Removal Of Rental Restrictions IN BC Strata Condos

WHY DAVID EBY ENACTED THE REMOVAL OF RENTAL RESTRICTIONS IN BC STRATA CONDO BYLAWS

On November 18, 2022, British Columbians swore in a new premier shortly after John Horgan retired his position.  There has been a change of premier position, quickly sparking a change in strata bylaws. There has been a removal of rental restrictions in BC strata condos. David Eby now represents the provincial NDP party and as he prepared to enter office, he laid out his plans for his first 100 days in office. Eby’s plan included a commitment to addressing the province’s housing crisis. 

Of particular importance for the Greater Vancouver real estate market is his plan to remove long-term rental restrictions in strata bylaws.  As top Vancouver realtors, we know these changes will have a significant impact on the availability of rental condos which also is likely to impact real estate investment in British Columbia.  Let’s have a closer look.

Throughout British Columbia but especially in Vancouver, there is a shortage of rental stock which ultimately drives up rental prices.  David Eby and his NDP Government are acutely aware of the impact that unaffordable housing has not only on the residents of the province but on the economy as a whole. 

With amendments to the Strata Property Act and removal of rental restrictions, the Government hopes to quickly increase housing supply. The increase in rental stock will be achieved part by making it possible for many uninhabited condos throughout the province to be made long-term rentals.  That means many condos in Vancouver that have strata restrictions for long-term rentals may soon be available to renters.

With respect to changes in legislation affecting strata bylaws, there is no change to strata corporations enforcing restrictions on short-term rentals such as Airbnb.  However, when the Government introduced amendments to the Strata Property Act in late November 2022, it announced its intention to end all strata rental-restriction bylaws on long-term rentals.  By removing these restrictions, the BC NDP appears motivated to increase rental stock and potentially shift rental rates such that the market sees more affordability.

NO RENTAL RESTRICTIONS IS GOOD NEWS FOR SOME VANCOUVER CONDO OWNERS

In addition to the potential increase in rentals in the Greater Vancouver real estate market, this also appears to be good news for owners who want an income generating investment.  As real estate agents we have seen a lot of condo owners forced to sell because of strata rental restrictions.  With new legislation eliminating restrictions on long-term rentals, owners of condos in Greater Vancouver will have greater flexibility for converting a property into an investment that generates regular income. 

Another benefit of this legislation for the housing market is added value for condos.  Condos with no rental restrictions tend to be more desirable and hold higher value.  Why?  There are several reasons but primarily, these condos access a larger market that includes owner occupiers and real estate investors. 

Therefore, we would expect to see condos in Vancouver with no rental restrictions, appreciate in value rather quickly once these restrictions are lifted.  Subsequently, since owners who previously could not rent their condos are likely going to be motivated to rent rather than sell, there may be an impact on homes for sale in Greater Vancouver neighbourhoods – fewer condos for sale will have a positive impact on average prices on real estate.

VANCOUVER RENTERS HAVE MORE OPTIONS AS OF 2023

Changes to strata legislation came into effect on November 24, 2022 and as such the impact on the rental market and condo supply is expected to be felt in the early part of 2023.  Rent has been on a steady increase for many years, besides a short-lived stint during Covid.

With the removal of rental restrictions, there should be some relief for renters in BC. It’s simply a matter of supply and demand. By allowing owners to rent their suites, people in search will have more options. In theory, with the increased options, renters should experience an easing of rental prices.

If there are lower rental prices, condo prices in turn will no longer increase in price on the resale market. The removal of rental restrictions should have an easing effect on both condo renters and homebuyers alike.

If you want to learn more about how the changing legislation affects you or the market for condos in Greater Vancouver, contact Jacob with Oakwyn Realty.  He has 2 decades of experience in buying and selling condos in Vancouver and can help with all your real estate needs.