Small town living. Big-city prices. A crisis of affordability

Positioned on Lake Ontario’s northern shore between Toronto and Kingston, Prince Edward County may very well be reduce from a postcard. Boasting a thriving wine business, a vibrant arts and tradition scene, sandy seashores, and even a provincial park, the county is considered one of Ontario’s gems.

Prince Edward County, like many small communities in Canada, has turn into a major pandemic vacation spot for individuals seeking to depart large cities behind — however provided that you may afford it.

“We’re in disaster mode,” stated Charles Dowdall, govt director of the Prince Edward County Inexpensive Housing Company. “Within the final 18 months, the common home worth in Prince Edward County has elevated 94.6 per cent.”

The rental market within the county has adopted swimsuit. The typical lease for a bachelor condominium is $1,078, one-bedroom residences are renting at $1,456, and two-bedroom residences common $1,817, not together with utilities.

These costs aren’t a lot decrease than what you’ll see in Toronto and Montreal.

“The numbers are completely staggering,” stated Dowdall.

Prince Edward County is only one neighborhood out of tons of throughout the nation struggling to offer sufficient housing for Canadians, and the explanations are difficult.

Canada has been grappling with two separate however associated crises for the previous two years: COVID-19 and reasonably priced housing. Even earlier than stay-at-home orders had introduced many lives to a halt, record numbers of Canadians have been leaving the nation’s greatest cities searching for extra reasonably priced houses. Those that may work at home have been now residing of their workplaces. Many Canadians who had deliberate on downsizing or shifting to totally different cities in a number of years took the pandemic as an indication to start out packing. Based on Statistics Canada, the three largest cities (Toronto, Montreal, and Vancouver) misplaced greater than 87,000 residents between July 2019 and July 2020.

A wave of latest residents has crashed onto the banks of Prince Edward County. Individuals who as soon as toured the county on trip determined they may transfer there and revel in all the advantages yr spherical. This exodus runs counter to the trope of the upwardly cellular leaving cozy small cities behind for the chance of busier metropolitan cities. Small cities have lengthy been a haven to these in search of quieter neighbourhoods, closer-knit communities, and a greater reference to nature. Above all, rural cities have traditionally been cheaper locations to dwell.

“I see the pandemic as a form of pure experiment the place people have been roughly pressured to make adjustments and assume in another way about the place they dwell,” stated Michael Haan, the Director of the Statistics Canada Analysis Centre at Western College in London, Ont.

A 2020 survey carried out by Leger for RE/MAX Canada discovered 32 per cent of Canadians would moderately dwell in rural or suburban communities than a giant metropolis. This pattern is stronger amongst younger Canadians underneath 55.

“The whole lot, it’s at all times been directed in the direction of city centres. So, that is new,” stated Haan. “I feel the pandemic has actually pushed youthful generations particularly, to look outdoors of city areas a bit greater than they might have usually.”

A part of the issue additionally comes from the widespread uptake in distant work. Extra white-collar staff are actually capable of dwell and work from anyplace within the nation. Whereas small cities normally would profit economically from a inhabitants improve, distant work complicates issues.

“What we’re seeing now’s the individuals shifting to smaller cities, they have already got jobs,” stated Haan. “So, a variety of the acute labour shortages that smaller communities have been going through aren’t being solved by this newest wave of migration.”

Because the county attracts extra individuals, infrastructure has been struggling to maintain up. Dowdall stated native companies like wineries, artisan outlets and agriculture jobs are starting to undergo: “We can’t get individuals to work right here in hospitality. They simply can’t afford it,” he stated.

As the manager director of the Prince Edward County Inexpensive Housing Company, Dowdall routinely brings new concepts to county council conferences on this subject. One latest employees advice is to amend the county’s zoning by-laws to permit for inclusionary zoning. This implies new building initiatives would wish a certain quantity of reasonably priced housing items of their software to get approval from council. One other advice is to permit the event of tiny dwelling communities.

