The City of Charlottetown is echoing the P.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 said it's issued 130 operating licenses to home and apartment owners in Charlottetown, most of them since the start of 2017.

Charlottetown's chief administrative officer estimates there are more. "Some 400 homes we understand are being used for Airbnb," said Peter Kelly.

Vacancy rate below 1%

Kelly says 'some 400 homes we understand are being used for Airbnb.' (Steve Bruce/CBC)

"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, and Charlottetown'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 their home from a long-term rental to a vacation rental.

'Money was better. It's a business decision … and our guests were very easy to deal with,' says Taylor. (Steve Bruce/CBC)

"We made more money in the one season of renting on Airbnb and VRBO, 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

Lund says she wants to see both levels of government examine how other jurisdictions have dealt with the rise of short-term rentals, before making any moves. (Steve Bruce/CBC)

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

Tourism Minister Chris Palmer said that responsibility largely rests with 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'

'We license tourism operations. But we don't determine the usage of [properties], says Palmer. (Steve Bruce/CBC)

Kelly said as it stands, city bylaws are "silent" on the issue of vacation rentals. In its draft affordable housing plan, the city offers just one recommendation to deal with the trend, which puts the onus on the provincial government to act.

It suggests the 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. "That may pull some of those back from being used for Airbnb, and put back into the housing stock."

Other jurisdictions have tackled the issue

Realtors say the city has a short supply of houses for sale, and Charlottetown's long-term rental vacancy rate has consistently been below 1 per cent. (Steve Bruce/CBC)

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

The Green Party's Lund wants to see both levels of government examine how other 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.

Others have 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."

Palmer said he doesn't support any additional taxes on tourists or operators.

He said the 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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