Charlottetown short-term rentals should be limited to primary residences, excluding apartments: report

The city of Charlottetown should restrict short-term rentals to the primary residences of those renting out rooms, and specifically exclude apartments, says a new report by the city's Planning and Heritage Department.

The report, which will be submitted to city council and the planning board for their October meetings, says recent public consultations on the subject of short-terms rentals (STRs) showed there was community consensus behind such a policy. (A link to the report appears at the end of this article.)

Housing advocates have long called for more regulations on short-term rentals, arguing they threaten housing affordability in the city by encouraging people to buy up houses to rent out to tourists rather than leaving them available to long-term renters.

The report notes that the number of STR private-home listings in Charlottetown rose 7.9 per cent from September 2018 to the same period the following year. 

Non-compliant

The report says only 265 out of a total 635 short-term rental listings in the city were registered on Tourism P.E.I.'s licensed registry database, meaning that over half the listings in Charlottetown weren't compliant with provincial legislation.

Tourism P.E.I.'s issuing of tourist accommodation licences without ever confirming their approval with the municipality has led to "both confusion and proliferation" of non-compliant STRs in the city, the report goes on to say.

The report recommends that council establish a municipal STR registry linked to its provincial equivalent to ensure both jurisdictions' regulations are adhered to. 

It says the city should consider implementing a bylaw to establish its own licensing requirements, which would then be integrated to the provincial system. 

It also suggests a municipal licensing program could:

• introduce annual licensing fees for STR platforms;
• require hosts to obtain building permits and be approved for occupancy; and
• make specific exemptions for other accommodation providers, such as hotels, motels and cottages.

The report says a separate enforcement strategy for non-compliant STRs should be implemented and should involve the province so that both jurisdictions' regulations are fulfilled.

Commercialized STRs

A total of $8.5 million in revenue was collectively made by 409 private listing hosts in 2019, the report estimates.

The top 10 per cent of hosts earned 47 per cent of all STR revenue on P.E.I., which the report says indicates an "increase in commercialization" of STR activity.

It says commercialized STRs, which are defined as entire-home listings available throughout much of the year, are the "biggest threat" to reducing long-term housing supply. 

"This mass transition through commercialization of long-term dwellings converted to short-term rentals has affected the availability and affordability in the form of gentrification of Charlottetown's housing supply."

Suburban issue too

The report says the highest concentration of non-principal residence STR listings is in the downtown area, but it appears to be expanding to the suburbs as well.

What's more, the report says the STR industry is only becoming more commercialized.

In 2017, principal residence listings were 66.4 per cent of all listings and accounted for 49.6 per cent of all bookings, compared to 59.6 per cent of listings and 40.9 per cent of bookings in 2019.

While COVID-19 has impacted Charlottetown's STR industry and the tourism sector overall, the report says increasing vaccination rates as well as pent-up demand for travel means demand for the rentals will return.

The report said a monitoring program to survey the status of the local STR industry should be established regardless of the regulatory framework council decides to adopt.