The British Columbia Real Estate Association (BCREA) is calling for significant amendments to British Columbia’s short-term rental laws to mitigate the disruption they’ve caused for specific business and tourism sectors across the province, the association announced last week.

On May 1 this year, the B.C. Government enacted a widespread ban on short-term rentals, with the intent of returning homes to the long-term rental market.

British Columbians negatively affected by the ban

As part of a new housing policy resource hub launched leading up to the 2024 Provincial General Election, BCREA identified multiple groups of British Columbians negatively affected by the ban.

These groups include:

• medical employees transferred to remote areas
• those receiving multi-week medical care as well as caregivers in urban areas
• film sector workers in town for weeks at a time
• those attending or employed by short-term but large events for which hotel space is inadequate (such as a Taylor Swift concert or the FIFA World Cup 2026)
• those needing short-term housing due to delays in being able to take occupancy of homes or apartments

The BCREA proposed several exemptions from the ban across several categories, including these groups and high-tourism areas.

Additional considerations besides housing affordability, BCREA stresses

As part of the analysis, the BCREA stressed that provincial and regional economies need to be factored into policy decisions of this magnitude.

“While housing affordability is extremely important, there are additional considerations in communities across B.C. that have been paved over with the implementation of this policy,” explains Trevor Hargreaves, BCREA senior VP, policy and research. “There are numerous exemptions desperately needed to make this a workable and successful policy moving forward.”

Hargreaves adds, “There is no question that some of these short-term rental units should be functioning as long-term rentals, but there are some legitimate uses for short-term rentals that are no longer permitted under the legislation.”

With over 75 per cent of tenants worldwide reporting that rising rents have negatively impacted their quality of life, property managers have the opportunity to differentiate themselves by offering competitive rates and using technology to enhance tenant satisfaction and loyalty.

Capterra explored this through its global survey across 12 countries, with 4,800 tenants, including 400 respondents from Canada, to understand their experiences and perceptions. The results reveal a complex mix of factors influencing the short-term rental market, including rising rental costs, neighbourhood disturbances and tenant satisfaction issues. They also highlight the need for property managers to adopt new technologies and property management tools to improve the tenant experience, especially in the face of external factors driving rent increases.

Rising rents due to short-term rentals: A worry for over half of tenants

Globally, 51 per cent of tenants are concerned about rising rental prices due to short-term rentals, with the same sentiment reflected in Canada.

Among Canadian tenants familiar with the issue, 44 per cent believe short-term rentals have significantly driven up local rent prices.

High rent dissatisfaction in Canada

Globally, 34 per cent of tenants are challenged by high rental costs, while 36 per cent express dissatisfaction with their current rent — a number that’s even higher in Canada, with 39 per cent of tenants unhappy with how much they pay for rent.

Additionally, 76 per cent of tenants globally agree that rising rents have negatively impacted their standard of living. These numbers underscore the need for property managers to foster strong, long-term relationships with tenants through transparent communication and fair pricing strategies.

Impact of short-term rentals on neighbourhood dynamics

30 per cent of tenants globally report noise issues due to short-term rentals, while 29 per cent mention parking problems and 24 per cent express safety concerns. Furthermore, 23 per cent have observed changes in neighbourhood character.

The report suggests that property managers should adopt community engagement strategies to address these issues, helping to build a sense of community and improve tenant satisfaction.

Other key findings

The report also cites that 40 per cent of tenants worldwide support rent control, while 30 per cent favour discounts for timely payments to combat rent inflation. As well, 31 per cent of tenants are willing to pay higher rent for properties equipped with home security systems.

How property managers can strengthen neighbourhood communities

The report goes on to suggest six things property managers can do to strengthen their communities:

1. Enhance security. Install security systems, surveillance cameras and access controls to improve safety and foster a community watch culture.

2. Address congestion. Implement traffic calming measures and develop designated parking spots to reduce congestion.

3. Minimize noise disturbances. Enforce quiet hours and invest in soundproofing to address tenant concerns about noise.

4. Improve waste management. Ensure regular trash collection and provide recycling and waste disposal facilities.

5. Preserve neighbourhood character. Engage tenants in beautification projects and community events to foster neighbourhood pride.

6. Build community ties. Partner with local businesses, organize community service projects and promote diversity and inclusivity to create a welcoming environment.

Review the full report here.

Zoocasa looked at the question as the allure of short-term rentals through platforms like Airbnb loses its shine as cities across North America tighten regulations. The latest to join this trend is New York City, which recently enacted a law prohibiting rentals for fewer than 30 days, a move that echoes the efforts of several Canadian cities. 

These changes are largely driven by the need to address housing shortages, with policymakers hoping to return more properties to the traditional long-term rental market.

New regulations for short-term rentals

Short-term rental regulations are becoming increasingly commonplace, with many Canadian cities already implementing limitations. For instance, Zoocasa notes that as of Sept. 1, Halifax has restricted how units can be rented in residential zones and now mandates basement apartments or backyard suites to be rented for more than 28 days. Meanwhile, Toronto imposes a maximum limit of 180 days per calendar year for short-term rentals, and the British Columbia government is drafting its own set of laws governing short-term rentals.

Zoocasa’s analysis compared monthly rental prices with monthly mortgage payments for the average condo in each city. Additional costs, such as utilities and property taxes, were not factored into this analysis.

The cost of renting vs. owning

In August, Rentals.ca reported an annual increase of 8.9 per cent in rent prices, reaching a record-high average rent of $2,078 across Canada, while the average price of a condo in most cities did not experience a parallel surge.

Among the 12 cities where average condo mortgage payments were found to be lower than rent, Calgary stood out with the most substantial difference. With an average monthly rent of $1,920 and an average monthly mortgage payment for a condo at $1,355, investors could see a monthly surplus of $565.

Similarly, other Alberta cities like Edmonton and Lethbridge also presented mortgage payments lower than the average rent, while Grande Prairie bucked the trend with average monthly condo mortgage payments surpassing average rent by $619.

Beyond the Prairies, Quebec and the Maritimes also offer favourable conditions for investors. In Halifax, where the average rent is $2,061, the monthly mortgage payments for an average condo total $1,956. In Quebec City, monthly mortgage payments on a condo average $1,009 — less than $401 compared to the average rent in the city.

Source: Zoocasa

Ontario’s unique challenges

However, Zoocasa’s analysis indicates that Ontario presents a distinct challenge for condo investors. With the exception of Windsor and Ottawa, where monthly mortgage payments for the average condo are lower than rent, all other cities in Ontario analyzed in the study had monthly mortgage payments higher than rent.

Toronto, boasts the second-highest average monthly rent on the list, at $2,981, while the average monthly mortgage payment for a condo reaches $3,451 — a difference of $470. Other Ontario cities, including Guelph, Barrie, Hamilton, and St. Catharines, also recorded relatively higher mortgage payments when compared to rent costs.

Lauren Haw, Zoocasa’s broker of record and industry relations officer, emphasized the challenges that rising interest rates pose to condo investors. She noted, “Condo investors continue to have a hard time covering carrying costs, and they’re not making a profit, which is leading many to sell their investment properties.”

Investor interest persists

Despite these challenges, investor interest in real estate remains. The Bank of Canada reports that investors accounted for 30 per cent of home purchases in the first quarter of 2023, and the central bank’s recent decision to pause interest rate hikes and maintain the overnight lending rate at 5.0 per cent suggests that demand for investment properties may continue to grow.

Read Zoocasa’s full analysis here.