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Suggested changes to County’s short-term accommodation licensing under review

Suggested changes to Prince Edward County’s short-term accommodations (STA) licencing are under review by municipal staff to create a report for council in May.

Councillor Kate MacNaughton proposed the municipality ban whole-home STAs unless they are seasonal cottages, cabins or grandfathered, and could allow homeowners to use their residences as an STA for a certain number of days per year (number not determined but suggested at 75).

The changes would have no impact on current STA licence holders. MacNaughton noted there is no intention to cut the number of current STAs despite outcry they are contributing to shortages of affordable housing and long-term rentals.

Her proposal seeks future licenses to be restricted to “natural person” owned, not by businesses.

Several members of the Licenced Short-Term Accommodators of Prince Edward County also spoke to council to state that many of the rentals are waterfront, or higher-end homes that would never be rented or sold as affordable housing. A few also spoke to difficulties being a landlord without as many protections as provided by services such as AirBnB.

“Many of the properties are not winterized for long-term rentals. And, after the cost of mortgage, property taxes, the rent that they would have to charge would be highly unaffordable,” stated Davelle Morrison, president of the accommodators group. “The biggest reason that many STA owners won’t do long-term rentals is because they have been burned before by tenants who damage their property or refuse to pay rent for months on end.”

She also pointed to the lack of hotels in the County and stated without STAs, the region will become a day-tripper’s paradise causing problems for restaurants and other businesses.

Councillor John Hirsch noted intention “to make some exemptions for the cottage industry which we really didn’t have in place before. It’s intended to make an exemption for folks who want to rent out their home for a few weeks a year when they’re away and we didn’t have that capability before. But, in essence, it will be capping future whole home STA creation.”

Recommendations proposed by staff also include mandatory display of license numbers on advertising, not allowing STAs in zones R3 and R4 that allow the newly-approved reduced lot sizes, and reduced time owners can be in breach of bylaws.

The report from staff also suggests seeking to restrict STAs enough to allow residents the opportunity to earn an income from the STA market while increasing the stock of multi-family units and housing which is most suitable to attainable long-term rentals is protected.

Also included:
– Stronger evidence of “legal non-conforming use” that owners operated as a short-term accommodation in the form of a signed affidavit;

– A ‘cost acknowledgement agreement’ to use in the appeals process to recuperate the cost of staff time and an appeal form similar to those used in planning appeals.

– Reduced length of time STA owners can be in breach of bylaws to two notices in four months, from three notices in six months.

The potential changes are to be available for public feedback before being presented to council for final approval.

The staff review of the changes is to come before council in May. Staff also suggest the moratorium on whole home STAs be lifted when the amended bylaws are passed.

Last spring, council directed staff to study the effects of STAs and the licencing program on affordable housing the the community, as well as recommendations of potential improvements.

In November, council heard results of a study by Dr. David Wachsmuth, an associate professor at McGill and Canada Research chair in urban governance, considered one of North America’s experts in the study of STAs.

That study recommended a series of smaller best practices, notably limiting the impact of grandfathering as much as possible; prioritizing owner-occupied STAs, and making mandatory on all STA advertisements, the display of the operator’s license number.

The study indicates more multi-family home development is required, not only to increase housing stock, but as a type better suited to local demand and less likely to be diverted to an STA or second home.

Council has the discretion, under the Municipal Act, to attach new conditions to existing STA licenses – that also apply to grandfathered properties. While licenses do not transfer with the sale of a property, legal non-conforming status does, and will remain attached to the property indefinitely so long as the owner continues the non-conforming use in question.

The study found STAs are overwhelmingly whole-home (92.9 per cent) as opposed to owner-occupied and are concentrated in settlement areas, with Bloomfield in particular, having nearly one-third of its residences used as part- or full-time STAs.

The top 10 per cent of STA hosts, most of whom own more than one STA, account for 50 per cent of all revenue earned by the STA industry and 1/8th of revenue earned by the industry goes to individuals not residents in the County.

The study found that on average, 490 STA listings are active every day in the County, with an average price of $280/day ($138,000 per day), split between an average of 310 hosts, or $440 per host.

Active listings are those that are reserved or available for booking on STA rental platforms, and excludes listings that are visible but blocked off by the host – considered to be inactive listings.

