What Just Happened: Kelowna Council Shuts the Door on a Short-Term Rental
On May 26, 2026, Kelowna city council voted unanimously to uphold a staff decision denying a short-term rental business licence for a seven-unit property on Bernard Avenue. The decision sent a clear message: the City of Kelowna is serious about enforcing its short-term rental rules.
If you own property in Kelowna — or you're thinking about buying here — this decision matters. And if you've been considering an Airbnb-style investment while living in Kelowna, this is exactly the kind of local intel you need before you buy.
👉 See the latest Kelowna homes for sale here
Understanding Kelowna's Short-Term Rental Rules
Kelowna's short-term rental (STR) regulations require that any property used for short-term rentals must be the owner's principal residence. That means you can rent out a suite or room in the home you actually live in — but you can't buy a separate investment property and list it on Airbnb or VRBO without jumping through significant regulatory hoops.
Why This Rule Exists
The province of BC introduced short-term rental restrictions to help address the housing crisis across communities including Kelowna real estate markets. When entire homes get converted to tourist rentals, long-term rental supply shrinks — driving up rents and making it harder for locals to find housing while living in Kelowna.
The Principal Residence Requirement — In Plain English
To get a short-term rental licence in Kelowna, you need to prove:
- The property is your primary home — where you live, sleep, and receive mail
- You can provide supporting documentation (driver's licence, property insurance, homeowner grant)
- The property is zoned appropriately for short-term rental use
- Any renovations or modifications meet current building permit requirements
The Bernard Avenue case failed on multiple counts — the property had been divided into seven separate units, had no building permit records on file, and the owners couldn't satisfy staff's documentation requirements.
What This Means If You're Investing in Kelowna Real Estate
Let me be direct with you. If your plan is to buy a Kelowna home for sale and run it as a full-time short-term rental, the regulatory environment has tightened considerably. That doesn't mean STR investment is impossible — but it does mean you need to go in with eyes open.
What You CAN Still Do
- Suite rentals: If you buy a home with a legal secondary suite, you can live in the primary unit and rent the suite short-term under the principal residence rules
- Long-term rentals: Properties that don't qualify for STR licences can often still be licensed for long-term rentals — a stable income stream with far less regulatory risk
- Compliant STR zones: Some areas and strata buildings in Kelowna still permit short-term rentals — knowing which ones requires working with a local expert
What You Should Avoid
- Buying a property specifically as a non-principal-residence Airbnb play without legal advice
- Assuming provincial enforcement won't apply to your property
- Purchasing a multi-unit property and assuming all units qualify for STR
The Bigger Picture: BC's Housing Policy Is Reshaping the Okanagan
The Bernard Avenue decision doesn't exist in isolation. BC's short-term rental legislation is part of a broader wave of housing policy that's actively changing what you can and can't do with Kelowna real estate.
Bill 44: More Density in Residential Neighbourhoods
Bill 44 now allows small-scale multi-unit housing (up to 4 units) on single-family lots in most residential areas of Kelowna. This opens up new development and investment opportunities — but also changes the character of established neighbourhoods that people are moving to Kelowna to enjoy.
Bill 47: Density Around Transit Corridors
Bill 47 promotes higher-density development near transit routes. Areas near Kelowna's main corridors are seeing rezoning pressure that could affect property values, neighbourhood aesthetics, and long-term investment strategy in West Kelowna, Lake Country, and the city core.
What Smart Buyers Are Asking Right Now
Before purchasing any Kelowna home for sale, smart buyers are asking:
- Is this property in a short-term rental permitted zone?
- What are the current and proposed zoning rules for this lot?
- Does the strata (if applicable) permit short-term rentals?
- What's the long-term rental demand in this area?
These are exactly the questions I help my clients answer before they make an offer.
📥 Download our free Kelowna Home Buyer's Guide — includes a section on investment property considerations and what to ask before you buy.
Is Kelowna Real Estate Still a Good Investment Despite the Restrictions?
Absolutely — but the strategy matters more than ever. Here's how I'm thinking about it:
Long-Term Rentals Remain Strong
The demand for long-term rentals in Kelowna is very healthy. Students at UBCO, healthcare workers at Kelowna General, professionals relocating to the Okanagan — they all need places to live. A well-located Kelowna home for sale with a legal suite can generate reliable rental income without the STR headaches.
The Okanagan Lifestyle Still Drives Demand
People aren't stopping their dreams of living in Kelowna just because the regulatory environment is evolving. The wine country, the lake, the four seasons of outdoor recreation — that pull is permanent. Demand for Kelowna real estate from buyers in Vancouver, Calgary, and Toronto remains consistent.
The Right Property in the Right Location Still Wins
Whether it's a single-family home in a quiet neighbourhood, a condo near the waterfront, or a townhome in West Kelowna or Lake Country — the fundamentals of good real estate still apply. Location, condition, price, and purpose. Get those right and you'll be well-positioned regardless of regulatory shifts.
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My Advice to Buyers and Investors Right Now
Here's what I tell every client who asks me about the STR landscape in Kelowna real estate:
- Do your homework before you buy. Zoning, strata rules, and licence requirements need to be verified — not assumed.
- Don't over-index on STR income. Build your investment case around long-term fundamentals, not Airbnb projections that can change with a council vote.
- Work with a local expert. The difference between a compliant STR opportunity and a regulatory nightmare is often just knowing which questions to ask — and which streets to buy on.
Ready to Navigate Kelowna's Real Estate Market with Confidence?
Whether you're buying a family home, a revenue property, or exploring investment options in West Kelowna or Lake Country — I'm here to help you make the right move.
👉 See the latest Kelowna homes for sale here
Talk to Mark Coons — Your Kelowna Real Estate Expert
I'm Mark Coons with the Selling Okanagan Group. I've been helping buyers and investors navigate living in Kelowna and the Okanagan real estate market through every kind of market condition. Let's talk about your goals.
- 📞 Phone: 778-946-6454
- 📧 Email: [email protected]
- 🌐 Website: sellingokanagangroup.com
Mark Coons Personal Real Estate Corporation | Selling Okanagan Group | eXp Realty
