[00:00:57] John: Good afternoon, Mateo. How are you?

[00:00:59] Mateo: fantastic, brother, as usual. How are you?

[00:01:02] John: I’m good, man. I’m good. It’s No BS Podcast, Episode 121. We have a great guest, another Canadian guest, and I’m excited to dive into this And the differences between what Canadians are going through with some of these municipalities and some of these regulations. Excited to dive in. We’re talking BC here. If you’ve been living under a rock you might not know, British Columbia has been dealing with some pretty strict regulatory issues.

[00:01:27] John: And there’s been some new advancements that I learned from our guest through our Instagram channel. But whatever that means, we’re going to dive into it and we’re also going to learn a lot about what our guest is from her past and where she’s going. So without further ado,

[00:01:43] Mateo: Yeah.

[00:01:44] John: Deanna Steele, thanks so much for joining us.

[00:01:47] Deanna: Thank you for having me all the way from Canada.

[00:01:49] Mateo: Hey, the Pacific Northwest. We didn’t get through this. I’m from there, I’m from Portland B. C. was like, one of my favorite spots. It was it was, yeah. If

[00:01:59] Deanna: familiar territory. Yeah.

[00:02:01] Mateo: fact.

[00:02:02] John: I I can’t claim the Pacific Northwest as home, but I did live in Oregon for three years, but no, that’s, it’s not really home. It was a short stint in my early twenties.

[00:02:13] Mateo: Honorary mention, maybe, kinda. Maybe.

[00:02:16] Deanna: Where I am, we call ourselves Canada’s California because we’re at the tip of the Sonoran desert. So we’re a lot drier than Portland or like Vancouver, a lot drier. So basically after dumps all the rain,

[00:02:30] Deanna: The West Coast, we get just a smidgen of it. Honestly, I don’t even know where I could find an umbrella in my house.

[00:02:36] Deanna: It rains not often at all. We have vineyards, a lot of vineyards. like California where we have that dry, perfect agricultural terroir for all these vineyards and wineries we have. And then we also have a massive freshwater lake that spans three cities over a hundred kilometers.

[00:02:52] Deanna: It’s stunning. So really cool, totally different from what maybe you’re used to seeing in the Pacific Northwest. Cause we’re just like 35 minutes inland. If you were to fly over the mountain range you’ll find a very desert like, very California like backdrop.

[00:03:08] John: It’s like going to

[00:03:08] Mateo: the Pacific Northwest, though. Seriously, you get on the other side of the Cascades, anywhere, Oregon, Washington, is desert. You get into Bend, you get into Central, that high desert area. That’s how you know we’re really from there. It’s a completely different landscape that most people, unless you go there regularly or unless you’ve been there, you wouldn’t know.

[00:03:26] Mateo: You know that, John. You know what it’s like on the other

[00:03:29] John: I lived in Hood River and you’d go right on the Columbia River Gorge and you’d literally drive 20 minutes here in the desert in the Dalles. Thanks so much for joining us. Tell us about how you got into to hospitality. You’ve been you are the founder, and I’m not knowing your exact title here, but for Keys to Kelowna And you’ve been doing that for 11, 12 years now,

[00:03:53] John: We all have an interesting story, how we came into hospitality and we’d love to hear yours.

[00:03:58] Deanna: Yeah, so I have always been around real estate in some respect. Prior to stepping into this role in short term rental management, I own and manage some of mine. So basically how I started was overhearing I think it was like, 19. And I had my first home at that point. And I’d overheard a banker saying that he had outfitted his house to sleep 18 people for our local dragon boat festivals.

[00:04:29] Deanna: And how much money he had made on his second summer, he decided to buy a brand new condo, move out of his home and into a condo. And this was like 20 plus years ago, except I didn’t say how old I was there. Pardon me. Oh no.

[00:04:43] John: You’re,

[00:04:43] Deanna: Don’t do the math.

[00:04:44] Mateo: We won’t ask.

[00:04:45] John: said, I’m doing some math. You’re a little bit younger than us. We’ll just leave it there.

[00:04:49] Deanna: Very much younger. Yes. Anyways,

[00:04:51] John: Very. And I, at least, yes.

[00:04:54] Deanna: 20 years, 20 years. So I had a

[00:04:57] Mateo: gonna ask.

[00:04:58] Deanna: Yeah.

[00:04:59] John: weren’t asking, you spill the tea, we’ll let, we’ll run with it.

[00:05:02] Deanna: So I was really inspired by that. And so I started renting rooms in my own personal property. That was super lucrative and I wanted to travel. I had, I haven’t really worked a normal conventional job for probably 18 years. So I was very mobile. My whole goal was always to be mobile. So I would leave my home, rent it to whether it be international students or business travelers as a furnished rental.

[00:05:30] Deanna: Monthly stay so I could go and I could come back and have a place to stay. And then I moved to Italy with my partner and we used Airbnb. And I was like, oh, cool people, cool brand, cool vibe. That was 2012 2013. And when I came back to Canada, I was like, I’m gonna do this with my house. So I gave it a shot.

[00:05:49] Deanna: Super lucrative. It was illegal at that time to do. But again, guests, great. No problem. Shouldn’t be an issue and moved out of my place and turned it into a full time short term rental. And Airbnb just launched their co hosting program. So they actually reached out. I ignored the email. And then two weeks later, opened the email, left the tab open for another couple of weeks.

[00:06:11] Deanna: And I was like, okay, I gotta get rid of all these tabs. So I took a quick look at it and it was a super short Do you want to work with other homeowners in your area? And just fill out your bio, send, submit, and within three hours, I had signed two properties. As just Deanna Steele being a host myself, I talked to an individual, yeah, who had his properties listed on Airbnb.

