Kelowna, B.C., allowed to opt out of short-term rental rules this summer

The business community is applauding British Columbia’s decision to allow the Okanagan city of Kelowna to opt out of rules limiting short-term rentals in time for this summer’s tourism season, though some say the move is overdue.

The B.C. government announced Friday it was making a one-time allowance for Kelowna, with a statement from the Housing Ministry saying the exception recognizes major events planned for the community this summer.

The province is also speeding up the opt-out process for other municipalities with rental vacancy rates of at least 3 per cent for two consecutive years.

Those changes take effect in 2027, with eligible communities required to submit opt-out requests by Feb. 28 for a June 1 start date.

Currently, the province considers opt-out requests submitted by March 31 with an effective date of Nov. 1, well after the busy summer season is over.

The rules introduced in 2023 limit short-term rentals to principal residences plus one secondary suite on the same property. They’re designed to increase housing supply, but have faced opposition from some communities reliant on tourism.

Housing Minister Christine Boyle said accelerating the timeline for communities to opt out of the requirement would help communities such as Kelowna that have “brought vacancy rates to healthy levels” make the most of the summer season.

“We welcome the considerate approach Kelowna is taking to remove the principal residence requirement from some buildings in the downtown core, while maintaining the requirement in most residential areas, ensuring sufficient homes are available for local residents,” Boyle said in a statement.

The chief executive of the Kelowna Chamber of Commerce, George Greenwood, said the business community is “elated,” even if some would have preferred to see the changes take effect earlier.

“Unfortunately, it won’t be in time for the Memorial Cup (in May),” he said.

“But we do have two football games that the (B.C.) Lions are playing, and we also have the BC Summer Games, so lots of stuff happening — and then (there’s) also just the regular tourism volumes that we see.

“I think there’s probably a cheer in the background, outside in the city here, going up today for people now anticipating this increase.”

Kelowna-Mission MLA and Opposition economic development critic Gavin Dew, too, said he welcomed the changes announced Friday, but the move was “overdue.”

Boyle said the province’s restrictions are aimed at ensuring homes are returned to the long-term market, while providing communities with “healthy” rental markets flexibility to provide more accommodation options for tourists.

Greenwood said Kelowna has seen an increase in purpose-built rental housing coming online in recent years, so the lack of units isn’t a concern.

“We have hundreds of units sitting empty right now,” he said.

Opening those homes to both the short- and long-term rental markets satisfies multiple needs, Greenwood said.

“We’re helping the locals who live here and have to rent and find accommodation … But it’s also helping the visitors who are ultimately going to drive our economy.”

The lack of accommodation choices for visitors to Kelowna in recent years has led to higher costs for hotel rooms, leading to a knock-on effect on tourist spending at local businesses, Greenwood added.

Alex Howell, policy lead for Airbnb Canada, said the City of Kelowna submitted its opt-out request four months ago, and it was frustrating the province took until mid-April to issue its approval.

“Hosts do need to get a local city license,” Howell said. “They need to be approved to get a provincial registration as well to be a short-term host. Those things take time. 

“People are making decisions now about where they’re going to travel to in the summer. They’re looking for accommodation, and right now for a lot of people, they may be looking and not finding what they need in places like Kelowna.”

Howell said Airbnb has tried to push the province to loosen its short-term rental rules in time for the upcoming FIFA World Cup in Vancouver, but the government has not indicated any movement on that front.

“We all remember stories of Taylor Swift being in town and hotels being $2,000 a night,” she said. “We obviously don’t want to see that for FIFA.”

Greenwood said he anticipates a “mad rush” of people looking to get their properties listed, but urged them to get the proper certifications.

“We know they’re going to be anxious to get it done quickly, but follow the rules,” he said. “There’s people there to help you, and let’s all work together to make this a really amazing tourism season for 2026.”

This report by The Canadian Press was first published April 17, 2026.

Note to readers:This is a corrected story. A previous version cited incorrect information from the source saying rules restrict the short-term rental of principal residences. In fact, the rules restrict short-term rental to principal residences.