Craig Foster knows first-hand about the short-term rental issues in Prince Edward County. Following his divorce about three years ago, he struggled to find a suitable rental home.
“I was forced to bounce into three different apartments in the span of two years because there was nothing available for more than three months at a stretch,” said the news director at community radio station 99.3 County FM.
“I’ve got two little girls and I’m having to take these little Airbnb places just to have somewhere to bring my little girls to and having to move every few months,” he said.
More recently, his other daughter, 20, has left to live in Deseronto, a town east of the County, with her partner and new baby because they couldn’t find somewhere affordable closer to her family, he said.
Short-term rentals have been blamed for reducing Toronto’s tight housing stock, and turning some condos into “ghost hotels” that undercut the traditional accommodation business.
But in Toronto’s summer playground to the east, the issue of short-term accommodation is more complicated. At its peak, there were 1,500 short-term rental listings in Prince Edward County. That’s about 9 per cent of dwellings in the area, say county officials. Eighty per cent, or 1,200 of those, are entire homes. Only 20 per cent are owner occupied or traditional bed and breakfasts.
On one hand, there aren’t many big hotels in the County, so the rentals provide beds for the tourists who increasingly flock to its beaches, wineries and farm-to-table eateries.
On the other, they can irritate locals and have reduced the already tight housing supply to the point where employers cite the scarcity as the biggest barrier to attracting workers to grow their businesses.
A county staff report last year indicates a Toronto-like 0.81 per cent vacancy rate “and greater demand for housing than the current residential development market can support.”
Year-round residents say short-term accommodations have helped drive up real-estate prices in bucolic, flower-box towns such as Wellington, Bloomfield and Picton, and brought unwelcome late-night noise, towering campfires, overflowing parking and garbage.
Add to that the issues with septic systems in homes that are being overoccupied by holiday makers and neighbourhoods that go dark once the visitors leave because the homeowners don’t live in town.
Airbnb, considered to be the largest short-term rental site, says it had 900 listings in Prince Edward County last year. Hosts in the area typically rented their accommodations for 43 nights a year at an average rate of $150 a day.
“Imagine a 10 per cent shift in the housing supply in Toronto,” says Picton realtor and former county councillor Treat Hull. There are about 11,000 dwellings in the County. If 1,000 are being used as short-term accommodation that “has been a really significant shift,” he says from a corner seat with a view of Lake Ontario at the Drake Devonshire Hotel in Wellington.
With its hipster vibe, locally based menus, events and lakeside views, the Drake’s arrival about five years ago helped ignite the County’s recently booming status as a vacation destination. Its popularity has also helped make Wellington the Ground Zero for short-term rentals, Hull said.
Until about five years ago, his real estate clients tended to be retirees. Now they are frequently mid-career professionals and artists, who aren’t ready to give up the city altogether. Meantime, he said, they want to buy income-generating properties.
But long-term residents worry about the impact on their towns with so many absentee homeowners.
“If a big number of the houses on your block are transient, your sense of community is eroded,” Hull said.
There are more than 1,500 housing units in some stage of development in Prince Edward County to be built over the next 10 years, Hull said. “It’s a massive number,” even if only 100 a year actually materialize, given that for many years only 25 new homes would be built, he said.
Hull was still on council last October when the county passed an official plan and zoning bylaw amendment to address concerns about short-term accommodation (STA). A licensing system is being refined and will likely go before council for approval this summer, said Paul Walsh, county planning manager.
Under the amendments, no more than 15 per cent of homes in a given area will be permitted to operate as STAs. Traditional bed-and-breakfast operations and STAs where the long-term owner lives on site aren’t included in the 15 per cent but will likely have to comply with the coming licensing provisions. The 15 per cent rule has been grandfathered so any property that can prove it was being used as a rental prior to October can continue to operate. The bylaw is applied to the address rather than the property owner. But new operators will have to apply for a licence contingent on inspections such as fire and safety.
Walsh said that will help weed out landlords who are renting out campers and bunkies that aren’t permitted as STAs.