[00:06:32] Deanna: Airbnb must have pushed me to him. And just took off from there. That was my only lead from that co host program, but through word of mouth. And I think because it was just starting to really gain momentum back in 2013 that’s just fell into my lap and I love it. I love real estate.

[00:06:49] Deanna: I worked for a real estate developer here in the city. So I love, I just love everything real estate except property management. Funny enough, I would never do long term rentals. for the life of me, but the beauty of short term rentals, it’s like a mix of it’s it’s hospitality. It’s a totally different beast.

[00:07:07] Deanna: It’s a totally different business from long term rentals. And I love it. And I started to think about at originally, I was like, Oh my God, I’m making money for every night someone sleeps in my house. So it’s the whole like, Make money while you sleep. I’m like, I’m making money while other people are sleeping.

[00:07:23] Deanna: So I was really just jazzed by that, just doing the math every night. I was like, huh, I’m going to bed. And I think at that point I was like, oh, it’s $120 a night I’m making and I’m just, I just put people in beds.

[00:07:34] Deanna: I fell in love with it and I honestly didn’t decide to brand myself. I think until 20. 18, 2019.

[00:07:42] Deanna: I can’t recall honestly the years because I’ve been around so long. I just

[00:07:47] Deanna: Blend into each other, but I decided to brand the company as Keys to Kona. I put my other two companies to bed and I just went all in.

[00:07:53] John: And when was that again? When you went all in?

[00:07:56] Deanna: 2018, 2019.

[00:07:57] John: At that time you had when you went all in, how many propers were you managing at that

[00:08:02] Deanna: I think it was around 10. I think it was around 10. And I had just purchased my second one to do full time, which was a legal short term rental in a building that was zoned by the city to allow full time short term rentals. So I paid a premium. I overpaid for that property but it’s been super fruitful.

[00:08:19] Deanna: So I was glad I made that decision.

[00:08:21] John: So now in 2024, you’ve, a few years have passed. What are you managing today?

[00:08:28] Deanna: Absent flows because we’re a very seasonal market. We’re about 34 ish signed, actually signed probably three last week. So honestly, I don’t know. I don’t know because things are changing so rapidly. Our churn, my intentional churn, I usually purge like the bottom 20 percent every year, flush them out and refresh.

[00:08:48] Deanna: But I’ve never been a big fan. About the volume, I’ve always been about the quality of my inventory, so we started targeting the luxury market because those can offer you 10x, what one property can. Yeah, I did have huge plans to expand though. I was gunning for 70 this year because we had a lot of new developments that were short term rental approved under construction set to complete this summer.

[00:09:11] Deanna: About 400 units were about to come onto the market. So I thought I can scoop 25 percent of that now with the command I have on the market here. Yeah, so I was about to

[00:09:20] John: You had big plans and what happened

[00:09:23] Deanna: They all went to hell in a handbasket in about 10 days.

[00:09:27] Mateo: Yeah.

[00:09:27] Deanna: normally I’m not so cheesy, I would swear my face off because in October, I knew something was brewing because we, our market had doubled in inventory almost overnight.

[00:09:39] Deanna: During that gold rush, investors just flooded the market everywhere, really, right? It’s a global phenomenon what happened with that tipping point with short term rentals. So I knew, okay, we’re in trouble. I know it’s time the city wanted to revisit our regulations locally. And with all that volume, we were getting eight leads a day.

[00:09:58] Deanna: I would turn away. 100 percent of them almost because I didn’t want them on the market, but there are some hungry managers out there who signed them. So I knew with all that volume, we’re going to have more noise complaints, more car parking complaints. We’re going to have more complaints from individuals who were, saying that we’re taking housing away from them.

[00:10:17] Deanna: And that’s exactly what happened. The affordable housing narrative again, globally is taking off. And I absolutely believe it. Do I think it’s the fault of short term rentals? No. So our provincial government rolled out some insane regulations that came out of left field. Everything that we had thought was coming, like standardizing the industry a little bit more, maybe requiring managers for every rental versus self management, something like that.

[00:10:44] Deanna: Quotas. Thought that might come. That was not the case. It was a clean sweep across the entire province. So instead of leaving regulations up to each city and municipality, the province said no we’re removing any grandfathered rights, legal non conforming rights to any of the buildings that you built as short term rentals or resorts or strata hotels, things like that.

[00:11:07] Deanna: We’re wiping those clean and we’re only allowing you to offer your principal residence that you live in. Including, which blows my mind, they also said if there is a like an ADU, an accessory dwelling unit, or a carriage house, or a basement suite, you are also allowed to offer that if it’s on your principal residence, the same

[00:11:27] John: like on the, on that same property and

[00:11:29] Mateo: Yeah.

[00:11:30] Deanna: Super odd when speaking about, housing affordability, because that’s their narrative. They want to bring more rentals back onto the market. That’s what they’re trying to encourage among many other things that they’re doing. I can share that in a moment. But for me, basement suites are always very affordable rentals.

[00:11:45] Deanna: So why would you allow that? And then same thing with like carriage houses, backyard, ADUs. So that was odd. So then they also gave the each individual city, the option to add further restrictions, not remove, but add further. So in my market, we’ve removed the option to do basement suites or carriage homes, as well as delete zoning for short term rentals through the entire city.

[00:12:10] Deanna: Meaning. There will be no new short term rentals hitting the market and they’re only allowing 500 or less licenses to be granted. So I felt and it’s the word of warning for everybody, so the legislation rolled out in ten days and they seem to be two steps ahead of every, everything that we were all plotting and planning because it was, it’s rolling out half baked, the legislation. So they said it will come out in phases. Every time someone’s I’m going to then acclaim this as my principal residence because we cannot afford to not offer this as a short term rental.

