TOWNSHIP OF ESQUIMALT STAFF REPORT
MEETING DATE: June 22, 2026 Report No. DEV-26-032
TO: Council
FROM: Bill Brown, Director of Development Services
SUBJECT: Short Term Rentals Proposed Regulatory Framework
RECOMMENDATION:
Recommendation
That Council direct staff to prepare amendments to the Zoning Bylaw, Business Licence Bylaw, and the Bylaw Notice Enforcement Bylaw, based on the proposed regulatory framework outlined in the Report attached as Appendix “A” to Staff Report DEV-26-032.
Body
EXECUTIVE SUMMARY:
On March 16, 2026, the Short-Term Rental Policy Analysis Report was presented to Council by the consultant (see staff report DEV-26-011). Following the presentation Council provided staff and the consultant with direction upon which to base future regulations (Appendix “B”). Based on Council’s direction, the Consultant has prepared a Short-Term Rental Regulatory Outline (Appendix “A”). Council now needs to provide staff and the consultant with specific guidance, based on the information provided in the Report, that will then form the basis for a series of amendments to the Zoning Bylaw, Business Licence Bylaw, and Bylaw Notice Enforcement Bylaw along with a policy and operational procedures document.
BACKGROUND:
The consultant has prepared a Report (Appendix “A”) that provides Council with options based on their direction at the March 16, 2026, Council meeting. The Report outlines options for amending the Zoning Bylaw, Parking Bylaw, Business License Bylaw, Bylaw Notice Enforcement Bylaw, and creating a policy and operational procedures document. Highlights from the consultant’s Report are outlined below:
1. Zoning Bylaw
1.1. Bed and Breakfasts
1.1.1. Eliminate the existing Bed and Breakfast term and regulations.
1.1.2. Extend the meal permission to all STR operators.
1.1.3. Amend or rezone the RS-4 and RS-4A zones to align with a standard residential zone.
1.2. Keep the “Tourist Accommodation” term to allow for amenity-rich, dedicated guest accommodation units in mixed-use developments.
1.2.1 Clarify the distinction between Tourist Accommodation and Short-Term Rentals in the Bylaw.
1.2.2 All “Tourist Accommodation” use will need to comply with the provincial principal residence requirement or qualify as “Exempt Accommodation” (e.g. Strata Hotels or Fractional Ownership model).
1.3 Define Short Term Rentals as stays of less than 90 consecutive days.
1.3.1 This aligns with the provincial definition.
1.4 Monitor the prevalence of 90+ day listings following implementation.
1.4.1 Avoids additional regulatory complexity until the data warrants it.
1.5 Prohibit short-term rentals in secondary suites and garden suites.
1.5.1 This prohibition would apply to the secondary suite and detached accessory dwelling unit typologies.
1.5.2 The initial business licence inspection would verify the nature of the dwelling unit.
2. Parking Requirements
2.2 Require no additional parking beyond what is already required for residential use. See the Report for the rational for this recommendation.
3. Business Licence Bylaw
3.1 Business Licence Application Requirements.
3.1.1 Require a pre-licence inspection
3.1.2 Require proof of residency
3.1.3 Only one Licence per household
3.1.4 A responsible person must be designated.
3.1.5 Require a guest safety attestation
3.1.6 Require strata, owner, or landlord permission as needed.
3.1.7 Business licence number must be displayed on all advertisements and listings.
3.1.8 Require a higher initial licence fee to cover the costs of inspections with a lower renewal fee.
3.2 Establish a dedicated Short-Term Rental contravention and penalty schedule in the bylaw.
4. Enforcement and Administration
4.1 Take and maintain a proactive enforcement approach.
4.2 Create an internal enforcement guide.
4.3 Create a policy of enforcement priorities.
4.4 Make Short-Term Rentals part of one staff person core focus for the first 6 - 12 months tapering to part-time once a high baseline level of compliance is established.
Additional recommendations along with a discussion of each proposed action is found in the Report (Appendix “A”).
Chronology:
• In 2018, the Council added the following Objective and Policy to Section 16.4 the Official Community Plan:
o 16.4 Tourism
o Objective: Consider land use decisions that help promote tourism.
o Policy: Consider short-term vacation rentals within legal dwelling units, where the dwelling unit is an owner or tenant’s principal residence, for up to 60 days per year.