STA nightly prices have spiked more than 40 per cent in daily revenue from 2019 to 2021 since the start of the pandemic, as the total number of STAs has also fallen by nearly that same amount (38.3 per cent).

This market behaviour is, according to the study, “among the lowest relative number of active STA listings and STA reservations… but by far the largest spike in nightly prices [in Canada].”

Wachsmuth stated license compliance is relatively high at an estimated 67.5 per cent, contrasting that Montreal’s STA compliance rate is about five per cent.

In terms of the effect on the housing market, average housing prices in Prince Edward County have skyrocketed by 400 per cent since 2008 – almost 200 per cent of which came between 2008 and 2018 ($205,000 to $395,000), and the remaining amount from 2018 to 2021 (up to an all-time high of $861,000 for an average home sale in December 2020).

Total home sales have risen commensurately, nearly tripling from 2019-2021. The study confirms this has “induced a strong affordability gap between the average income of County residents and housing and rental prices: a median affordability gap of $47,760/year for homeowners, and $318/month for renters in Picton.”

Finally, the study found that of the home sales made in 2016-2017, roughly half of them can be attributed directly or indirectly to new STA activity, but that number fell by half (23.2 per cent) in 2020.

 

 

 

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  1. Mike Rodgers says:

    The report has been submitted by educated experts, now council follow the what is stated.

  2. Dennis Fox says:

    I have never considered STA’s to be the answer for affordable housing. Instead, let’s consider them to be what they are – rental units in single family houses in single family neighbourhoods. They are a way for homeowners(many absentee landlords) to make easy money – at the expense of surrounding homeowners. Since they are businesses, they should be taxed as such and that those visiting them should pay an accommodation tax too! The number of parking spaces are determined by how many cars can fit on the home’s “normal” driveway – any on street parking will either be fined and towed or charged to the business at the rate of $100/day per car. If these people who own such property consider themselves to be contributing business people – then lets see if they want to pay their own way for a change. Any business that becomes a source of regular complaints will lose their license.

  3. Susan says:

    I agree, stop the war on STAs. They provide income to so many businesses and their destruction is not the answer to affordable housing.Makes no sense to build a tourist destination over 20 years and then tear it all down. I hope this lame duck Council can be honed in.

  4. Dan says:

    For 12 years my family and I have operated Sta’s , and live in PEC. We always hire local contractors, shop local. Give back to our community, at ever opportunity. Never had issues with neighbor’s and our guests.
    The past 3 years we have seen a drastic change in the community, towards our business.
    AJ is right, Sta’s have become political fodder for some.

  5. SS says:

    Well said AJ.

  6. angela says:

    Although there is much chest-thumping in relation to how tourism and the STA’s have saved Prince Edward County we did manage without them. The STA’s have destroyed neighbourhoods and become get rich quick schemes for investors who do not live locally. It’s all about money and catering to a privileged class who can afford to spend megabucks to holiday in luxury homes. Kind of a slap in the face to many locals who have to worry about how to put food on the table and cannot find anywhere affordable to rent. Time to regulate the STA’s. They are not the saviours of our county.

  7. AJ says:

    It seems that the STA bashing is very effective campaign platform for election purposes. How many of the complaints pole holder in here employ 5 people year round and transfer 100,000 a year directly to the community?

    Well we do we operate a STA business and we live here year round. We provide high quality service and we monitor all our properties everyday of the high season. We put heads on beds that go to the wineries, restaurants and shops. Affordable housing is in crisis all over the world. Council is stretching the elastic and we will all go away and they will have a county as poor as when the canneries left.
    Please stop the war on STA.

  8. Chuck says:

    Small municipalities with unreasonably large Councils were not elected to solve market housing prices. They do not have the leverage or quite frankly the know how. Let’s try getting back to basics ie taxes, roads, severances, garbage. Time would be much better spent.

  9. SS says:

    Reading the comments here, seems to me we have two themes.

    1) Undesirable behaviour – both on the part of visitors and property owners; and

    2) Affordable housing.

    Neither council nor anyone else can create policies that will address both of these issues at the same time.