“I took all of the councillors final week on a bus tour so they may see the within of this 262 sq. ft. dwelling. It’s stunning,” he stated. “They actually have a built-in wine fridge for God’s sake. I wished to dispel the parable {that a} tiny house is only a Canadian Tire utility shed.”

Choices like tiny houses will assist the availability aspect of the difficulty, however there may be extra to take care of than simply the dwindling variety of obtainable houses.

The listing of things that led to Canada’s housing disaster is lengthy and complicated: traditionally low curiosity and mortgage charges set by the Financial institution of Canada, a low provide of latest housing and rental inventory, lengthy wait occasions for website planning purposes, a rising demand for extra single-family dwellings with more room, all contributing to skyrocketing costs.

Housing just isn’t a easy subject to check from a coverage perspective, as a result of it doesn’t fall neatly underneath one stage of presidency. Traditionally, all ranges of presidency have been answerable for totally different areas of Canada’s housing system at totally different occasions. The federal authorities has largely been answerable for creating nationwide housing insurance policies, insuring mortgages via the Canada Mortgage and Housing Company, and serving to new owners via tax-expenditures, grants, and government-backed loans. Provinces and territories took on a extra energetic function in housing throughout the Nineteen Seventies by creating provincial housing departments to assist resolve the place to spend federal funding, provide tax-credits, and management rental costs. Municipalities are largely answerable for deciding the place federal and provincial funding goes — and the way neighbourhoods are zoned for several types of housing. In addition they encourage builders to construct higher-density extra reasonably priced items.

By 1993, the federal authorities had shifted the obligation of reasonably priced housing to the provincial, territorial, and, in some instances, municipal governments. This left municipalities to take over a big a part of what had been a largely federal subject and resulted in small cities throughout the nation struggling for nearly 20 years. That modified in November 2017 when Prime Minister Justin Trudeau introduced the Nationwide Housing Coverage.

Tofino, B.C.

Nestled into the northern tip of the Esowista Peninsula, on the west coast of British Columbia’s Vancouver Island, Tofino has, for many years, been a major vacation spot for surfers, creatives and vacationers. As soon as a small, remoted fishing village, it has grown right into a sizzling spot that hosted an estimated 600,000 guests in 2018.

To an outsider, the annual wave of journey seekers who flood the city’s seashores, bars and bunkhouses ought to be a boon for native companies. However for the two,500 Tofitians who name this picturesque city their dwelling, this yr’s pandemic-fuelled flood of dwelling consumers has left many locals treading water.

“I’ve been watching individuals who have invested their lives on this neighborhood for 20 years get pushed out as a result of they will’t afford a house,” stated Tofino actual property agent Tia Traviss. “I do know loads of aged residents who simply wish to downsize however can’t.”

Traviss stated Tofino’s housing market was rising lengthy earlier than COVID-19, however when costs skyrocketed in large cities, her city was swarmed with consumers. Data from Statistics Canada exhibits that whereas Tofino’s inhabitants grew from 1,967 in 2016 to 2,516 in 2021, the variety of obtainable houses has elevated solely to 1,205 from 1,078.

The affordability disaster plaguing city centres has adopted these seeking to escape it. In Tofino, properties that offered for $1 million pre-COVID are actually getting a number of bids, promoting at virtually double the asking worth. Traviss stated even rental properties have bidding wars, and a few tenants are providing as much as a yr’s price of lease up entrance.

One other issue is the variety of short-term leases working in Tofino. Data from AirDNA, a market analysis agency based mostly in Denver, Colo., suggests there are 335 present energetic listings within the space.

Traviss stated the inducement for owners to maintain renting out their funding properties on the long-term rental market merely isn’t sufficient. “When somebody realizes what their trip suite could make on Airbnb, it’s arduous for them to withstand that added revenue,” stated Traviss.

The District of Tofino permits short-term leases via municipal zoning bylaws, designating them as industrial use properties moderately than residential. Operators additionally want a enterprise licence from the district.

“It’s ruined our city utterly,” stated Traviss.

Whereas some in rural communities can hope to make some straightforward cash by itemizing their property on Airbnb, the sharing economic system’s results on housing markets are nonetheless not totally understood. To get a greater understanding of how frightened these communities ought to be, we should always get some context first.

So, what about Airbnb?

The expansion of the sharing economic system within the final decade has allowed peer-to-peer providers reminiscent of Airbnb to flourish. Airbnb states on its web site: “On any given evening, 2 million individuals keep in houses on Airbnb in 100,000 cities everywhere in the world.”

CEO Brian Chesky began by renting out air mattresses within the basement of his San Francisco condominium. His firm is now listed on each the Toronto and New York inventory change and is valued between $18 billion and $31 billion.

On the outset, Airbnb was meant to be a budget various to staying at a lodge. Don’t really feel like reserving the Hilton to your 12-hour layover in Toronto? There’s an empty basement condominium for $50 an evening down the road. For a lot of Millennial travellers on a funds, it’s a horny various to accommodations and hostels.

This shift away from common lodge chains is an element of a bigger change in tourism. Skilled travellers naturally begin searching for newer experiences. They need a great story to inform at their subsequent barbecue.

There’s a demand for contemporary journey to be genuine and thrilling — Airbnb fills that demand.

With the introduction of Airbnb’s Insider Guidebooks in 2016, hosts may now share their neighbourhood’s greatest spots for late-night tapas or early morning brunch with their company proper on the app. This put the corporate in direct competitors with evaluation providers provided by Google, Fb, and Yelp.

Insider Guidebooks was launched side-by-side with Experiences: Airbnb’s latest add-on to its reserving service. Because the identify suggests, it permits travellers to ebook actions hosted by locals, via Airbnb’s portal. Customers can go truffle looking in France, stroll with alpacas in Quebec, or attempt their hand at pasta-making with an actual Italian grandmother.

Regardless of its success, Airbnb was hit arduous when the pandemic got here knocking. In a message posted to its web site final spring, Chesky confirmed the layoffs of round 1 / 4 of Airbnb’s 7,500 workers. Even after chopping its workforce, Airbnb nonetheless managed to generate $1.5 billion in This fall income, 20 per cent increased than the earlier yr.

As with many disruptive improvements, Airbnb’s exceptional progress over the previous decade has made it the goal for accusations of gentrifying residential neighbourhoods, fuelling over-tourism, and extra just lately, draining native housing markets of accessible houses.

Airbnb and the housing disaster

Housing crises in each Canada and the USA have pressured the implications of Airbnb’s progress into sharp focus.

In a 2019 study: “Brief-term leases in Canada: Uneven progress, uneven impacts” researchers from the College of City Planning at McGill College carried out “the primary complete evaluation of short-term rental exercise in Canada.”

The report estimates short-term leases have eliminated a complete of 31,000 items of housing from long-term markets in Canadian cities. That determine relies on the variety of incessantly rented entire-home listings obtainable for no less than half the yr and rented for no less than 90 days. Rural communities, these with lower than 10,000 residents, noticed a rise of 60 per cent in incessantly rented entire-home listings — virtually double that of main cities.

The info gathered by the South Brief Housing Motion Coalition helps these findings. In Lunenburg, N.S., for instance, 89 per cent of the 277 listings are for whole houses.

In Prince Edward County, metropolis employees accomplished a report final January inserting the variety of entire-home listings at 536 of the whole 797 listings.

The McGill report notes a majority of these listings symbolize a conservative estimate of housing loss, however their excessive progress charges are nonetheless a trigger for concern. As of December 2021, there are greater than 4 million hosts renting out the six million energetic listings worldwide on Airbnb.

A better variety of properties than hosts means some hosts function a couple of itemizing, which may be for a single room, a number of rooms, or a complete dwelling. Having a number of listings at one location is inside Airbnb’s terms of service and these multi-unit hosts could make some huge cash.

Multi-unit entire-home hosts account for 30 per cent of income generated however solely seven per cent of all hosts in Canada in line with a 2017 report ready by CB Richard Ellis Ltd. for the Resort Affiliation of Canada.

In a 2020 research paper, Andrea Shillolo, a grasp’s scholar in McGill College’s City Planning division, in contrast Airbnb’s results on rental housing markets in New York Metropolis and Toronto. Each cities are battling housing affordability crises and low emptiness charges. Each cities are additionally main journey locations for vacationers, which means demand for lodging can also be excessive.

Shillolo recognized “ghost accommodations” as a serious supply of housing loss in each metropolis’s markets.

“A ghost lodge might appear as if a home-sharing association, however it’s successfully a lodge, and moreover it might be hiding in plain sight […] its element listings seem like separate, single-room leases.”

This type of itemizing may imply early estimates of housing loss have been too conservative. Earlier analysis has targeted totally on entire-home listings as a measure of loss.

Lastly, ghost accommodations current main challenges for the lodge business: whereas they function like a small-scale lodge, they’re exempt from the identical zoning, security, and tax rules.

“Not solely is Airbnb facilitating the conversion of properties into short-term leases, it’s enabling customers to take action in covert methods which have slipped previous regulators’ consideration,” Shillolo concluded.

The gray space

A serious problem in regulating short-term leases is how shortly Airbnb has unfold. Simply 5 years in the past, Québec lastly grew to become the primary area in Canada to introduce laws requiring short-term rental operators to register their properties with the province. Different provinces and municipalities throughout Canada have applied rules in a single type or one other, and nonetheless extra are beginning the dialog.

Town of Brampton, Ont., handed an up to date bylaw in September, limiting short-term leases to the operator’s main residence, successfully barring using funding properties for short-term leases. Operators will even require a particular municipal licence.

Metropolis employees in Charlottetown, P.E.I., offered a algorithm to the municipal planning board in October. The proposal would disallow short-term leases in condominium buildings and would restrict the variety of listings to 1. Operators would additionally require metropolis and provincial licences

Winnipeg, Man., is exploring regulatory measures associated to correct taxation, licensing and fireplace security requirements. In Saskatoon, short-term rental operators require a industrial enterprise licence, a bunch declaration, and discretionary use approval from town in sure zoning districts.

These conversations are little doubt promising, however rules and bylaws are solely a part of an answer. Ren Thomas, an affiliate professor in city planning at Dalhousie College, stated there isn’t a robust incentive for some rural areas to crack down on short-term leases.

“In a variety of instances, these smaller communities are tourism sizzling spots, and so they rely closely on that tourism revenue. Brief-term leases hold individuals coming to their communities, so it’s comprehensible why they don’t wish to do something to discourage that,” stated Thomas.

Smaller communities additionally usually have fewer sources to make insurance policies that guarantee are following native bylaws.

South Shore, N.S.

On the southern coast of Nova Scotia, members of the South Shore Housing Motion Coalition are tackling the identical points as in Prince Edward County and Tofino.

Helen Lanthier has been a member for greater than a decade. She stated one of the crucial urgent points is getting individuals to acknowledge the housing disaster in rural communities. “Till just lately, it was simply assumed that there was no housing disaster in rural Nova Scotia,” stated Lanthier. “However that’s merely not the case.”

Information assortment is an important a part of the answer, one which Lanthier stated is severely missing in rural communities. Entry to raised housing knowledge was considered one of many suggestions tabled within the Nova Scotia Inexpensive Housing Fee’s 2021 report.

“If we don’t have significant knowledge to point out the provincial or federal governments, it’s a lot more durable to point out how determined the scenario is,” stated Lanthier.

The report’s authors observe municipalities usually don’t have enough experience or autonomy in terms of their function in offering reasonably priced housing: “Communities should be capable to research their very own housing wants and demand, however they lack enough capability or sources to take action.”

Francis Kangata, deputy mayor of Mahone Bay, N.S., has seen these challenges first-hand.

“I feel, till just lately, it’s been tough for municipalities to see themselves as a key participant in addressing their communities housing issues,” stated Kangata, who helps administer the city, positioned an hour’s drive southwest of RisePEI.

Lanthier and Kangata agree the pandemic has put extra stress on each residential and rental markets, bringing the necessity for reasonably priced housing into stark focus.

“I feel traditionally, we’ve been involved with housing these experiencing excessive poverty,” stated Lanthier. “However that is the primary in 10 years doing this work that I’ve run into this subject of {couples} and households with a secure revenue not having the ability to discover an reasonably priced place to dwell.”

Communities on the South Shore are additionally grappling with the explosion of the short-term rental market.

In 2019, the South Shore Housing Motion Coalition ready reports for each municipality within the area.

These experiences recorded a complete of 790 energetic listings for residences and whole houses, with the latter representing most listings.

The crux of the difficulty is that short-term leases are extra worthwhile as a house owner’s second property than long-term leases. Brief-term leases are made to serve vacationers moderately than individuals who dwell and work in these cities.

As of April 1, 2020, short-term rental operators in Nova Scotia should register their properties with the province and pay an annual price, between $50 and $150 relying on the variety of bedrooms.

This was one of many first options introduced ahead by native advocates with the intention to “stage the enjoying subject” between short-term rental homeowners and industrial operators within the tourism business.

“They’re right here to remain, so the query is: ‘How will we be sure that the impacts stay optimistic?’ The large piece remains to be regulation, and regulation in a means that is smart,” stated Kangata.

Whereas heavy regulation might seem to be a no brainer, many small cities — particularly these close to the coast — depend on their tourism business to maintain the economic system. Tourism in Nova Scotia nonetheless earned an estimated $1 billion in 2020, the primary yr of the pandemic, down from $2.64 billion in 2019.

Lanthier stated she sees each side of the argument. Whereas short-term leases chip away at obtainable rental and residential housing inventory, additionally they present a spot to remain for incoming vacationers seeking to spend cash.

“We all know our communities want short-term leases to proceed rising, however we additionally want dependable knowledge and the coverage sources to manage them,” stated Lanthier. “Change is gradual, however it’s taking place.”

As provincial and municipal governments grapple with how greatest to manage short-term leases, Ren Thomas, an affiliate professor of city planning at Dalhousie College, stated cooperation throughout all ranges of presidency will probably be important to hanging the required steadiness.

“One a part of this that individuals usually miss is trying throughout the nation, and even internationally, at different cities and international locations who’re attempting totally different approaches to this subject,” stated Thomas. “We completely can’t afford to have tunnel imaginative and prescient on this subject.”

What’s subsequent?

So, the place will we go from right here?

Haan stated it’s arduous to inform whether or not the migration away from city centres would proceed in a post-COVID-19 Canada, or if it’s only a symptom of the pandemic.

“That’s the million-dollar query, proper? What we’re beginning to see is our main centres are rising a bit slower in comparison with the final 20 years and the inhabitants is distributing itself extra evenly throughout the nation,” stated Haan. “This isn’t the identical rural Canada from the Nineteen Eighties, so we’ll should observe it intently — we’re in uncharted territory.”

Whereas the federal authorities signalled its re-entry into the difficulty of reasonably priced housing in November 2017, it stays to be seen whether or not it delivers on lofty pre-pandemic guarantees it made because the nation enters one other yr of residing with COVID. The pandemic has confirmed to be a catalyst for debates surrounding a fancy subject like reasonably priced housing.

“It may’t all be about {dollars} and cents,” stated Dowdall. “We have to begin serious about individuals once more.”

“I feel we’ve been shocked again to speaking about very basic items as a society,” stated Kangata. “Our flesh pressers have been pressured to avoid all of the paperwork and noise that surrounds these fundamental points to face this stuff head so we would be capable to begin doing issues in another way and that provides me hope.”