[00:12:48] Deanna: Then the city’s rolled out we’re actually removing zoning from the entire city. So if it’s your principal residence, you won’t even be able to apply for a license, even though the province said yes. The city says no. So it was just shocking. People are panicking. Especially for the built, we’ve all been operating legally with business licenses.

[00:13:06] Deanna: Half of us were, the other half, we don’t even need to

[00:13:10] John: You’re going to have that everywhere.

[00:13:11] Deanna: So half of us were we’ve paid premiums for these properties upwards of honestly for some of the two bedroom two bath condos Some people are paying about two hundred thousand dollars more For that building just because we have the permission to short term rent no longer.

[00:13:26] Deanna: So all these new Under construction were legal units that are about to close at these extraordinary interest rates.

[00:13:35] Deanna: They will no longer have the option to do that. So they’re either forced onto the long term rental market. Or forced to sell. But funny enough, last week we just rolled out a new tax. We have a few taxes here, so it’s not very investor friendly.

[00:13:50] Deanna: Again, this could happen to everyone. We have a vacancy tax in Vancouver. So if your home is vacant for a certain period of time, you have to pay a tax.

[00:13:58] Mateo: Yeah. Yeah.

[00:14:00] Deanna: then there’s a speculation tax. So if your home is not rented for six months, it can be six one month reservations, or it can be one person for six months, or you use it for six months.

[00:14:11] Deanna: If not, you pay half a percent to 2 percent of your home’s assessed value in taxes every year. So you have to make a declaration. Wild. It’s so expensive. And then we just rolled out an anti flipping tax. So if you flip your home in two years from purchasing it, so all these condos that are coming onto the market, and you make a profit, you will pay 20 percent of tax on that profit.

[00:14:39] Mateo Bradford-Vazquez: hey, John. Let’s talk about one of the most frustrating challenges of hosting. Cleaning. Seriously. Hosting is hard enough. Why does cleaning have to be such a pain?

[00:14:48] John: SDR cleaning is not the same as residential, and you need someone who knows the difference. Plus cleaners have access to your property. You need to find people who are qualified and trustworthy.

[00:14:57] Mateo Bradford-Vazquez: Add to that, you need cleaners who don’t need to be micromanaged. Who has time to text schedules back and forth and try to confirm days and times? Especially when bookings change. And then, dealing with invoices, payments, and tax reporting.

[00:15:10] John: Turno has solved all of these challenges with this cleaning management software. Turno’s Cleaner Marketplace has over 55, 000 vetted short term rental cleaners, and they make finding a local cleaner super easy. You just enter some property and cleaning details, and cleaners start bidding.

[00:15:24] John: You can see things like competitive cleaner prices, business credentials, and reviews before you agree to work together. Plus, Marketplace cleaners are paid automatically once the job is completed. No more manual payment hassles.

[00:15:35] Mateo Bradford-Vazquez: When you sync Turno to your listing calendars, every turnover gets auto scheduled as bookings come in. And if anything changes, your cleaner is notified immediately. Plus, cleaners can see if it’s a same day turnover, so they know right away that time is critical.

[00:15:48] Mateo Bradford-Vazquez: And with tools like Photo Checklist, Inventory Management, Problem Reporting, and the Guest Checkout Review Prompt, Turno gives hosts real time eyes and ears on the ground, right from the cleaner to the host’s app.

[00:15:58] John: No BS. Listeners can get $150 Amazon gift card when they try Turno and its cleaner marketplace. New users can sign up at turno.com/noBS, search for a cleaner in your area, connect with one or more, and then complete a marketplace cleaning. Once you see how easy and simple cleaning management can be, you’ll love how much time and money you save, not to mention no more cleaning headaches. To learn more, go to turno.com/noBS and get started today

[00:16:22] Mateo: who’s advising municipalities? You’ve seen this full scope, right? Like, when you came into the industry, and it’s something I actually wanted to ask you about a little earlier, is you’ve seen the changes, you’ve seen this grow, and it seems like there’s consistently somebody driving the narrative, right?

[00:16:38] Mateo: . Hey, this is bad for the economy overall. This is bad for housing overall. Like these, who is advising these, provincial or municipal governments, to enact these policies because it’s clearly not the industry, it’s clearly not the professionals, who are doing a good job, who have standards and like yourself and who are operating, as a business and with an open mindset, and understanding that there is impact. But who’s advising these, who’s the one giving this bad information or giving this bad guidance,

[00:17:09] Deanna: Excellent question. There’s an organization who I would consider a sleeper organization. I subscribe to their emails and I didn’t see much about this, but it is the Hotel Association. So the British Columbia Hotel Association and I believe the Canadian funded a study, which showed how short term rentals are impacting the price of long term rentals as well as one of their major complaints is in the service industry.

[00:17:36] Deanna: So for their hotel staff or restaurant staff, et cetera, they can’t find affordable homes to rent. So they’re having a staffing shortage because they can’t hire anyone. When everyone’s looking to come, they, May take the position but then decline because they realize they can’t find an affordable place to live or it’s just too much of a challenge or whatever sacrifices they don’t want to make.

[00:17:58] Deanna: So the Hotel Association, I had no idea how active and proactive they were because in our market, their growth their, they’ve got strong growth every year. Their numbers are up every year. So I didn’t think that they really saw us as a threat. And that’s a mistake too. I was really involved in 2019 when our local city, because each city was allowed to make their own regulations, I was heavily involved in that process.

