5 options for regulating short-term rentals in Charlottetown

Charlottetown's planning staff presented a detailed report of how short-term rentals have been hitting the city's housing market, and how regulations could change that.

Robert Zilke, a community planner with the city, put forward five scenarios for short-term rental regulation. Zilke said planning staff did extensive research to come up with the report.

The planning department looked at existing STR regulations in municipalities across Canada and consulted with David Wachsmuth, a professor with the School of Urban Planning at McGill University, who studies the short-term rental industry.

"We did our homework and hopefully we move forward," Zilke said.

Rapid growth

The study looked at the where STRs are in the city, whether they operated year-round or seasonally, their impact on the housing market and the division between commercial operations and casual home sharers.

The study found that STR listings were growing rapidly in Charlottetown, with a 7.9 per cent increase from 2018 to 2019. On Sept. 1, 2019 it found 635 active STR units in the city, but it judged only 193 of those, about 30 per cent, were units that would otherwise be part of the long-term housing market.

That is still a significant number. CMHC counted 5,952 total rental units in Charlottetown in October 2019. The 1.2 per cent vacancy rate would represent about 71 units. The city estimates the vacancy rate in 2019 without dedicated STRs would have been 2.9 per cent.

In addition to the impact on housing availability, the planning department looked at the impact on cost. It estimated STRs have contributed to a 37.7 per cent increase in rental costs since 2017.

The study found only about 40 per cent of listings were registered with Tourism PEI, as they are required to be.

Five scenarios for regulations

The report laid out five scenarios for regulations, with decreasing degrees of restrictions. The scenarios divide STRs into three categories: principal residences that are apartments, principal residences that aren't apartments and commercial operations.

1. Permit STRs in any principal residence except apartments, with no allowance for commercial STRs.
2. Permit STRs in any principal residence including apartments, with no allowance for commercial STRs.
3. Permit STRs in any principal residence except apartments, with allowance for commercial STRs in zones that would permit a hotel.
4. Permit STRs in any principal residence including apartments, with allowance for commercial STRs in zones that would permit a hotel.
5. Permit STRs in any principal residence including apartments, with allowance for commercial STRs in zones that would permit a hotel and in parts of the downtown.

Zilke described scenario four as the most balanced. The report included projected impacts on housing and tourism for all five scenarios.

Zilke emphasized the report presents draft options, and they are subject to change after public consultation.

It depends on the robust enforcement strategy you have in place to make sure that the regulations are followed and adhered to.— Robert Zilke, community planner

The STR presentation was originally going to be held in a closed-session meeting, but Coun. Greg Rivard said the city's CAO Peter Kelly found out earlier that day — through the city's legal team — that these meetings were to be public, open-sessions.

"So instead of taking it off the agenda, we just dealt with it tonight," Rivard said.

According to Section 119 of the Municipal Government Act, council can close a meeting to the public for reasons such as human resource matters, personal information or commercial information that, if disclosed, would likely be prejudicial to the municipality or parties involved.

Rivard said the city had three or four meetings about short-term rentals prior to Monday night's presentation. 

Public meeting scheduled

Zilke said any of the five scenarios would help to increase Charlottetown's vacancy rate, which currently sits at 1.2 per cent. 

"Any regulatory framework will boost the vacancy rates because as it stands now, it's unregulated," he said.

He said once the city adopts a regulatory bylaw, enforcement will be important.

"It depends on the robust enforcement strategy you have in place to make sure that the regulations are followed and adhered to," he said.

Zilke said the draft recommendations will be presented to the planning board on March 13.

If the draft bylaws are approved, they will then go to council who will vote on whether the bylaws should proceed to public consultation.

Zilke said he encourages the public to look at all five of the draft scenarios and present any concerns they may have. 

"That's the whole purpose of public consultation — is to receive that feedback and so that we can tailor those regulations to the community needs," he said.

The tentative date for the public meeting is March 31. 

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