Short-term rental rules have been a hot topic in B.C. for more than a year, but confusion still surrounds what the new legislation means and how it will be enforced. Even local officials and accommodation providers are grappling with the details. Here’s a breakdown of what’s changing, how Ladysmith is responding, and what it all means for the community.
What is a short-term rental, and how is it different from a bed and breakfast?
In Ladysmith, a short-term rental (STR) refers to the rental of an entire home, suite or apartment for less than 30 days. These rentals are generally self-contained, with private kitchens and entrances. In contrast, a bed and breakfast is when someone rents out rooms in their principal residence and shares living space with guests. B&Bs are permitted more broadly in residential zones, but STRs are only allowed in specific commercial and agricultural areas.
What’s allowed in Ladysmith right now?
Currently, STRs are only permitted in the C-2, C-4, CD-7, and A-RR1 zones. Outside those areas, renting out an entire unit or secondary suite for short-term stays is not allowed. Bed and breakfasts are legal in more zones, provided the owner lives on site.
Despite the rules, about half of the 50 active short-term rental listings in Ladysmith operate outside the permitted zones, putting them in violation of municipal bylaws. These operators have continued due to limited enforcement but could soon face removal under new provincial rules.
What’s changing at the provincial level?
Effective May 1, B.C.’s Short-Term Rental Accommodations Act will require all STR operators to register with the province. To register, hosts must first obtain a valid business licence from their municipality. Listings that do not include a provincial registration number will be removed from platforms such as Airbnb and VRBO starting May 1. Operators can still honour existing bookings made before that date, but any remaining reservations will be cancelled by booking platforms if the operator is not registered by June 1.
One of the most significant elements of the new legislation is the principal residence requirement, which mandates that short-term rental operators live in the home they are renting out. This rule is automatically in effect in larger municipalities, generally those with populations over 10,000, and in certain designated communities. However, smaller municipalities like Ladysmith are not required to adopt this rule.
Municipalities that fall outside the automatic requirement can choose to opt in by passing a local bylaw. Some Cowichan Valley communities, including Mill Bay and Shawnigan Lake, have done so. Ladysmith has not opted in, meaning short-term rentals here are not subject to the principal residence rule. However, operators must still comply with local zoning bylaws and business licensing rules.
How is Ladysmith responding?
To address the gap between zoning rules and the provincial deadline, Ladysmith council has proposed Bylaw 2205, which would allow a limited number of short-term rentals outside permitted zones to apply for Temporary Use Permits (TUPs). The bylaw passed first and second readings on April 1 and will go to a public hearing before it can be adopted. If adopted, it would allow up to 10 TUPs while the town's vacancy rate remains below three per cent.
The goal is to balance housing supply with tourism and worker accommodation needs.
Council also approved early intake of TUP applications, though staff have cautioned that the process is unlikely to be completed before the provincial May 1 deadline.
Is it too late to comply before May 1?
In most cases, short-term rental operators who are not already in a permitted zone and do not have an existing business licence are unlikely to finish the TUP process, obtain a licence and register with the province in time. Even if an application was submitted on April 2, the timelines for council review, public notification and approval make pre-deadline compliance improbable.
Why are STRs limited to certain zones?
Restricting STRs to commercial and agricultural zones helps protect long-term rental housing and preserve residential neighbourhoods. It also helps support traditional accommodations like hotels and ensures short-term rentals are located in areas that have adequate services (such as parking, waste collection and safety oversight) and where the town can more easily monitor and manage their impact.
What are other communities doing?
Municipalities across B.C. are dealing with similar issues. Some, like Vancouver and Victoria, were early adopters of rules requiring hosts to live in the property and hold a business licence. These steps, along with enforcement, helped return more homes to the long-term rental market.
Meanwhile, Parksville and Penticton have expressed concern that new provincial rules could hurt their tourism economies. A legal challenge by a group called the West Coast Association for Property Rights along with Amala Vacation Rental Solutions Ltd. was dismissed earlier this year, and the province has since created a compliance unit to monitor enforcement.
Why wasn’t this addressed earlier?
Although the provincial legislation was passed in October 2023, implementing local solutions takes time. Municipalities like Ladysmith must follow formal processes including multiple bylaw readings, public consultation and legal referrals before adopting any changes. In smaller towns, limited staff and administrative capacity can further delay progress. The combination of legislative requirements, policy development and competing priorities has contributed to Ladysmith, like many communities, only now bringing forward a formal solution.
What happens next?
A public hearing will be scheduled for Bylaw 2205. Meanwhile, unlicensed STRs will likely be delisted from major platforms in May unless registered in time. While the proposed bylaw may offer some relief, the vast majority of non-compliant rentals will face removal. There is no appeal process for delisting on platforms if the host isn’t registered. Platforms are legally required to enforce provincial rules.
If a property is delisted or bookings are cancelled, STR operators can complete the required steps with the municipality and then the province to be reinstated on platforms. This process could allow them to resume operations later in the season. Alternatively, operators may opt to convert the unit into a long-term rental or use it as a personal residence instead.
Across B.C., municipalities are helping short-term rental operators adjust to new provincial rules while also addressing local housing needs. In Ladysmith and similar communities, the changes aim to align local policies with provincial efforts, supporting housing availability and defining the role of short-term rentals in the local economy.
Quick facts: Short-term rentals in Ladysmith
• Number of active STR listings: ~50
• Listings outside permitted zones: ~25
• Permitted STR zones: C-2, C-4, CD-7, A-RR1
• Business licence fee: $100/year
• Temporary Use Permit fee: $1,500 plus notification costs
• Provincial STR registration fee: $100 (principal residence), $450 (non-principal)
• Deadline to register with province: May 1, 2025
• Listings without registration removed: May 1
• Existing reservations for unregistered short-term rentals cancelled: June 1
• Public hearing for Bylaw 2205: To be scheduled
