the so-called STR ‘ban’ has cratered tourism in places like Kelowna where he cited the lack of hotel rooms compounded the issue…which by the way was not the case.

I asked a number of my colleagues, including Tourism Kelowna, for their assessment and they noted that while many operators indicated 2024 was a strong year, others implied that activity levels did not meet expectations, particularly in the peak summer months.

In my view it’s premature to conclude that any decline in business in places like the Okanagan can be blamed solely on the notion of fewer STRs. As I’ve learned, it’s more likely a combination of factors including rising costs for goods and services leading to decreased spending on travel or activities; fears about weather or potential crises (e.g. wildfires); concerns over crop loss (grapes, tree fruits) due to the extreme frost events of a year ago; and perhaps the perception and not necessarily the reality of far fewer STRs.

As TIABC has promised from the start…if restrictions on STRs prove to be a primary factor in declining visitation and impacts on business, we’ll convene with government to see if or what changes might be necessary to ensure the tourism industry remains buoyant. In the meantime, the next component of the legislation (that we also advocated for) is poised to take effect which amounts to a provincial registry of all STRs and the removal of any listings where the operator is non-compliant.

As I’ve reminded many industry colleagues and media time and again since the rules were introduced last May, there is no provincial ban on short-term rentals (although in some communities, local bylaws may be more stringent than the province’s) and thousands are still operating legally today.

If anything, governments at the provincial and civic levels, as well as short-term rental platforms and the tourism industry need to do a better job of communicating to visitors (and locals) that STRs are available as an accommodation option (to complement hotels, motels, resorts, B&Bs, campgrounds) for those travelling to and within BC. Notwithstanding local bylaws, it’s also imperative to remind various stakeholders to become intimately familiar with what provincial regulations do or don’t permit so that accurate information on STRs is dispensed to various constituents.

I plan to continue my practice of exploring realtor.ca for now although I’m tempted to also peruse STR platforms to find out what I could rent my house out for if I decided to take an extended vacation. According to the rules, I could offer my entire home as a short-term rental for up to 90 consecutive days which, for the record, I’m not going to do but the revenue would certainly help pay my soaring property taxes.

Walt Judas
CEO, TIABC