Council receives report on future of STA licensing program

County of Prince Edward STA map as of Jan. 13. ( screengrap)



Later this spring a motion that will guide the County of Prince Edward’s Short Term Accommodation licensing program will come before council.

But on Thursday, council and the public got a look at what some of the parameters of a licensing program will look like.

A year ago, Prince Edward County Council instructed staff to study and prepare a report on the effects of short-term accommodations (STAs) and the municipal short-term licensing program on affordable housing and the community. The results of this study were presented to council by way of a staff report during the March 10th Committee of the Whole Meeting.

Professor David Wachsmuth.
(McGill University)

The study in question was conducted by Dr. David Wachsmuth, an associate professor at McGill University and Canada Research Chair in Urban Governance. Wachsmuth is generally regarded as one of North America’s top experts in the study of STAs.

The study examined the current STA market, the impact of that market on the County’s housing and rent prices, the impact of the licensing program on the STA industry, and policy recommendations based on these factors.

According to the staff report, the study contained detailed data including every home sale conducted in the County from January 2016 to September 2021, the licensing registry of every licensed STA in the County (provided by the municipality), affordable housing data provided by the Prince Edward County Affordable Housing Corporation, etc.

The study found 92.9 per cent of STAs in the County to be whole-home, as opposed to owner occupied. As well, the top ten per cent of STA hosts-most of who are reported to have more than one STA-account for 50 per cent of all revenue earned by the STA industry. The study also found a direct correlation between housing affordability and STA activity in the region.

“In terms of the affect 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),” wrote Noah Lister Stevens, Program Advisor for the municipality. “Total home sales have risen commensurately, nearly tripling from 2019-2021. 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.”

Finally, another important finding of the study was that between 2019 and 2021 there was an overall spike of 40 per cent in daily revenues from STAs while there was a reduction in STAs of 38 per cent.

“Properties used as full-time STAs and properties used as second homes are two sides of the same coin: a rise in sales of second homes means fewer homes available to use as STAs, which means less competition for STA nightly rentals, and higher prices per night a result,” noted Lister-Stevens.

Given the findings of the report and the inferences therein, staff made the following recommendations to council: Make mandatory the display of STA license numbers on any advertisement for a STA in Prince Edward County Remove several provisions in the Comprehensive ZBL concerning STAs, and place them into the STA licensing by-law Disallow STAs from operating in all R3 zones and all R4 zones Reduce length of time to reply/conform to requests for compliance Require stronger evidence of “legal non-conforming use” that owners operated as an STA before by-law amendments were in place, such as a signed affidavit Use a “Cost Acknowledgment Agreement” in appeals process in order to recoup the cost of staff time and create a formal appeal process including an STA Appeal Form similar to forms used in Planning appeals Several deputations were made to council about this issue.

President and Chair of the Licensed Short-Term Accommodators of Prince Edward County (LSTAPEC) Davelle Morrison.

Speaking on behalf of the Licensed Short-Term Accommodators of Prince Edward County (LSTAPEC) was Davelle Morrison, President and Chair of LSTAPEC, real estate agent and owner of several STAs as well as long-term rentals.

The crux of Morrison’s argument hinged on the notion that reducing STAs would not improve long-term housing prospects in the County. She argued, among other things, that many STA properties are three season dwellings that, without considerable renovations, would be uninhabitable during the winter. She also noted the high cost that could be attached to STAs turned long-term rentals.

“After mortgage payments and property taxes are taken into consideration, the monthly rental would be considered unaffordable,” said Morrison. In her deputation, Morrison also stressed that all tourism-based businesses are intertwined and should STAs dwindle in number, so too will the many restaurants, cafes and other tourist-based businesses that have opened to serve an increase in visitors.

Murray Lupenette, local Metro Franchisee also spoke to council about the benefit tourists-and by extension STAs-have for the local business community. “In August 2017 I employed 45 people. I currently have 106 employers and am continuing to hire,” he said. “At the height of the tourist season, we enjoy a 40 per cent increase in business.”

Lupenette also noted the summer months have been a prime time to host important fundraisers, given the increase in people.

With the report from staff regarding STAs on the table for discussion, Councillor Kate MacNaughton voiced an amendment that would focus on reimagining the use of STAs in the future as opposed to penalizing those already in operation.

MacNaughton’s amendment would restrict future licenses to natural persons only (i.e. no corporations buying up multiple properties for use as STAs) and would restrict license holders to a cap of one whole-home STA license per individual with exemptions for current existing multiple whole-home license holders.

She also proposed exploring and establishing a cap of zero for the hole-home STA program with a few exceptions, including cottages and cabins.

Furthermore, MacNaughton proposed restricting future licenses to properties that are primary residences and setting up a “reduced cost and regulatory requirements” option for those who want to casually host for up to 14 days per year.

“I don’t believe the changes I’m proposing involve any economic disruption to industries in the community,” said MacNaughton. “We will simply tailor the program going forward to the community needs.”

Councillor John Hirsch thanked MacNaughton for taking the initiative to articulate what he believes many councillors are feeling.

“I’d like to commend MacNaughton for taking the initiative of putting into words what many of us are thinking, which is that many of us believe this council wants to go further than staff have gone in trying to control the STA situation,” said Hirsch.

Councillor St. Jean expressed concern that restricting future whole-home STAs might further commodify those in existence thereby increasing their selling cost and, ultimately, exacerbating the affordable housing problem.

“My concern is, are we now increasing the value…when you’re saying no one else can have one. When you make something rare, you increase the value of it,” he argued.

The amendment proposed by MacNaughton was accepted by council. The report, along with recommendations, is expected to be come back before council for a final decision in May at the earliest.