Short-Term Rental Bylaws — Committee of the Whole Report (Final) — full text

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S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 March 11, 2025 ADMINISTRATIVE REPORT TO THE COMMITTEE OF THE WHOLE ON ALIGNMENT OF MUNICIPAL BYLAWS WITH SHORT-TERM RENTAL ACCOMMODATION LEGISLATION PURPOSE The purpose of this report is to advise the Committee of the Whole of the impact of short-term rental accommodation legislation on the municipality and seek input on options to amend municipal bylaws to align with the legislation. COUNCIL STRATEGIC PLAN This report supports Council's strategic priorities and areas of focus regarding: - Safety and Security - Safety: We prioritize the safety of our community for residents, businesses, and visitors. - Housing: We proactively create opportunities to increase the inventory of diverse housing supply so that residents can access and move throughout the housing continuum. - Governance and Service Excellence - Fiscal Responsibility: We are accountable to Kamloops residents and businesses in providing effective management, best value, and responsible use of tax dollars. - Service Excellence: We promote the continuous development of staff and encourage innovation in process and service delivery. - Economic Health - Economic Strength: We build strategies to increase our competitive advantage, cultivate growth, and support our residents. - Growth Management: We are deliberate and purposeful in planning for the growth of our community. SUMMARY The provincial Short-Term Rental Accommodation Act is intended to help more people find a place to live, give local governments stronger tools to enforce short-term rental bylaws, and establish a new provincial role in regulating short-term rentals. The legislation aims to help balance the need to create more long-term homes for residents with the need to accommodate visitors. Short-term rentals are accommodations provided to members of the public in a host's property in exchange for money for a period of less than 90 consecutive days and are generally tourist accommodations. March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 2 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 In certain municipalities, including Kamloops, the legislation limits short-term rentals to: - the home where the host lives for a longer period of time in a year than any other place (their principal residence) - one secondary suite or accessory dwelling unit on the same property as the host's principal residence As of May 1, 2025, all short-term rental hosts and platforms operating in BC must be registered with the provincial short-term rental registry to ensure that all hosts and platforms follow the provincial rules. A new provincial enforcement unit will monitor compliance and administer compliance requests and penalties for violations. More information on short-term rental accommodation requirements can be found on the provincial website. Short-term rental hosts must display a valid business licence number on their listing in areas where the local government requires a business licence. If a listing does not comply with local government business licence requirements, the short-term rental platform must remove the listing at the local government's request. Local government bylaws may restrict short-term rentals more than provincial laws. In Kamloops, a business licence is currently required for a bed and breakfast, which Zoning Bylaw No. 55 defines as "a commercial establishment that provides temporary accommodation to the travelling public within a Single-Detached Dwelling." Bed and breakfast-type accommodations are permitted in the Zoning Bylaw in most residential zones under the "boarders and lodgers" use and must be in the same dwelling unit as the host. Currently, a business licence is not required in Kamloops for boarders and lodgers staying more than 30 days (e.g. when a host wishes to rent out a room to a student for a semester or to a pipeline worker). Renting residential suites does not require a business licence unless the registered owner does not occupy any units on the lot. Suites are considered dwelling units and must be rented monthly, not as nightly or weekly rentals. At this time, staff are seeking direction from the Committee of the Whole on how to best align the City's zoning and business licence bylaws with provincial short-term rental accommodation. Three options are proposed: Option 1: Short-Term Rentals within Principal Residence Continue to allow short-term rentals less than 30 days to a maximum of 2 persons within the principal residence of the owner. A host that provides short term-rental stays less than 30 days, or who lists a residential suite on a short-term rental platform from 30 to 90 days would require a short-term rental accommodation business licence. Option 1 Considerations - Supports the retention of residential units within the long-term rental housing market by prohibiting short-term rentals (less than 30 days) except where the owner lives in the unit (the owner does not need to live on site if the unit is rented for 30 days or more) - Supports the legalization of residential suites, since proof of a valid building permit would be a requirement of issuance of a business licence - legalization ensures that the suite complies with zoning, British Columbia Building Code, and all other safety requirements prior to occupancy March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 3 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 - Encourages accountability of short-term rental guests by requiring them to stay in the normal residence of the property owner - Allows a suite to be listed on a short-term rental platform for monthly rental or more with a valid business licence - Will not significantly increase the number of business licences required due to limited scope - The approach could be reviewed if Kamloops rental vacancy increases to 3% (currently, the rental vacancy rate in Kamloops is 1.4%) Option 2: Short-Term Rentals within Principal Residence or within Suite Allow short-term rental accommodation less than 30 days within the property owner's principal residence or within a residential suite on the same property as the owner's principal residence. A host that provides short term-rental accommodation, or who lists on a short-term rental platform less than 90 days would require a short-term rental accommodation business licence. Short-term rentals, including nightly rentals, would also be permitted in strata developments, subject to providing written consent from the strata. Option 2 Considerations - Will result in the removal of residential suites from the long-term rental housing market by allowing them to be converted to short-term rental accommodation, including nightly rentals. This may be a concern to Kamloops renters as the rental vacancy rate was most recently assessed at 1.4% whereas 3% is considered a healthy rental vacancy. This approach is contrary to Provincial initiatives aimed at increasing housing supply, including Kamloops Housing Target Order, and the update to the Official Community Plan currently underway to accommodate the 20-year housing needs - Supports the legalization of residential suites, since proof of a valid building permit would be a requirement of issuance of a business licence - as noted in Option 1, legalization ensures that the suite complies with zoning, British Columbia Building Code, and all other safety requirements prior to occupancy - Will result in more rentals being required to be licenced - Offers increased flexibility for homeowners in advertising and managing guests in their properties Option 3: All Short-Term Rentals and Long-Term Rental Suits to be Licenced Allow short-term rental accommodation less than 30 days within the property owner's principal residence or within a residential suite on the same property as the owner's principal residence. A host that provides short term-rental accommodation, or who lists on a short-term rental platform less than 90 days, or who rents a residential suite outside a short-term rental platform would require a business licence. Short-term rentals, including nightly rentals, would also be permitted in strata developments. Option 3 Considerations - Similar impact on the rental market as Option 2 - Supports the legalization of residential suites, since a business licence would be required for all suites and proof of a valid building permit would be a requirement of issuance of a business licence - as with Option 1 and 2, legalization ensures that the March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 4 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 suite complies with zoning, British Columbia Building Code, and all other safety requirements prior to occupancy - Will result in a greater number of rentals being required to be licenced than Option 2 - Offers increased flexibility for homeowners in advertising and managing guests in their properties - Provides a consistent approach to licencing rental units regardless of length of stay - Provides an additional enforcement tool for residential suites, however enforcement would continue to be on a complaint-basis The approaches discussed above each have unique implications for the community. The options clarify how Kamloops bylaws interface with Provincial short-term rental legislation. Once the Committee of the Whole has provided direction on the proposed approach, staff will bring back to Council a bylaw to give first reading and authorize a public hearing. The public hearing for the zoning amendments will allow the public to express their views on the application. RECOMMENDATION: That the Committee of the Whole recommend that Council authorize staff to: a) Option 1 draft for Council's consideration bylaws to amend Zoning Bylaw No. 55 and Business Licence and Regulation Bylaw No. 9-60 to clarify definitions and regulations, to permit short-term rentals less than 30 days only as shared accommodation within the principal dwelling of the property owner, and to require a business licence for all short-term rentals, and for listing units on a short-term rental platform from 30 to 90 days, as discussed in the report. b) Option 2 draft for Council's consideration bylaws to amend Zoning Bylaw No. 55 and Business Licence and Regulation Bylaw No. 9-60 to update definitions and regulations to permit short-term rentals less than 30 days within the principal dwelling of the property owner, or in a residential suite on the same property as the owner's principal residence, and to require a business licence for all short-term rentals listed on a short-term rental platform for less than 90 days, as discussed in this report. c) Option 3 draft for Council's consideration bylaws to amend Zoning Bylaw No. 55 and Business Licence and Regulation Bylaw No. 9-60 to update definitions and regulations to permit short-term rentals less than 30 days within the principal dwelling of the property owner, or in a residential suite on the same property as the owner's principal residence, and to require a business licence for all short-term rentals, for all short-term rentals listed on a short-term rental platform for less than 90 days, or for any residential suites, as discussed in this report. SUPPORTING COUNCIL AND CORPORATE DIRECTION Council No. EDS-17 - Residential Suite Compliance March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 5 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 DISCUSSION Business Licence and Short-Term Rentals Listing Data Municipal records currently show business licences for the following: - 11 bed and breakfast establishments - 12 boarders and lodgers establishments (the length of stay of stay for these establishments is not clear) - 6 houses with residential suites where the property owner does not live on site A recent review of current listings that could be classified as short-term rentals on airbnb.ca produced approximately 300 listings. Of these listings: - 30 (10%) listings have business licences with the City - Approximately 30 listings (10%) are permitted under municipal regulations but are not currently licensed - Approximately 240 listings (80%) are not permitted under municipal regulations, meaning they are either located within a suite or living space with its own kitchen Options As noted in the Summary, three options are considered to align municipal bylaws with the Short-Term Rental Accommodation Act: Option 1: Short-Term Rentals Within Principal Residence Option 1 is to only permit short-term rental accommodations (less than 30 days) within a unit that is the registered owner's normal place of residence, not in a residential suite. Business licences would only be required where the rental is for 30 days or less, or where a suite or other residential unit is listed for 30 to 90 days using on a short-term rental platform. The following bylaw amendments are proposed: Zoning Bylaw No. 55 - Add a definition for "short-term rental accommodation" as the rental of a room or rooms to the public in a dwelling unit that is the owner's principal residence for a period of less than 30 days - Add "short-term rental accommodation" as a permitted use within a single-detached or duplex dwelling in all residential zones - Rescind the "bed and breakfast" definition and replace all references to "bed and breakfast" in the bylaw with "short-term rental accommodation" - Amend the "boarders and lodgers" definition to clarify the length of stay as being 30 days or greater Business Licence and Regulation Bylaw No. 9-60 - Add a definition for "short-term rental accommodation" to match the proposed Zoning Bylaw No. 55 definition March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 6 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 - Update the definition of "commercial landlord" to include rental of three or more residential properties - Update Schedule "A", Business Licence Fees and Business Categories, by: - replacing the reference to "bed and breakfast house" with "short-term rental accommodation" in order to require a business licence for short-term rentals that are shared accommodation - adding a business licence requirement for the owner of any property with two or more suites or a total of three or more dwelling units, or for listing a suite or other residential unit from 30 to 90 days on a short-term rental platform Option 1 Considerations - With this approach, those short-term rental units (less than 30 days) currently listed online (240 or 80% of airbnb.ca listings) that are in suites or functioning like suites with second kitchens will continue to be prohibited. Through coordination with the Province's short-term rental registry system, these listings will be removed through enforcement, allowing these units to be brought into the long-term rental market to meet the needs of Kamloops residents - This approach supports the retention of residential suites within the long-term rental housing market by continuing to not permit short-term rentals (less than 30 days) within them. Retaining suites is important where rental vacancies are low. Typically, a healthy rental market vacancy rate is considered to be 3%. According to the Canada Housing and Mortgage Corporation, the rental vacancy rate in October 2024 was 1.4%, broken down by unit type as follows: o 1.3% for bachelor units o 1.4% for one-bedroom units o 1.7% for two-bedroom units Since CMHC vacancy rates are calculated for purpose-built rental housing, increased availability of long-term rental units in the secondary market such as secondary suites will not directly impact vacancy data. However, adding units in the secondary market will absorb some of the demand in the overall rental market, which should indirectly increase vacancy in the purpose-built market - Suites listed from 30 to 60 days on a short-term rental platform would be permitted but would need to be legalized and require a business licence - This approach encourages accountability of short-term rental guests by requiring them to stay in the normal residence of the property owner - This approach allows