Short-term rentals play a key role in Penticton’s economy and fill a much-needed gap in accommodations for tourists, says a report coming to the July 19 council meeting.

There will be no changes to the current policies and fees this year, but likely a license fee increase in 2023 to cover administration costs, says the staff report.

Penticton is facing a housing crisis and a rental vacancy rate of less than one per cent. Residents have long worried that short-term rentals take up much needed rental space for permanent residents of the city. But short-term rentals accommodate tourists who come to Peach City for the many events, races, festivals, conventions and concerts, said Blake Laven, city director of development services.

According to the report, there are currently 476 short-term rental units being advertised in Penticton. This represents a 68 per cent compliance rate to registering and licensing.

As predicted by the city, short-term rentals have more than doubled in Penticton since 2018 when 152 were licensed. In 2022, there were 322 licensed vacation rentals.

Services like Airbnb, VRBO and others have the short-term vacation rental industry booming in Penticton. (File photo)

Penticton has a long history of supporting vacation rentals dating back to the early 1980s.

Penticton residents would advertise renting their houses out to the vacationing public during Peachfest and Ironman. With the addition of VRBO (vacation rental by owner) and later Airbnb, the trend continued, particularly in the summer event seasons, seeing hundreds of listings across these platforms.

With festivals like Elvis Fest, Peach City Beach Cruise, Grandfondo, Fest of Ale, and the Dragon Boat Festival all added over the past 10 to 15 years, the city’s hotel and motel numbers are just not sufficient to house the growing number of visitors, according to the staff report.

Over the past seven years, the city has lost more than 100 motel units to land redevelopment, and the ones that remain are quickly ageing. The lack of accomodations was made particularly evident recently when the city supported a new hotel on city land (Four Points by Sheraton), which is set to add 105 new hotel rooms to Penticton. Short-term rentals are simply filling the gap, said Laven.

“We are in a situation where vacation rentals are integral to supporting the SOEC and Penticton Trade and Convention Centre (PTCC), two important city-owned facilities, which contribute greatly to the local economy,” he said.

There is a $200 yearly ‘tourism fee’ that licensed short-term rentals have to pay.

READ MORE: Penticton sees vacation rentals a booming industry

Summerland council recently adopted a set of five bylaws governing short-term rentals after receiving several complaints from neighbours.

The bylaws set out a regulatory framework as well as provisions for licensing and enforcement.

READ MORE: Summerland regulates vacation rentals

Since 2016, Penticton staff have opened 98 enforcement files to do with vacation rentals, three of which are active. The majority of those files involve the operation of vacation rentals without proper permitting.

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