I’ve spent the last week talking with homeowners across British Columbia’s vacation hotspots, where a perfect storm of policy changes has created both relief and anxiety. From Victoria’s harbor-view condos to Whistler’s mountain chalets, a significant shift in the province’s housing landscape is unfolding.
The provincial government announced last week it’s walking back certain aspects of its controversial short-term rental regulations, particularly for resort municipalities like Whistler and Tofino. This adjustment comes amid growing economic pressure from U.S. tariffs on Canadian goods and strained cross-border trade relations.
“We’re making targeted adjustments to support tourism in communities where visitors are essential to local economies,” Housing Minister Ravi Kahlon told me during a phone interview on Tuesday. “But we remain committed to our core goal—ensuring homes are for people who live and work here.”
The original rules, which took effect May 1, prohibited short-term rentals except in an owner’s principal residence. The amendment now allows resort municipalities to designate specific zones where investor-owned properties can operate as vacation rentals year-round.
For Tofino Mayor Dan Law, the change represents a delicate balance. “Tourism drives our economy, but housing our workers is an existential crisis,” he explained while we walked through his community’s main street. “This flexibility helps, but we’re still facing tough choices about what kind of community we want to be.”
Tourism industry representatives view these adjustments as necessary but insufficient. Walt Judas, CEO of the Tourism Industry Association of BC, provided data showing vacation rental bookings had dropped nearly 30% since the regulations were announced last fall.
“Many international visitors book 6-8 months in advance,” Judas said. “The uncertainty created by these regulations has pushed travelers to look at Washington, Oregon, or Alberta instead.”
The timing couldn’t be more challenging for BC’s tourism sector. Recent U.S. tariffs on Canadian softwood lumber have already put pressure on many resource-dependent communities, with some now looking to tourism as an economic lifeline.
In Revelstoke, where both forestry and tourism drive the economy, Mayor Gary Sulz sees the housing-tourism balance as increasingly difficult. “When lumber mills reduce shifts due to tariffs, those workers often turn to tourism jobs. But where will they live if all our housing is for visitors?”
The province cites encouraging data: since announcing the short-term rental crackdown last October, approximately 3,200 former vacation properties have been listed for long-term rental or sale across BC. Housing advocates say this demonstrates the policy’s effectiveness despite industry pushback.
However, during community visits, I found the ground reality more nuanced. In Kelowna’s downtown, former Airbnb owner Michelle Westergaard showed me her now-empty condo. “I can’t make enough on long-term rental to cover my mortgage and strata fees. But I also can’t sell in this market without taking a massive loss.”
Westergaard represents thousands of small investors caught between policy changes and economic pressures. She purchased her unit in 2018 specifically as a vacation rental investment, with her financial planning built around that business model.
The province’s amendments attempt to address these concerns while maintaining focus on the housing crisis. Under the revised approach, purpose-built short-term rental accommodations in designated resort areas will be exempt from the principal residence requirement.
Whistler Mayor Jack Crompton welcomed the changes but emphasized they don’t solve all challenges. “We’re a community that needs both tourism accommodation and worker housing. These adjustments help, but we still need massive investment in affordable housing.”
The situation highlights the complex interplay between housing policy, tourism economics, and international trade pressures facing BC communities. With U.S.-Canada trade tensions escalating under American tariff policies, many tourism-dependent regions fear losing visitors could further damage already stressed local economies.
Housing advocates maintain a different perspective. “Every condo used for vacation rental is a home unavailable to a local worker or family,” said Jill Atkey of the BC Non-Profit Housing Association when we met in Vancouver last Thursday. “The housing crisis requires difficult choices, and primary homes for residents must take priority.”
For small business owners in tourism communities, the situation feels precarious. Ucluelet café owner Devon Richards told me his staffing challenges grow worse each year as housing becomes scarce. “I lost three experienced employees last summer because they couldn’t find anywhere to live. But my customers are mostly tourists—I need both visitors and workers to survive.”
The province promises additional support measures for tourism operators affected by the regulations, including marketing assistance and destination development funding. However, industry representatives question whether these will offset the loss of accommodation capacity.
As communities adapt to these evolving regulations against the backdrop of trade tensions and housing shortages, the province has committed to quarterly reviews of the policy’s impacts. The first comprehensive assessment is expected in September, potentially bringing further adjustments before the winter tourism season.
For now, BC’s tourism communities are navigating uncertainty with a mix of relief and concern. The amended regulations provide some breathing room, but the fundamental tension between housing needs and tourism economics remains unresolved—a challenge made more acute by broader economic pressures from strained Canada-U.S. trade relations.