[00:18:24] Deanna: And then, That was it. I wasn’t involved after that, because everything was going tickety boo! Everything was healthy, our businesses were very we were strong, our guests were great, there’s very little complaints, very little bad actors, so I didn’t advocate it. Because we don’t have an association ourselves, but as an individual, I didn’t connect with my city councillors, I didn’t connect with anyone sharing the positive stories of how short term rentals impact our community.

[00:18:55] Deanna: And that was a huge mistake, because as I was not doing that, there were other people sending in their complaints, piling up on city counselors desks, so all they saw was a mountain of complaints, no positives.

[00:19:08] Mateo: Yeah,

[00:19:08] John: interesting because that’s exactly what I was just going to ask. And in retrospect what would you have done differently? And you already answered that, we see a lot with these regulatory fights in all these different communities across the U. S. and across the world now is that, it’s like, The biggest thing that we advocate for and promote to our listeners is to get involved early.

[00:19:29] John: Establish yourself as the trusted professional, as the trusted source, as the person that the municipalities go to, to learn about short term rentals, to learn about like the, all the positives. And it sounds like you started to do that and you were at least locally you were and, obviously, In retrospect, you wish you would have stayed involved throughout and let’s be honest to those who are listening.

[00:19:52] John: If you don’t know Canada got like the stronghold or the Canadian government stronghold when COVID hit and they weren’t allowed to do shit. Like truly for a long time, you guys were screwed. And so maybe everyone felt their hands were tied. And, at that time and you didn’t, there was no need one way or another to be proactive or active at all and I’m just spitballing.

[00:20:18] Mateo: but John also let’s be honest, like the, when you look at the regulatory fight globally, right? Keyword being fight, right? It’s always combative, right? And we also have to take responsibility in that fact that just now and you’ve seen, we’ve been doing this for a while we were just talking about AMSTRA and what we’re doing here in Atlanta.

[00:20:36] Mateo: We didn’t position ourselves to be the professionals and to be allies, right? We didn’t come in a spirit of partnership. It was like, up, this regulation’s some bullshit, we’re gonna sue. And immediately when you sue, you put a defensive posture on both sides and now you’re fighting as opposed to being like, hey, look, we’re, we are the ones who should be guiding this policy.

[00:20:56] Mateo: We are the ones, who are the good actors. We’re the ones who actually care, right? We care about the issues. We care about our impact. We care about standards. We see hospitality as an inclusive space, whereas other actors who you said earlier in which I will not name, see us as a threat.

[00:21:13] Mateo: But we don’t see them as a threat. We actually just see us as another part of hospitality and it’d be interesting to see, with like demand numbers, because we’re doing it here in Atlanta right now we’re about to get the World Cup we’re doing all these things. We had a ridiculous, regulatory environment, and now the city sitting up here we don’t have enough hospitality, and of that hospitality that’s needed.

[00:21:33] Mateo: The demand for hotels is minimal based on, and again, like they, people want diversity within the space. And so like that whole mindset from us, like I think is, not, again, you don’t know what you don’t know, but again I feel like now we’re seeing more of the, hey, the reasonable conversations and yeah, the, we should be a part of this conversation.

[00:21:55] Mateo: We are the professionals. We’ve been doing this for a while. Yeah. And we’re the ones you want because with us, you’re not going to get the hustlers, the people who are, putting fraud and bogus listings up there. The ones who actually do give a damn about the impact and want to ensure that there’s equity across the board, that we’re able to, run our businesses that thrive and employ people, right?

[00:22:16] John: Yeah and raise the standards across the board, I know that, a lot of this stuff we’ll be talking about, at the upcoming CanStays short term rental alliance here in a month and a half or so. But there’s a lot of issues I think that aren’t necessarily spoken yet in these, in these municipalities, but there’s, the trafficking issues and all these different things that aren’t necessarily being addressed in a positive light and they’re just getting a negative light put on them.

[00:22:44] John: And if overall as an organization, as in STRs and as pros, if we’re to bring light to this and say, yeah, we understand that this is an issue. How do we go ahead and fix it? And, because it doesn’t just happen in STRs, it’s happening in hotels and in motels and everywhere, it’s not, and that’s just one facet of the issue.

[00:23:06] John: I don’t know, Deanna, did you get a chance to see the article by the Harvard Business Review that came out a few weeks ago talking about the real impact of STRs in New York City?

[00:23:18] Deanna: I’ve read so much. I couldn’t say it in faith? Yeah.

[00:23:23] John: it’s basically, long story short, read it when you get a chance. Harvard Business Review came out with a study or just an article saying basically, hey, short term rentals didn’t really, and Airbnb and Superhost didn’t really, they’re not the reason for the, the lack of housing.

[00:23:38] John: They’re not the reason for the increased housing costs and, rental costs. Truly over like a four year plan, I think it raised like 3%. Based on short term rentals, but it was everything else that happened that was the true reason for prices skyrocketing, and you’re seeing that in Vancouver, and you’re seeing that in every major municipality, and it’s not the STRs that are the fault, but it’s an easy, blame, and

[00:24:06] Mateo: when New York banned it, and look at the rents in New York right now and you look at the rents in any major city right now, especially the, those cities that have that kind of a draconian regulation, Portland, same way, where my house in Portland, John knows I can’t rent my house in Portland on the short term on a market.

[00:24:22] Mateo: It didn’t make economic sense for me to do right? Rents in Portland didn’t get any cheaper. Like that, that, so again, I think it’s the disingenuous nature of the conversation and there’s in, in the Harvard studies, just one of many.

[00:24:36] John: it’s just one small.