• October 26, 2023 - Bill 35, the Short-Term Rental Accommodations Act, received royal assent.
• “Short-term rental policy analysis” was subsequently incorporated into the Council Priorities Plan 2023 - 2026 as a project under the “Diversified & Thriving Economy” priority.
• July 15, 2024 - Staff Report No. DEV-24-036 entitled Short-Term Rental Regulations was presented to the Committee of the Whole.
• October 7, 2025 - Third Space Planning (consultant) hired to prepare a Report entitled Short-Term Rental Policy Analysis.
• November 19 to December 17, 2025 - On-line open house and survey.
• November 26, 2025 - Short-Term Rental Policy Analysis Open House held at the Recreation Centre.
• February 13, 2026 - Draft Short-Term Rental Policy Analysis Report submitted to the Township for review.
• March 16, 2026 - Council reviewed the Short-Term Rental Policy Analysis Report and provides staff and the consultant with direction to prepare a more focused report (Appendix “B”).
Advisory Body Recommendations:
• Staff have not presented the attached Report to any advisory bodies.
Referral Comments:
• The attached Report has not been referred to any departments, organizations, agencies, or First Nations.
ANALYSIS:
A detailed analysis of the various proposed decision options, along with a recommendation for each decision that needs to be made including the reasons for the recommendation, is found in the Report attached as Appendix “A”.
OPTIONS:
1. That Council direct staff to prepare amendments to the Zoning Bylaw, Business License Bylaw, and the Bylaw Notice Enforcement Bylaw, based on the proposed regulatory framework outlined in the Report attached as Appendix “A” to Staff Report DEV-26-032.
The proposed recommendations are based on Council’s discussions at their March 16, 2026 meeting along with the professional advice of the consultant.
2. That Council directs staff to provide further information on one or more of the proposed recommendations at a future Council meeting.
If Council is uncertain about a recommendation and would like additional information that is not readily available, it will be necessary for staff and the consultant to return at a future Council meeting with the additional information.
COUNCIL PRIORITY:
“Short-term rental policy analysis” was incorporated into the Council Priorities Plan 2023 - 2026 as a project under the “Diversified & Thriving Economy priority.
FINANCIAL IMPACT:
In terms of potential revenue, there will be a business licence fee. The amount is yet to be determined. The establishment of the business licence fee will require an amendment to the Business Licence Bylaw
In addition, there may be potential for Esquimalt to participate in the Municipal and Regional District Tax Program (MRDT). At this time staff and the consultant are recommending not to proceed with the MRDT, but rather get the basic program as outlined in the attached Report implemented. Later, once staff and Council feel comfortable with the basic program, the issue of whether to investigate the feasibility of participating in the MRDT program can be examined. The implementation of the proposed program represents a significant amount of staff time - adding additional complexity may delay the implementation of the basic program as proposed in the Report attached as Appendix “A”.
COMMUNICATIONS/ENGAGEMENT:
Appendix “D” contains several e-mails and a letter sent to Council since the March 16, 2026, meeting. These e-mails and the letter are in response to Council’s direction to staff on March 16, 2026. Note that staff followed Council’s direction - if Council wishes to incorporate some of the ideas put forth in the attached correspondence, Council will need to direct staff to do so.
Staff will ensure that appropriate communications bulletins are issued to keep residents aware of Council’s decisions on this matter. In addition, it is likely that a public hearing will be required for any amendments to the Zoning Bylaw.
TIMELINES & NEXT STEPS:
If Council provides staff with sufficient direction based on the Report attached as Appendix “A”, staff will return with proposed amendments to the Zoning Bylaw, Business Licence Bylaw, and the Bylaw Notice Enforcement Bylaw along with an accompanying policy and operational procedures document.
REPORT REVIEWED BY:
1. Deb Hopkins, Director of Corporate Services, Reviewed
2. Ian Irvine, Director of Finance, Reviewed
3. Steve Knoke, Acting Chief Administrative Officer, Concurrence
LIST OF ATTACHMENTS:
1. Appendix “A” Short-Term Rental regulatory Outline June 2026.
2. Appendix “B” Minutes of the March 16, 2026, Council meeting.
3. Appendix “C” Consultant’s Presentation.
4. Appendix “D” Correspondence from residence received since March 16, 2026, related to short-term rental policy.