Tourism Kelowna won’t be getting money from the affordable housing fund

Tourism Kelowna won't be able to tap into the city's fund for buying land for affordable housing this year.

Created in 2018, it’s called the Online Accommodation Platform tax and is similar to the hotel room tax except that it’s paid to the city instead of the province. All the money taken in so far has gone into the land fund.

Tourism Kelowna set its budget at almost $5 million for this year, with close to $3 million expected to come from the provincial hotel tax. It’s now projecting that to drop to about $1 million because COVID-19 has devastated the accommodation industry.

So, it approached the city for help. But staff, in a report going to council Monday, say there's not much the city can do.

The city’s short term rental tax is fixed by provincial regulations that cannot be changed so all that money has to go into the land fund and can’t be diverted to help Tourism Kelowna.

But the rules on where the money goes can be changed each year so staff is recommending that half of the tax go to Tourism Kelowna in 2021, but for that one year only.

Given that the city collected almost $500,000 in 2019 from short term rentals, that means Tourism Kelowna could get an extra $250,000 next year.

The tax didn’t bring in any money during the first quarter of 2020.

The city does pay about $344,000 in base funding to Tourism Kelowna, making monthly payments.

Staff is recommending the city help out by making one lump-sum payment for the rest of the year to provide some short term bridge funding for Tourism Kelowna. That $143,500 has no impact on the city’s budget since it was already allocated.

The report does not say how much money Tourism Kelowna was asking for or whether other sources of funding could be tapped.

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