[00:24:38] Mateo: have done, that others have done, that kind of show that, look, we’re not saying there’s no impact, but we are not the, because no one’s talking about the build to rent, the, the the other models of, what’s going on in, in housing and what’s being built, types of housing that’s built, and I’d love to know more about, because you have a super seasonal market, you said, right?

[00:24:57] Mateo: And so those markets are interesting to me because It seems like there’s a large economic boom that comes, in waves, and what they’re actually doing is stemming that tide to a certain extent. They’re shooting themselves in the foot as opposed to, working out something that could really, promote growth within the area.

[00:25:17] Mateo: You’ve seen this from day one. How do you see this? Is it affecting, how does it affect your business now? What is your thoughts for the future in terms of, where it’s going and where you see it going? What are how are you, how do you strategize for this from a business perspective?

[00:25:32] Deanna: First you cry, just kidding. You grieve, right? I had to put all of my plans, my future plans to bed and pivot. overnight. Thankfully because you watch and hopefully all the listeners will heed this as warning. I’d seen other markets for the last several years, European markets, everybody. I meet with a group every week where we call ourselves the real hosts of short term rentals and we’re like a global group.

[00:25:57] Deanna: So I can keep tabs on what’s cooking out there. So I knew that short term rentals was a political hot topic. Unfortunately in our market as well, like listening, I think this is advice for everybody. Listen, actually listen to your political figures. Don’t read the articles.

[00:26:18] Deanna: Watch the press release. I was blown away at the language that they were using when they were being asked, how are you measuring? How are you measuring the impacts or to know that this legislation will be successful? And our housing minister said if one short term rental converts to long term rentals, that’s better than none.

[00:26:38] Deanna: And I was like, how? Ignorant. What about all the unintended consequences, the ripple effect from this? So when asking about my business, thankfully, I’ve protected myself and my owners are all standing by me. We’ve done over 55 percent of our revenue as midterm rentals, and that’s actually been really successful, almost bringing in more revenue than short term rentals over the year, depending on the unit, because of the seasonality.

[00:27:04] Deanna: So that, That stability offers you like the guarantee of long term rentals, but the high revenue of short term rentals, it’s a beautiful hybrid. So we’re okay, but my cleaners, because we don’t need them as often doing mid term rentals and they’re all panicking, looking forward, knowing that 80 percent of our inventory is out the door in seven weeks time.

[00:27:26] Deanna: They’re panicking. The tourism sector, a lot of restauranteurs, just even with the economic slowdown, things are tight. Like we said, 50 percent of our restaurants aren’t breaking even right now, and knowing that the tourists either won’t have the same amount of spending dollars because they’re spending a ton of money on hotels, Or the volume, because we won’t be able to host everybody.

[00:27:48] Deanna: That’s really making everyone nervous as well. So there’s several factors in that trickle down effect. And it’s very interesting. Our tourism board locally did not speak up five years ago, and they just submitted a very piss poor letter to the city. And they took zero position. on the value that short term rentals bring, but we also understand that we need affordable housing for our service providers to host their employees.

[00:28:17] Deanna: There’s, They took a wishy, they took a a wishy washy position on being, yeah, they’re just being

[00:28:24] Mateo: Everybody’s playing scared. But that’s the that’s what they want you to do. Are you able to build a coalition of the restaurant owners, of the cleaners, of the economic, of that ecosystem, right? That short term rental support within that system to actually push an argument?

[00:28:39] Deanna: Yeah, so we’ve had since five years ago when we were going through our local regulations, we had a grassroots group forming. We called ourselves Professional Operators of Kelowna or whatever, and we assembled, and there would only be about 200 of us, but several of us were vocal in there trying to promote responsible hosting, trying to help other hosts solve problems.

[00:28:59] Deanna: But that, again, wasn’t good enough. We should have done something official, and then we should have kept, had a representative communicating, or at least telling us how to communicate with our representatives in the city. So now, a group out of Victoria, a group of property managers and individual homeowners.

[00:29:16] Deanna: So Victoria is our capital city of the province. They were also heavily impacted. We honestly compete for top spot in Canada.

[00:29:26] Mateo: Yep.

[00:29:27] Deanna: It’s either Victoria Kelowna, Victoria. They were heavily impacted by these laws, so a group of them got together and they formed a property rights association. Very quickly, they were able to form a non for profit so that we would, the idea was to have the association outlive the short term rental war fight that we’re in because we want to make sure that the government understands that they cannot take away our rights, what we can do with our property.

[00:29:53] Deanna: So I’m a member. I’m not a director. And they are currently working on, so we’ve raised enough money to engage a legal team to challenge the legislation with the

[00:30:04] John: Was the $150,000 that you guys just by, you had a certain date, was it March

[00:30:11] Deanna: Yes.

[00:30:11] John: 1st? Yeah, I pay attention.

[00:30:13] Deanna: You’re a

[00:30:13] Mateo: They got hit. Victoria. Yeah. Victoria was crazy. I was talking to a property manager out there a couple of months back and they were just like, this makes no sense. And, markets like that, like in, Victoria, if you’ve been there, like it is a vacation destination spot and you have people that have all kinds of inventory on the beach, resort type, short term rentals, and they were all like getting handcuffed in. Yeah, it’s. Yeah, overnight.

[00:30:43] Deanna: Overnight. Yeah.

[00:30:45] John: So what has come of the?, so you raised $150,000

[00:30:49] Deanna: A lot of people are like, how did you come up with 150? So the legal team that they engaged originally and something to note too, is the Property Rights Association is not the petitioner. So three individuals have to put their names forward to take on the province.