    STAs may be a factor affecting affordable housing, but as others have said already here, affordable housing is difficult to find anywhere in the first world. Fixing that is going to take a lot more than any STA policy changes.

    As far as undesirable behaviour goes, we have three parts to that:

    a) Renters (other than STA; say, for yearly leases)

    b) Short term visitors (say, from day trips up to one season at most per year)

    c) Homeowners

    Undesirable behaviour by renters is a risk that landlords have always taken and always will. County decisions will not change that, regardless.

    Undesirable behaviour by short term visitors is a risk that any residents of a resort area have always had, and always will. County decisions won’t affect that either (except for possibly looking the other way when violations occur).

    Undesirable behaviour by homeowners is surely not limited to their actions as landlords (for any rental length of time).

    The existing County by-laws ought to be sufficient to address most of these items, IF THE BY-LAWS ARE ENFORCED. As a resident, I have seen properties that I cannot believe are not obviously in contravention of at least one and perhaps multiple by-laws. For YEARS. And no action is taken by the County.

    More rules that are not enforced are not the answer. If the County is unprepared to enforce existing by-laws, then why add more?

  10. Dennis Fox says:

    Rules are needed to protect those who live here full time and pay taxes here – to build PEC as a community. Rules should not be made to benefit those who only want to visit here and for those who only want to make money based on the number of visitors they can attract. Perhaps the municipality needs to re-examine the role they play in tourism and at what cost?

  11. MI says:

    First, let’s not even suggest anyone’s opinions represents the majority of taxpayers in our community.
    Council, please avoid the debacle of over-reaction like what we experienced in the handling of Lake on the Mountain. There are plenty of property owners operating as an STA until they can retire, or so their children can have a place in the County. Every community in Ontario has experienced this hyperinflation of house prices. It is ridiculous to suggest that it is solely a result of STAS.
    Council, please take a rational and measured approach to this.Limit the number of bedrooms to parking spaces. Like perhaps the biggest problems are with the unlicensed rentals. Surely you have enough staff with computers to know who they are?
    And as many have already stated, there is not nearly enough accommodations for visitors to the County. Our well paid marketing and tourism staff must know this. Manage these issues carefully.

  12. Don says:

    The future of STAs in the County is a highly contentious issue. Council’s decision on this could impact many neighborhoods, individual homes, and businesses. Rather than depend only on the opinions of those of us who write to forums like this, perhaps Council should get broader public input from a plebiscite in the upcoming election which could provide real guidance on questions such as whole-home STAs, taxation, licensing, etc. It is time for our elected officials to listen to the people who live in the County but first they have to give them all a place to speak.

  13. Mihaly says:

    Is this actually going to do anything other than take away property rights? Thought not.

  14. Dan says:

    I agree , these policies will only hurt local business and the 2nd biggest industry in PEC will just be a distant memory. And the economy goes with it. Setting us back 30 years.

  15. Dennis Fox says:

    All property owners have the right to enjoy their property – BUT this does not mean that you can do whatever you want to your property. This is why ZONING by-laws and definitions have been used to clarify what uses are permitted.

    If a person buys a home zoned for single family residential, then it is a fair expectation that is what the surrounding homes will also be. For someone to buy a property for the purpose of using it as a short term rental and then not even live there, violates the zoning. For me, absentee landlords and their clients should not be allowed to function – either apply for a zoning change and allow the surrounding full time residents to have input into the application to either approve it or deny it. Frankly, I believe our Council is being far too lenient with STAs.

  16. Don Mayne says:

    It is not fair to residential communities to have allowed residences be converted to exclusive business use such as whole-home STAs. This does not make good neighbours, good communities or healthy year-round economy. It has eroded the very essence of Prince Edward County.

    B&B’s were fine where it was the owner’s principal residence. But the disappearance of residential nature of Wellington, Bloomfield and Picton is not what the residents want, never anticipated and has become tragic. Let’s pass bylaws that guarantee that owners occupy the homes of PEC and responsibly manage the tourist traffic within their home.

    This is not a case of either-or. The never-ending bachelorette partygoers, noise-makers, weekend drunks are not the only viable tourists. Instead, we should require owner occupied B&B or AirBnB establishments where we will attract a less disruptive tourist that will enjoy the available ambiance that the County can offer while the owner serves as a responsible resident. Absentee owners do not serve that role. We can have both worlds if the principal residence requirement is brought into effect.

