Rise of vacation rentals part of Charlottetown housing crunch, say city and province

The City of Charlottetown is echoing theP.E.I. government's concerns over the "increasing rate" of tourist rentals popping up, and the impact that's having on the availability of long-term housing in the city.

The city points to the trend in the draft of its new affordable housing plan released this week, just as the province did in its housing action plan unveiled last month.

P.E.I.'s tourism department saidit's issued 130operatinglicenses to home and apartment owners in Charlottetown, most of them since the start of 2017.

Charlottetown's chief administrative officerestimates there are more. "Some 400 homes we understand are being used forAirbnb," said Peter Kelly.

Vacancy rate below 1%

"So that's a large portion of the housing stock that can't be sold or used for long-term rentals, which obviously causes concern for the city in terms of trying to find stability for those needing and wanting that stability."

At the same time, realtors say the city has a short supply of houses for sale, andCharlottetown's long-term rental vacancy rate has consistently been below 1%.

'A business decision'

Those statistics come as no surprise to Mike Taylor.A couple of years ago, he and his wife moved theirhome from a long-term rental to a vacation rental.

"We made more money in the one season of renting onAirbnbandVRBO, than we would've made in long-term rentals in a year, probably double the amount," said Taylor. "Money was better. It's a business decision and our guests were very easy to deal with."

Lynne Lund, the deputy leader of P.E.I.'s Green Party, says since writing a blog post about the housing crunch and the rise of short-term rentals,she's heard multiple stories like Taylor's.

"When you start speaking to landlords about it, and they tell you being in the long-term housing business is more problematic, more of a headache and less lucrative, that's cause for pause in my mind," said Lund."What's to stop another 1000 units from exiting the long-term housing market?"

City and province at odds over responsibility

But while the P.E.I. government acknowledges the trend in its new housing action plan, it has no planto curbit.

Tourism Minister Chris Palmer saidthat responsibility largely restswith the City of Charlottetown.

"We license tourism operations.But we don't determine the usage of [properties]," said Palmer."So in Charlottetown, there are bylaws that specify what type of business can operate where, so we don't regulate that, as the province. The municipality would do that."

'Bylaws are silent'

Kelly saidas it stands,city bylaws are "silent"on the issue of vacationrentals.In itsdraft affordable housing plan, the city offers just one recommendation to deal with the trend, which puts the onus onthe provincial government to act.

It suggeststhe province start reassessing the property value of homes that are making money through short-term rentals, and impose higher commercial property taxes on those homes.

In the city, that would more than double the taxes most residents are currently paying.

"If a home is being used for an Airbnb, obviously it's a commercial venture, and maybe they need to be taxed at a commercial rate," said Kelly. "Thatmay pull some of those back from being used for Airbnb, and put back into the housing stock."

Other jurisdictions have tackled the issue

Kelly saidcity officials will discuss the idea withthe P.E.I. government, before city council votes on the draft housing plan.

The Green Party's Lund wants to seeboth levels of government examine howother jurisdictions have dealt with the rise of short-term rentals, before making any moves.

Some municipalities, like Toronto, have placed major restrictions on short-term rentals, including limiting rentals to primary residences.

Othershave imposed occupancy taxes on guests staying at vacation rental homes something Lund thinks P.E.I. should consider.

'No additional burden'

"It's not a tax on the homeowner. It's applied to the renter. So it would be no additional work for the province," said Lund."It would be no additional burden on the homeowner. And it would potentially be a revenue stream that could fund some of the housing the province wants to build."

Palmersaidhe doesn't support any additional taxes on tourists or operators.

He saidthe province will continue to work with the City of Charlottetown to come up with solutions that balance the needs of the tourism industry, and the long-term rental market.

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