[00:31:04] Deanna: The Non for Profit Association was just basically the marketing engine to get this out to the people to fundraise. So 150 is based off of the lawyer’s recommendation that this is what it would cost to challenge them. And should we lose, the 150 will also include what we’d be responsible for covering in legal fees.

[00:31:24] Deanna: So that’s something to keep in mind is you, if you lose, you have to pay for the, the other party’s legal fees. So that’s bundled in there. And and the beauty of the association too, is we’re able to just have one spokesperson, for the media who’s absolutely killing it and loving it.

[00:31:41] Deanna: So we’ve got tons of media exposure. Originally, we were all very nervous to get media exposure. We thought that people were going to be coming for our businesses, and just ripping us apart because I would say 90 percent of the people out there understand that like affordable housing is a challenge and the fingers are being pointed at us.

[00:32:00] Deanna: They haven’t done their research in there. They are, an angry mob. But now that time has passed and we’re able to get that positive message out there listen, the impact on tourism, the impact on housing affordability for the homeowners that own these homes, right? It is cheaper to rent a home right now than it is to purchase.

[00:32:18] Deanna: And these carrying costs are outrageous. So we’ve just changed the narrative a little bit more positive. These are all the things that we do for our community, which is something we should all be doing right now after you finish listening to this podcast.

[00:32:29] John: 100 percent

[00:32:30] Deanna: A special note of those stories that light you up when you meet your guests or you hear from them or, like, why they’re here or why or whatever.

[00:32:38] Deanna: That’s all you have to send them is a quick note by being, like, this is the family that we helped. They came here for whatever reason. If you’re looking for inspiration, those are the stories that they want to hear. They don’t need much, honestly. Keep it concise and keep it on the regular when soliciting or advocating to your city counselors.

[00:32:56] Deanna: Just a simple story of something that you’ve told one of your friends or something that lit you up about your guests. That’s all they need to hear is those positive stories. But yeah, the

[00:33:03] Deanna: association, go ahead.

[00:33:05] John: what I have seen as productive and positive too, is, not only like the experience they had at your property, but what they did in your community. Basically, how much money did you spend? Is there a way to go ahead and showcase without saying, I spent exactly, we did this.

[00:33:19] John: I, we enjoyed this. We did, you quickly, start adding it up in your head. Oh, I spent thousands. They sent thousands over these, week that they

[00:33:28] Mateo: Small business impact like

[00:33:30] John: It’s huge.

[00:33:31] Mateo: I have a question about, you said something about home ownership and, in the states here, we think of property rights and, the right to have the freedom to do with what you like with your property, is. Depending on what state you’re in here people’s viewpoints on that vary.

[00:33:49] Mateo: I know in Vancouver, housing affordability has been ridiculous forever. And it’s not because of short term rentals. I’m not even going to touch as to why, but it’s always been that way. Beautiful city, whatever. What do, what is the average homeowner in Canada feel. Is it a provincial issue? Is it, do they feel empowered?

[00:34:09] Mateo: Do they feel like their rights are being taken away? Do they feel, give me a little bit about, that viewpoint. Cause here it’s you’ll go to some states and they’ll be like, you can’t tell me what to do with my land. That’s taking my freedom away. And other people are like it’s, we’re contributing to whatever and don’t really care.

[00:34:26] Mateo: But I don’t have that reference point for Canada. So talk to us a little bit about that.

[00:34:32] Deanna: I think homeowners are feeling exhausted by all of this, but by, especially again in BC, like we have, A ton of initiatives have been taken. There’s a foreign buyers ban. We had a foreign buyer ban. If you’re not Canadian, you could not purchase a property in Canada for two years.

[00:34:46] Deanna: Now they’ve extended it another two years. Then we have the vacancy tax, which made zero impact. The speculation tax. Zero impact, so all of these efforts are only filling government coffers, causing us an administration headache. There was an underused housing tax declaration that we all panicked to fill out.

[00:35:07] Deanna: And we were like, do we qualify? What’s happening? What does this mean if we don’t fill it out? They take 50, 000. So we’re just so tired of this. These are our properties. And As a secondary property investor, I think people are really disappointed. Who knew? Every time we go on vacation, we check out the window of a real estate office and we’re like, how much are properties here?

[00:35:26] Deanna: I love it here. I want to invest here. So the fact that’s like a crime now to do in British Columbia is also really disappointing. And personally, I’m like, why aren’t we asking talking to the banks? We’re just bundling all this money into the banks in our mortgage with the extra added interest rates, and none of it’s coming back to the community.

[00:35:48] Deanna: No one’s talking about the, coffers we fill with our business licensing, millions of dollars in business licenses for short term rentals will be lost from our city. And the occupancy taxes that we charge actually are collected here. So hotels go to our destination marketing, the occupancy taxes, and short term rentals actually fund low income housing projects.

[00:36:09] Deanna: So now that money is gone. So yeah, I think the homeowner is just what next? What next? I know

[00:36:18] Mateo: it’s, but it’s interesting though. Cause I, so it, I, for me, from the viewpoint down below, right? Like I get it. So it’s theory versus bad application, right? Especially with the vacancy tax thing. Cause The foreign buyers in BC, that was a real issue for housing. And there’s multiple studies that had shown that, right?

[00:36:38] Mateo: That had more of an impact on housing affordability than short term rentals ever would have. The amount of people that were just scooping up properties, cause that’s BCN. Those properties were empty, but imagine if they would have been able to open those properties up, right? And actually, I don’t know, choose a different way to do it because I get it on one hand, you understand that, all right, this may be a contributing factor, but what you did is clearly not working, right?

