In the middle of Charlottetown's housing shortage there is a mystery: a mismatch between the number of apartments being built, and the lack of overall growth of the number of apartments in the city.
CMHC found a record low vacancy rate in the province at the end of last year, despite the unusually high number of apartments that were built.
According to the City of Charlottetown there were 194 new apartments completed in the city in 2018. In the previous four years there was an average of 71.5 units built per year. But numbers from the Canada Mortgage and Housing Corporation show in 2018 just 44 apartments were added to the total inventory.
One hundred fifty apartments went missing. CMHC counted 5,182 rental apartments in Charlottetown at the end of 2018, for a growth of just 0.86 per cent.
What's being counted
In order to figure out where they went, you need to first understand what the city is counting, and what CMHC is counting.
The city bases its numbers on completed projects from building permits. It recorded 10 buildings completed, with between four and 60 units each for the total of 194.
The CMHC criteria are somewhat more complicated.
It is counting what is known as the primary rental market. That is apartments in buildings with three or more units that are privately rented. So it does not include, for example, a basement apartment under a private home, and it does not include rental subsidy units.
All the Charlottetown numbers are for buildings with more than three units, so there is no discrepancy there. CMHC says there can be sampling errors from year to year, and that can't be accounted for. Outside of that there are four places the missing apartments might have gone.
- An increase in rent-subsidized units.
- Conversion to condominiums.
- Conversion to vacation rentals.
City permits are also required for demolition, so the City of Charlottetown can tell us that 20 units were demolished in 2018.
That leaves 130 missing.
It is difficult to say for certain where they went, but there is a good chance they are apartments converted to subsidized rentals, and therefore no longer counted in the primary rental market by CMHC.
The province does not track the number of rent subsidies in Charlottetown in particular, but said that province-wide it has added 300 rent subsidies this year.
Not only is it difficult to say how many of those are in Charlottetown, it is also difficult to say how many of those CMHC knows about. CMHC surveys landlords, but the province has moved towards paying rent subsidies directly to tenants. There is a chance that an apartment is rent-subsidized but the landlord, and therefore CMHC, doesn't know about it.
That leaves condominium and vacation rental conversions, which no one is tracking. But CMHC senior analyst Chris Janes has heard anecdotal evidence while talking to Charlottetown landlords and developers.
"I think the other thing, that's very much alive on the Island right now, particularly in Charlottetown, is vacation rentals," said Janes.
"If we think about Airbnb, we don't capture numbers on that at CMHC but it is something that's very real."
But Janes doesn't think that vacation rentals explain the missing Charlottetown apartments. He believes most of that activity is happening below the radar of what CMHC is tracking, in buildings with three or fewer units.
While these apartments aren't part of the official CMHC vacancy rate measure, filling them with tourists will still have an impact on long-term residents looking for a place to live.
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