Kelowna realtor foresees legal action against Province over short-term rental regulations

British Columbia’s new short-term rental regulations will go into effect on May 1, 2024, but there may be some noise on the matter before then.

It’s no secret there has been plenty of vocal opposition to the Province’s strategy to create more rental housing, and a Kelowna realtor foresees the issue going to court at some point.

JP Letnick, a real estate agent with Sage Executive Group - Letnick Estates in Kelowna, says he’s heard there are people trying to get a group together to launch class-action lawsuits against the Province.

He expects to see that in the coming months unless there are large amendments made to the policy.

“Right now, what we’re seeing with the provincial government is that they are putting blanket policies that are going to be restricting property-use rights for owners that have followed through with the City of Kelowna zoning bylaws and legally-purchased properties that were intended to be for short-term rental,” he told KelownaNow.

He cites new Kelowna developments like Aqua, Caban and Brooklyn, where people have purchased units with the knowledge that they would be able to rent them out short term.

“A lot of those purchasers are not out-of-town buyers that have lots and lots of money in their pocket, and they’re just investing in second residences. These are families that have worked hard all their life,” Letnick explained.

“They’re buying a secondary property specifically so that they have the flexibility of being able to do short-term rental if they want to, or if they plan to move into that property in the future, but it gives them the options and now that’s taken away from them.”

He adds that being able to rent out a unit or property to someone over a platform like Airbnb gives opportunity to everyone and likened it to being a small business owner.

Unsurprisingly, hotels lobbied against these types of short-term rental platforms for years, which led to the implementation of taxes and fees for those who use Airbnb or Vrbo to rent out their units.

“We’ve had proper licensing with municipalities. We’ve had hotel taxes being implemented. People that are going onto Airbnb are paying their proper share of fees,” Letnick said.

Cities like Penticton and Vernon have publicly voiced their disapproval of BC’s new short-term rental regulations and Letnick says people in the Central Okanagan are hoping that someone will campaign for them.

“Otherwise they’re in deep trouble,” he explained. “They know their equity is going to go down.”

It’s not just property owners who are impacted, Letnick notes, as it will have a trickle-down effect on people like property managers and cleaners who make a living through short-term rentals.

Letnick was also quick to point out that he supports long-term rental development and inventory levels being increased, but his views fall more in line with adding more supply.

He says the federal government has brought in great programs to incentivize developers to build more rental-specific housing, such as removing GST obligations.

But he sees the decision of the provincial government to go after everybody, rather than just targeting those with improperly-licensed short-term rentals, as short-sighted.

The Province clearly does not share those views, and neither does the City, as council voted in favour of stricter short-term rental regulations in Kelowna last month.