short-term rental platforms to be used to advertise short-term rentals in suites for 30 days or more. Option 2: Short-Term Rentals within Principal Residence or within Suite Under Option 2, short-term rentals less than 30 days would be permitted--and licensed--in either the principal dwelling or a residential suite if the owner lives on the same property. Business licences would be required where a host provides short term-rental stays less than 30 days or lists a residential suite on a short-term rental platform from 30 to 90 days. The following amendments are proposed: March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 7 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 Zoning Bylaw No. 55 - Add a definition for "short-term rental accommodation" as the rental of a room, rooms, or a residential suite to the public on a property which is the location of the owner's principal residence for less than 30 days - Update bylaw to clarify where short-term rentals are permitted and any applicable regulations, and review existing definitions and regulations for "boarders and lodgers" and "bed and breakfasts" Business Licence and Regulation Bylaw No. 9-60 - Add a definition for "short-term rental accommodation" to match the new Zoning Bylaw No. 55 definition - Update the definition of "commercial landlord" to include rental of three or more residential properties - Require strata consent for short-term rentals in a strata - Update Schedule "A", Business Licence Fees and Business Categories, by: - replacing the reference to "bed and breakfast house" with "short-term rental accommodation" in order to require a business licence for short-term rentals - adding a business licence requirement for the owner of any property with two or more suites or a total of three or more dwelling units, or for rental of a unit on a short-term rental platform for less than 90 days Option 2 Considerations - A benefit of this approach is that the suite must be legalized to be licensed. The applicant would be required to obtain a building permit, which would ensure compliance with the BC Building Code. In this case, the 240 (80%) of illegal airbnb.ca listings may be permitted to resume providing short-term rental accommodation services if the owners legalize the suite and obtain a business licence. Allowing short-term rentals to be permitted in suites would remove these dwelling units from the long-term housing market - Ensuring the host lives on site may be challenging over the long run if future provincial governments discontinue the suite registry process - This approach will increase the number of rental accommodations requiring a business licence. Adding licence requirements for rentals that do not currently require licences increases opportunities for oversight by the City and the Province - While the approach will impose licence fees on hosts renting rooms or suites on a month-to-month basis, it allows hosts to use the provincial registry system and use short term rental platforms to advertise their accommodations Option 3: All Short-Term Rentals and Long-Term Rental Suits to be Licenced Option 3 is the same as Option 2 in allowing short-term rental accommodation within the property owner's principal residence or within a residential suite on the same property as the owner's principal residence. However, in addition to requiring a business licence for short term- rental accommodations less than 90 days, Option 3 requires a business licence for any person who rents out a residential suite. Currently a business licence is only required for a suite in a house where the owner does not live on site. The following amendments are proposed: March 11, 2025 SHORT TERM RENTAL ACCOMMODATION Page 8 S:\LGS\Council ARM Regular (c7)\2025\2025-03-11 COTW\Short-Term Rental Bylaws COTW Report_ Final.docx February 20, 2025 Zoning Bylaw No. 55 - Same as Option 2 Business Licence and Regulation Bylaw No. 9-60 - Same as Option 2 but requires a business licence for all residential suites. Option 3 Considerations - This approach will have a similar impact on the rental market as Option 2 - This approach supports the legalization of residential suites, since a business licence would be required for all suites and proof of a valid building permit would be a requirement of issuance of a business licence - Will result in a greater number of rentals being required to be licenced than Option 2, however enforcement will continue to be on a complaint-basis. Adding licence requirements for rentals that do not currently require licences increases opportunities for oversight by the City and the Province - As with Option 2, this approach will impose licence fees on hosts renting rooms or suites on a month-to-month basis, but allows hosts to use the provincial registry system and use short term rental platforms to advertise their accommodations - Provides an additional enforcement tool for residential suites, however enforcement would continue to be on a complaint-basis Concurrence: K. Uzeloc, Protective Services Director/Fire Chief Author: S. Bentley, RPP, MCIP, Community Planning Manager Reviewed by: R. J. Martin, RPP, MCIP, Planning and Development Manager/Approving Officer E. Beach, RPP, MCIP, Current Planning Manager W. Beatty, Community Services Manager M. Kwiatkowski, P.Eng. Development, Engineering, and Sustainability Director Approved for Council SB/kjm