Home truths, Part 2: Prince Edward County’s Airbnb problem

Prices are rising. Houses and apartments are becoming short-term rentals. Here’s why it’s getting harder to find a place to live in the county — and what locals are doing about it
By David Rockne Corrigan - Published on Aug 06, 2019
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Prince Edward County will be introducing new regulations governing short-term rentals at the end of the year.

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This is Part 2 of a five-part TVO.org series looking at how Ontario’s affordable-housing crisis is playing out beyond the GTA. Click here for Part 1; watch for Part 3 on Wednesday. 

PICTON — Zainab Mnyetto was thrilled when she got a job in Prince Edward County last summer. Then she started an apartment search.  

“I could not find a place to stay,” says Mnyetto, a Queen’s University economics student. “They were either too far from downtown, or too expensive, or they were Airbnbs that would only allow me to rent on weekdays.” 

It was an eye-opening experience for Mnyetto, both personally and professionally. After all, the job she’d accepted was as a housing adviser, researching affordable-housing solutions for the local economic-development office. 

She did eventually find a place to live — she roomed in her colleague’s parents’ spare bedroom at a “family and friends” rate — but not everyone is so lucky.  

Over the past 15 years, Prince Edward County has become a popular destination for day-tripping wine lovers and vacationers. The area’s first winery opened in 2001, and the region now hosts roughly 650,000 visitors per year; those visitors spend more than $115 million. At the same time, the county has begun to attract more retirees and city-dwelling professionals looking for cheaper housing and a more relaxed lifestyle.  

The county’s boom period, and the simultaneous rise in popularity of short-term rental services such as Airbnb, has created a supercharged housing market. Real-estate prices are climbing, pushing rental costs up with them. The median house price in the county jumped from $205,000 in 2008 to $395,000 in 2018, wildly outpacing nearby Belleville and Quinte West. Meanwhile, according to the County Foundation — a community-building group that identifies and addresses local challenges and opportunities — rental costs are increasing 40 per cent faster than household incomes. According to the Canadian Mortgage and Housing Corporation, "In Canada, housing is considered ‘affordable’ if it costs less than 30% of a household’s before-tax income.” Today, nearly half of all renters in Prince Edward County are paying more than that. To make matters worse, the number of total rental units in the county has actually dropped 10 per cent since 2011, the result, experts and residents say, of rental units being converted into unlicenced short-term accommodations. 

The county also has a hot labour market, partly driven by the seasonal agriculture and tourism workers who flock there in the summer. But, like Mnyetto, they often have difficulty finding a place to live.  

“A lot of businesses are thriving in the summer season,” says Trevor Brookes, a social finance specialist with the Prince Edward/Lennox & Addington Community Futures Development Corporation, a federal program that offers resources and advice to local entrepreneurs. “And there are a lot of jobs. There’s a need for workers, but workers can’t afford to live here. We need to find an equilibrium point, and, right now, that is very difficult.” 

It comes down to supply and demand, says Treat Hull, a real-estate broker and former councillor who’s now an affordable-housing advocate. “We have this phenomenon — and, to be honest, I’m part of it — of baby boomers in Toronto either retiring or just slowing down and coming to the county,” he says. “So you have an influx of relatively affluent, successful people from Toronto for whom county prices are very modest. That demand has driven up house prices incredibly.” 

Ten years ago, he says, 78 per cent of homes were priced under $300,000. Today, that figure is 18 per cent.  

But, in the county, if you want to talk housing, you have to talk about short-term rentals. According to AirDNA, which tracks short-term rental data, there are currently more than 1,300 active rental listings in Prince Edward County. More than 1,100 of those are entire homes. “The growth of Airbnb cannibalized the market for more modest homes,” says Hull. “This is a community with a little over 10,000 total dwelling units. Imagine Ottawa or Toronto with one-tenth of its dwelling units being withdrawn from the marketplace.” 

The issue has dominated the local conversation for years. A survey of 1,400 residents in May 2018 found that 55 per cent of them had “experienced or observed” the displacement of affordable housing due to short-term accommodations. (According to the Airbnb website, visitors looking for accommodation can rent rooms in a shuttered elementary school.)  

After two years of debate among residents and at council, the county will be introducing new regulations governing Short Term Accommodations at the end of this year. The regulations will require individual STA operators to get a licence from the county — if they don’t, they’ll face fines that, for repeat offenders, could run into the thousands of dollars. Properties that were being used as short-term rentals prior to October 2018 will be “grandfathered” in to the new system. No more than 15 per cent of “dwelling units” in a given area will be allowed to operate as STAs without also housing permanent residents. Properties will also need to be inspected before getting a licence and will require regular inspections. 

Barry Davidson, a local condo developer, is watching closely. He hopes that the newly established Prince Edward County Affordable Housing Corporation — a non-profit corporation that will work with community stakeholders and developers — will expedite affordable-housing projects. One such project is his still unapproved Wellington Country Village, which would involve turning the site of a former hockey arena into a mix of 26 units of affordable and market-value housing. 

“This land, which has already been identified as a good spot for affordable housing, has been sitting idle for more than five years,” says Davidson. 

He says that the proportion of affordable housing at the site would ultimately depend on how much council is willing to “incentivize” the process to help offset lost revenue. He hopes that council will, for example, waive fees and ease property taxes.   

For now, Prince Edward County is faced with a familiar problem: how to maintain its growing economy while also remaining affordable for the people it depends on.  

“It’s such a nice place, with so much to offer. There are new businesses popping up everywhere,” says Mnyetto. “It has the potential of being this amazing place where you can have a diversity of economic activities and people. But the housing is the one barrier that is stopping that from happening.” 

This is one in a series of stories about issues affecting eastern Ontario. It's brought to you with the assistance of Queen’s University.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.​​​​​​​

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