[00:37:03] Mateo: So why are you going to exacerbate the situation by making it worse and not changing it and just keeping that happening? So I, yeah.

[00:37:12] Deanna: Yeah, wild, the solutions that we can all clearly see and while I’m, we’re not in a community where we have like social housing I, that almost feels gross to me, but why leave it on the private sector to provide? And also the properties that are being targeted, like when we’re talking about the Vancouver empty, there’s a lot of empty homes for sure, like mansions and

[00:37:34] Mateo: exactly. Good point, because we’re talking about types, right? We’re not talking about one bedroom condos or things like that. We’re talking about Uber luxury, very nice high end homes that those people were investing in buying. That’s another part of that conversation too, right?

[00:37:48] Deanna: And that’s not an affordable house to rent out, but we’re not.

[00:37:51] Mateo: right?

[00:37:53] Deanna: We’re not developing or building actually like in our city, the real need here is for three bedrooms. So all these condos are irrelevant. We actually need three bedroom homes for families. So we do have some initiatives locally that are working on that, but they’re so insanely expensive to build, to fund and finance.

[00:38:10] Deanna: That’s just not going to happen. Yeah I feel like the government needs to put some more incentives and some controls on, again, what financing costs are. I think it’s absolutely atrocious just how we’ve just left it to the institutions to dictate.

[00:38:23] Mateo: Hybrids, look, the reality is hybrids, right? And what we were speaking about earlier is partnerships, right? And John gets tired of me talking about it all the time because I’m always talking about partnerships. But that’s the path. It’s, you have incredibly, you have these business entities and you have lots of ingenuity and lots of ideas that are good in theory, but if you took the power of public private partnerships, what we call them here, those work.

[00:38:49] Mateo: Like when done right and actually done in, in, in a space where people come together and can actually, work out a solution that’s flexible and grows and can change. Those are the things that work, but we, we want to put it on one or the other. Ah, the government’s got to fix it. Okay, we see where that’s ended up.

[00:39:06] Mateo: Private interest is not going to do it by themselves. We just, they’re not going to self regulate themselves into doing this. So they do need that nudge. It seems to me, in my, Mateo’s opinion, is those hybrid, solutions should be where most people’s energies should be funneled because it has the greatest chance of success.

[00:39:24] Deanna: Yeah, I agree. I agree. I think there’s incentives that the government can provide instead of punishment with these taxes. Why aren’t there incentives to help us, cover some costs in order to convert our units back? Because for some people that are financing on their properties, like a lot of people in my portfolio are cash buyers.

[00:39:41] Deanna: And if there was an incentive of a few thousand dollars and a break on property tax or whatever, It might push them over the edge to, to move in that direction and take just a few thousand dollar loss instead of a massive loss.

[00:39:56] Mateo: Yeah.

[00:39:57] Deanna: that’s not offered at all. I actually, I did see that in Florence. In Florence, Italy, they were offering incentives to, I think it was like a three year tax break, property tax break, in order to convert your short term into a long term.

[00:40:09] Deanna: And I thought, genius! Genius, why aren’t we taking a note from their book?

[00:40:13] John: What’s next specifically for your timeline in BC?

[00:40:19] Deanna: May 1st is when the Local Government Act will be written into law where all of the units that were legal, non conforming, short term rentals will be removed, that allowance will be removed from the legislation. May 1st is like D Day. And then next up is in the late 2024 is when Airbnb and other platforms, including like my website Classified Ads, any platform where you can advertise a short term rental will be required to publish the provincial registration number along with your business license if your city requires it.

[00:40:56] Deanna: Otherwise, the platform will have to Take your listing down. So they’re giving the platforms a little bit of time to get those systems in place. And I don’t know what the fines will be for platforms, including my own like direct book website. I don’t even know how I’m going to advertise my midterm rentals and versus short ’cause of the same property.

[00:41:15] Deanna: But in Quebec, the penalty for the platforms is a hundred thousand dollars fine. , they’re fining owners $3,000 a day for posting. Illegal rental without those numbers and then platforms that the number is to be decided.

[00:41:31] John: So that’s It’s a pretty of all, yeah, that’s super insane.

[00:41:34] John: what can be done between now and May 1st and what exactly are you trying to do? What’s next there?

[00:41:41] Deanna: So there’s a few things that are being talked on the DL. But the first one is the legal fund. That is, I think the paperwork will be submitted by April. The goal is to get the courts to agree that the legislation is incorrect and needs some revision or whatever to have a stay so that we can continue to operate through the season.

[00:42:00] Deanna: We also like 50 percent of the globe. This is an election year. So it’s an election year here for Canada. So a lot of people are hanging on to the hope that in October we’ll perhaps have a government change. There’s one party in particular who’s taken a somewhat of a step back. The other parties haven’t said anything yet, but I’m sure it’ll come up.

[00:42:18] Deanna: And then, like on a grassroots level, a lot of people are talking about resisting and overwhelming their resources by continuing to operate. Again, with platforms like Google. Airbnb or Vrbo advertising on your behalf. If they pull the plug on you, you need to make sure that you have a way to get your property in front of people.

[00:42:38] Deanna: So there’s some talk about that, but it’s super scary for people. A $3,000 fine, even if they only fine you for one day, can hurt a lot of independent self managed homeowners. So yeah, there’s, I would say like 50 percent of the people that I’ve heard from are mumbling who cares?

[00:42:53] Deanna: Let’s just see, they can’t catch us all.

