Is Airbnb butchering Vancouver’s rental market?
Maybe the sharing economy isn't so great after all
February 26, 2016
Editor’s note: As Vancouver city council votes on Geoff Meggs’s recommendation to expedite a city study on the effects of Airbnb on Vancouver’s rental market (more here), read our take on the situation from February below.
In a city notorious for its high cost of living and relatively low incomes, subletting your apartment for the occasional night can be tempting. You get some extra cash, and Jill from Ohio saves on hotel costs. A win-win—if only that were how Airbnb really worked in this city.
Instead, Airbnb could be squeezing Vancouver’s already tight rental market, as a growing number of landlords are using their properties solely for short-term stays. “They are effectively taking away rental housing options,” says Karen Sawatzky, an SFU master’s graduate whose research has shown that short-term rentals directly affect Vancouver’s long-term rental market—a real problem considering this city’s low vacancy rate, 0.8 percent as of October. “Someone who’s willing to invest some time in becoming a savvy and available Airbnb host can make two to three times as much by renting a property on a short-term basis to tourists than is possible by renting long-term to someone who actually lives and works here,” she says.
This isn’t something that’s limited to a few cases here and there, either. Vancouver has a higher percentage of its population listing apartments on Airbnb than comparable cities like Toronto and Seattle (see infographic). It’s also ahead of the pack when it comes to hosts renting out full apartments rather than the spare rooms that were the company’s original vision. In other words, investors may be buying condos and turning them into full-time Airbnb hotel rooms.
No one knows why Vancouver has fallen prey so extensively to this illegal practice. Technically, the City of Vancouver forbids short-term rentals unless the dwelling has a relevant business licence. Yet 33 percent of local Airbnb hosts have multiple listings—one host alone has 22 condos available throughout the region. The City says it’s investigating the matter. For now, what we do know is that Vancouver is in desperate need of more rental units—and that Airbnb is making an already big problem just a little bit bigger.