Parksville, B.C., residents worry over short-term rental exemptions

Residents and property operators on Vancouver Island are expressing concerns over rules around short-term rentals and whether they might receive exemptions for properties on Resort Drive, a tourist-zoned area in Parksville, B.C.

The Short-Term Rental Accommodations Act aims to address B.C.'s long-term housing shortage by limiting short-term rentals to a homeowner's principal residence plus one secondary suite or accessory dwelling.

Last week, the Ministry of Housing said in a news release that strata hotels and motels "are expected" to be exempt in upcoming regulations, as long as the accommodation was used as a hotel or motel prior to Dec. 8, 2023 and either had necessary staff on site or had more than one strata lot that couldn't be used as residential housing due to certain restrictions. 

The province says strata hotels and motels are facilities that consist of individually-owned strata lots that provide accommodation in a manner similar to a hotel or motel.

But Parksville-Qualicum MLA Adam Walker and some residents say the release doesn't go far enough to promise exemptions will be in place for May 1. 

"We have almost 300 individual property owners that have short-term rentals on Resort Drive that still don't have the certainty they need to go into the summer knowing they're following the rules," said Walker, adding the ministry hasn't clarified which properties fall under the province's definition of a strata hotel or motel. 

He hopes the province will consider Parksville city council's application for a geographic exemption on Resort Drive – a 1.3-kilometre road with waterfront views, resort condominiums, and strata hotels and motels – which he says was designated as a tourist zone decades ago. 

"It is not set up for people to live. It's set up for tourists to come and enjoy our community," he said.

"If we don't have the flexibility to adapt in the future, there's a good chance that won't grow and that will have a big impact on the future of the whole region."

'Want to walk away'

William Christensen, owner of Beach Acres Resort, says roughly 44 per cent of the city's tourist revenue comes from Resort Drive, which brought in $304 million in 2022. 

He fears that without an exemption, the legislation will be a fatal blow to his business. 

"It would cause me to close my doors, to let go of all of my staff and this would essentially lead to my bankruptcy," he said, adding the property isn't set up for long-term housing and doesn't have essential amenities like mailboxes, adequate parking, or nearby schools. 

"Beach Acres resorts, since its inception in 1987, was purpose-built to provide short-term accommodation."

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The province has just announced it expects to create exemptions in time for its new short-term rental accommodation rules to be implemented, which will exempt some types of strata hotels. 

Judy Thomas with the Resort Drive Advocacy Group says they're confident management companies on properties will receive exemptions, but worries individually-managed properties may lose their right to self-manage. 

"We've been advocating for them to have the same right to continue managing their property without having to go through the on-site management company and that's still not clear in these proposed regulations," she said, adding booking guests has been difficult due to uncertainty from the legislation. 

"The average person doesn't understand all of the nuances … about how the registry will work and how the enforcement will work, so they just want to walk away. They're just not comfortable."

'Blazing a path' with regulations

Housing Minister Ravi Kahlon told CBC's All Points West the intention from the start was to find a balance between supporting residential housing and tourism, and never to "capture strata hotels."

He says each strata hotel runs differently from another and it took time for the ministry to understand and engage with property operators. 

"If there was an example from another jurisdiction that we could mimic that would be great, but we're blazing a path that no one has actually gone down," he said. 

While he did not confirm if all resort properties on Resort Drive would be exempt from the legislation, he said "all the communities that are strata hotels will be exempt."

"Parksville has a vacancy rate close to one per cent. They can't attract health-care workers. They can't attract people to work in their schools and there's a real need in that community."

The principal residence requirement comes into effect on May 1 and applies to all municipalities with a population of 10,000 people or more.

Kahlon said despite an exemption for communities with populations below 10,000 people, many are choosing to opt in, even if they depend on tourism.