  17. Bruce Nicholson says:

    STA’s have contributed significantly to the supply of affordable housing. Let’s not kid ourselves. Over the years, I have seen lower priced housing (aka “affordable”) being purchased and converted into STA’s. This inventory has been removed from the market and new construction is not replenishing that inventory. It is late in the game but Counsel must seek solutions to control and limit whole-house STA’s.

  18. Susan says:

    I agree, this is unnessary infringement upon property rights and will have no affect with so called affordable housing. If you want affordable or subsidized housing get working with the Province and Feds in doing so. Meddling here and there in an economy we encouraged does nothing and also isn’t fooling anyone.

  19. John says:

    Everyone has the right to the use and enjoyment of property and the right not to be deprived thereof except in accordance with law and for reasonable compensation. Councils proposal to limit STAs certainly impacts value and thus one’s enjoyment of their property. Isn’t it time we stop this council from taking our fundamental rights.

  20. Dennis Fox says:

    The above map shows clearly the extent of this problem – and it is a problem. It is a problem that many created – starting around 25 years ago. People wanted newcomers to help carry the tax load (sound familiar?) – homes and farm land were happily sold to make room for the new people and their money. The Council of the day (supported by voters) promoted this community as a place to retire to and a tourists hot spot. They were very successful – to a point.

    Council did not think of trying to make money for this brave new world – instead they let it grow and grow, and are only now getting the idea that perhaps the full time residents need help with the costs and need relief from the onslaught of tourists.

    When I look at the map I see all those people and homes making money out of a home that was meant for one working family and taxed as such. I no longer see neighbourhoods and communities where people know each other and half a sense for the common good. Instead, I see disjointed neighbourhoods that are constantly changing over, made up with a transient population who only look at the real estate value – once it goes up high enough – then away they go and the next owner moves in.

    The only way I see of settling things down is to create a tax structure where real estate sales include a municipal tax and the STA permit has a time limit and it is costly, plus an accommodation tax. All money collected by the municipal government goes into the municipal pot where council decides how the money is used to help locals.

  21. Carl Canmore says:

    The combination of retirees & the pandemic have driven up house prices here in the County & just about everywhere which means rents are up as well and those prices won’t go down no matter how much this Council tries to tamper with market forces.

    Council can start by losing the myth of affordable housing as that train left the station when the pandemic started as now there is no such thing a affordable housing, the proper term should be subsidized housing as any rent offered in a dwelling that is lower then the market rate will be covered by the taxpayer which means there will be a means test for applicants as is done in co-op housing.

    The B & B proposals are just window dressing as Council wants to be seen to be doing something in time for the next election

  22. Susan says:

    If you ban which is a drastic action, where will people stay over at so as to attend are local businesses? You could kill our economy and damage the tax base. Careful what you wish for.

  23. Dave says:

    Banning STAs only hurts local businesses such as wineries and restaurants so do you want to hurt these as well?
    And as stated these sta properties if not allowed to operate will do nothing to aleviate the low income housing problem.

  24. Elliot says:

    Ban all short term accommodations

  25. Dan says:

    Ms. Morrison makes a great point: that renting a home Is a costly endeavor that comes with financial risk.

    That said, It is most certainly not councils role to enable to regime that allows long term rentals to be avoided for the purpose of STAs. If your rental is a 3 season rental, that’s nobody’s fault but your own.

    STAs are the primary driver of rents and prices that are completely unsustainable. Council should ban all non bed and breakfast STAs in the county.

  26. Chuck says:

    Council is under the illusion that the more they cage in STAs that they will solve the affordable housing crisis. That is folly. Most STAs are very valuable properties and will never become low cost rentals. They want to be careful they do not seriously harm our economy.

  27. Mike Rodgers says:

    The term many is used quite loosely, we all know that the vast majority of STA units are whole house in side town and village limits. This proposal does nothing short term. It would take years to see an effect.
    Let’s ban STAs and go with a Bed and Breakfast format. Council should include it as a voting item in the next municipal election which is just around the corner. Then, at least the taxpayers’ wishes will be heard and acted on.

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