[00:42:56] Mateo: That’s the other part too. So again, like that was my next question is enforcement cause enacting these things is one thing. And we went through this here in Atlanta, they enforced horrible regulation that they can’t enforce. And they couldn’t enforce. And, again, thank God, because it gave us the ability to actually circle back and come to the table and that was the stay, right? Like for us to be able to work through things. Cause, It’s all fun and games until you get that check in the mail and, operating out of fear, or you get that, that invoice or whatever they’re going to do, but is it enforceable across the board? Are they going to be able to enforce it?

[00:43:31] Mateo: And

[00:43:32] Deanna: I’ve had some conversations and the reason why the province stepped in is the cities were having a challenge enforcing it, so usually what the city will do is they’ll fine you, and before the fines were $500 but they wouldn’t take you to court to collect a bylaw infraction is different.

[00:43:47] Deanna: Just that. I don’t believe here in Canada you can actually do much until the city says, okay, $10,000 is when we’ll start to pursue legal avenues to collect. And I do recall an individual, and I’m not even sure why he was getting fines, I think he just didn’t have a license because he was in a building that was permitted to do short term rental.

[00:44:05] Deanna: So $10,000 in fines. And the city lost the case, so they weren’t really pursuing. It’s a lot of work, right? And their resources. So now they’re a very reactive approach currently. So we have one and a half file officers dedicated to this. And with every complaint submitted, they are, they have to investigate.

[00:44:27] Deanna: So they are using host compliance, a piece of software to hunt us down. But there are a lot of ways, obviously con, they do hunt.

[00:44:35] Mateo: I know. I know that’s the

[00:44:37] Deanna: It’s ridiculous, but it’s very easy to get away with it in a condo building. How, if your name isn’t on the, they can’t match the title records if your unit number isn’t advertised anyways.

[00:44:47] Deanna: In Vancouver, they’re actually spending resources and booking confirmed reservations.

[00:44:54] Deanna: To get To catch you.

[00:44:57] John: it’s

[00:44:57] John: A predator, but to catch the,

[00:44:59] Deanna: Yeah, but I think that would be an absolute waste of resources. So the province, yeah.

[00:45:04] Mateo: hundred percent.

[00:45:05] Deanna: The province is leaving, still the enforcement to the cities, which they don’t have the resources, but they will have the resources if they do decide to fine you.

[00:45:17] Deanna: And a lot of people don’t understand the law, so they will pay those fines. They will shut down instead of fight back. And obviously we can get them to court faster at $3,000 a day in fines. So

[00:45:28] John: It sounds like you got your hands full. I’m going to go ahead just a little bit in your hands full. I am going to go ahead and take a little bit of time here to promote a, an upcoming Canstays Rental Alliance that both Mateo and I are a part of. The company I work for is a sponsor.

[00:45:44] John: No BS Podcast is a sponsor. We’re going to be in Alberta and Banff April 20th. through the 23rd. I think it’s Saturday, Sunday, Monday, or the actual show. Are we going to see you there?

[00:45:57] Deanna: You will see me there. Yeah. BAMF it’s so beautiful.

[00:46:02] John: Never been. I’m very much looking forward to it. But for those of you listening, there’s going to be government representation from every, province and so this is a chance for you to go ahead and get in front of people that are actual decision makers.

[00:46:19] John: Maybe it’s an opportunity to set yourself up as, hey, I’m an industry pro in this province. I’m from wherever. This is an opportunity for those of you that a week and a half after this show happens, there’s going to be a huge vote in British Columbia and potentially, not to be gloom and doom, it’s going screw you for a little bit, right?

[00:46:41] John: And so it’s important, and this is an open invite for everyone that’s listening to go ahead and show up at the CanStays Rental Alliance. It’s an investment you’re going to get in front of people that are smart, that give a shit about the short term rental industry, that, that care about your well being and to have your voice heard.

[00:46:59] Mateo: And come out because one of the things that we’ve learned from Catherine in Canada, unlike here in the States, like change can happen quickly in terms of what she said in terms of political cycles. And, again, it’s about having your voice be a part of the conversation and I believe more.

[00:47:16] Mateo: of the, right voices, the people who are coming in the spirit of education and partnership and really, wanting to have a conversation rooted not in politics, but in how do we get this to work better? How do we create a

[00:47:31] John: in camaraderie, rooted in camaraderie, right?

[00:47:34] Deanna: This is such a unique event as well to have the delegates represented for Americans, Canadians doesn’t matter to understand, like to hear and speak with these people, see that they’re human, see how they operate, how they like to be approached. I learned so much about politics in this whole process and how they operate and where they get their information from.

[00:47:55] Deanna: And I think even for our American listeners to come up to Canada, it is. So affordable, I think you get like six, what do you get? Like a dollar 40 for every dollar you spent here and the Fairmont where the event is. It’s beautiful. Absolutely beautiful. Five star. I highly

[00:48:12] John: Yeah. We’ll have a little fun too. There’ll be some fun to be had.

[00:48:16] Deanna: . Yeah. Super unique event. Like definitely one of its kind in the STR space to bring these delegates in. I love that.

[00:48:24] John: Cool. Thank you so much for joining us. We’re really excited to, to first of all, we wish you the best of luck and everyone in BC the best of luck. And we’re sending all our positive, good vibes your way. And whatever we can do as a, a podcast or just as an organization to help you do not be a stranger.

[00:48:41] John: Reach out to us. We, our voice is as big or not big as it is. We’re here to help. But a couple more things. if you listen to and you like what you hear. Give us a give us a listen, give us a, leave a review. If you’re watching on

[00:48:55] John: YouTube, subscribe, hit that like button, do what you do.

[00:48:59] Mateo: notification button as well, please.

[00:49:02] John: and thanks so much for joining us. We appreciate you.

[00:49:05] Mateo: thank you.