Walsh said the rules are about balance. The planning and zoning amendments were intended to protect the housing supply while still allowing accommodations for tourists.
Development is coming to the County, Walsh said, citing an exponential increase in the number of applications. But he said it will be at least a couple of years before new housing supply alleviates the shortage of housing.
Meantime, enforcing the new bylaw and licensing provisions will be important, he said.
The county is still considering how to identify which homes are being used as STAs, including software that helps detect listings online.
“Ultimately we’ll also be relying on the complaint mechanism of neighbours, which seems to be freely flowing,” Walsh said.
The amendments passed on Oct. 9. The next day, Wellington-based realtor Stephanie Sokolowski says she and other agents in the area lost the majority of their buyer clients, many aged 30 to 45 with $400,000 in equity from their Toronto home to invest in an income property.
“At $400,000, you could still cover all your bills. But they really needed the mortgage payment,” she said.
Sokolowski called all her clients to explain that it was possible that if they bought a place it might turn out to be beyond the allowable number of short-term rentals the county would permit so they risked being shut down. That wasn’t something they could afford.
“Everybody from Toronto needed the income to support the investment,” Sokolowski said.
Some buyers have returned, wondering if they can buy an existing rental property under the grandfathering provision. But, she says, the market has faded for mid-range homes to be used as rentals.
“Now, it’s not people looking for a vacation home any more. Now the people we’re working with want to come and live here and they don’t want to buy in Wellington because Wellington is full of Airbnbs and they don’t want to live next door to one,” she said.
Airbnb operator Michelle Kosoy said she supports the new rules and believes they have a role in protecting her neighbourhood. She and her husband, both artists, have been renting out two bedrooms in their Wellington house since they arrived about three years ago from Toronto.
They charge about $150 for the master bedroom with ensuite and about $110 a night for another room with a shared bath. They take two or three days a week to themselves but are otherwise booked solid from May to September, she said.
Now they are renovating their barn into a studio and building a small, stand-alone residence for themselves on the property. When that’s done, Kosoy says they will rent out their entire main house.
But as a year-round resident herself, Kosoy says, “We don’t want to have a dormant community all winter long. It’s important that there are people living there and our businesses can thrive.”
“We’re all for them not being too concentrated,” she said.
Complaints tend to centre on wedding parties, groups celebrating with too much drink where the noise gets out of hand, Kosoy said.
Guerin and Jessica Sykes opened their Picton bistro, the Marans Dinebar, on Main St. in March. Named for a French breed of hens, the restaurant offers Asian, African and Middle Eastern flavours.
The couple, who have two boys, moved from Ancaster, Ont., about two and a half years ago after coming to the County on vacation in 2015. Guerin had a corporate food-service job that was exciting but took him away from the family and cooking he loved.
When they began planning their move, the Sykeses set a budget of about $300,000 for a home, hoping for something in Picton. By the time they were ready to pack, prices had jumped and they raised their budget to about $400,000. They ended up buying a 40-acre farm about half an hour from the restaurant and have recently severed and sold half the property.
Last year, the Sykeses worked at the nearby Waupoos Winery, a celebrated destination for diners and weddings. They say they have been lucky that their sous chef from Waupoos has followed them to the Marans as there is intense competition for seasonal staff. They have also hired one part-time and one full-time server.
“We pay a little more than server minimum and everybody gets proper tips,” Jessica said.
Housing is a challenge for seasonal hospitality workers and some bigger businesses rent or buy homes for their employees, Guerin said.
“The County has become what it is because of the tourists but it has also been a detriment to the locals,” Jessica said.
Foster, like many locals, is thrilled at the growth of the wine and tourism industries. After all, he said, they help support his career in radio. But he thinks the seasonality of the work and the shortage of housing stacks the deck against young people in particular.
“Sometimes people will list a place to rent as though it’s some great thing and it’s still $1,600 or $1,700 a month. If you’re only making $17 an hour this is just not attainable,” he said.
Foster’s own housing issue has been resolved by a relationship with a partner who owns a house in Wellington. Otherwise, he said, “I would still probably be floating in the wind.”
Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski