Pandemic second home sales called drivers of County’s high-priced housing market

A study from McGill University on the effects of short-term accommodations on the housing market indicates the COVID-19 pandemic second home sales were the drivers of the high priced housing and rental market – more so than STAs.

However, McGill Professor David Wachsmuth, a global leading expert on the subject, says a solution to creating more affordable housing here is to prioritize principle residence STAs so that revenue is earned by local families and reduce or eliminate grandfathering.

“The trade-off between STAs and housing affordability is largest with dedicated STAs. As much activity as possible should be diverted to casual STAs,” he stated in his presentation. “Any major changes to STA rules will create enormous legacy benefits to existing licensees, which will ultimately reduce the efficacy of the rules.”

He based his comments on data from rental properties every day since 2017, every home sale since 2016 and the STA registration database.

“On the whole we should be prioritizing people operating home-sharing arrangements out of their homes as opposed to commercial-dedicated short-term accommodations,” he told council at Committee of the Whole, Wednesday.

He also suggested creating housing that STA or second home buyers won’t seek, such as multi-family housing in towns.

Wachsmuth stated up to half of home sales were turned into STAs about five years ago. That number he notes has since fallen to about 25 per cent, last year.

The County’s situation, he noted, is unique, stating that reservations at STAs dropped about 25 per cent during the COVID-19 pandemic but here, prices for STAs increased by about 75 per cent, something, he said that is unlike any other seasonal tourist destination in Canada.

“Listing growth was slowing before COVID-19 and COVID caused a further negative shock. Prices were relatively stable until COVID and have since exploded. This pattern makes PEC unique among Canadian seasonal tourist destinations.”