Vacancy surge clears path for Kelowna's short-term rental exemption request

As expected, Kelowna City Council is preparing to apply for an exemption from the province’s short-term rental (STRs) rules.

In November, Kelowna council adopted a staff recommendation to develop a strategy for creating a STR subzone designation.

However, the city was still waiting for vacancy rate data before moving forward with a request to opt out of the province’s principal resident requirement, which limits STRs to the home the host lives for a majority of the year.

Municipalities with a vacancy rate of 3% or higher for two consecutive years can opt out of that rule.

In mid-December, the numbers were released and show that Kelowna had a vacancy rate of 6.9% in 2025. The previous year saw a rate of 3.8%.

On Monday, during the first council meeting of the year, city staff will be recommending that the city formally submit the exemption request.

The exemption would apply to buildings that operated (or permitted) STR’s prior to the provincial changes.

“Aligned with previous council direction; staff are not recommending widespread exemptions with the goal of also trying to maintain a healthy rental vacancy rate,” the staff report said.

Under the current guidelines, the exemption wouldn’t go into effect until Nov. 1.

However, the city will be advocating to the province to seek an earlier exemption, “ideally by spring 2026,” a staff report said.

This summer is going to be a very busy tourism season with the Memorial Cup, the two BC Lions games, Soccer Premier Spring Cup & Canada Day Cup and the BC Summer Games.

“Potential STR hosts will require time to apply for a business licence with the City and must register with the Province prior to listing on an STR platform,” the report said.

The City of Kelowna is not alone in its advocacy. Kelowna Mission MLA Gavin Dew has been pushing for an earlier exemption date as well.

In mid-December, Dew detailed three "incredibly simple" proposals he made to the government to advance the opt-out effective date to May 1, 2026. However, he claimed the BC NDP “wouldn’t lift a finger.”

“Kelowna has been a leader in delivering housing in accordance with Provincial mandates and has exceeded our Housing Supply Act targets,” the staff report said.

“Kelowna was the first municipality in BC to adopt bylaws implementing Bills 44, 46, and 47, and in encampment shelter solutions through the HEART & HEARTH program. Kelowna has proven itself to be a strong and reliable partner in housing delivery.”

Should council endorse the opt-out request, city staff say they are prepared to advance the necessary Official Community Plan and Zoning Bylaw updates on an “expedited basis.”

“This would provide a made-in-Kelowna approach to STRs that balances the need for long-term housing supply, while also supporting our growing, robust and dynamic tourism sector as a pillar of a thriving community,” the report concluded.