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Vancouver's Airbnb regulations need to be tougher, says researcher

Author of bombshell report says it's clear short term rentals are reducing rental housing supply.

Condos in Vancouver's Yaletown neighborhood on September 8, 2016.

Jennifer Gauthier / For Metro

Condos in Vancouver's Yaletown neighborhood on September 8, 2016.

A McGill University professor who has studied Airbnb in three Canadian cities says Vancouver’s proposed regulations don’t go far enough to combat the very real threat illegal short-term rentals pose to rising rents and housing supply.

“It’s a very good first step that they’re proposing to regulate short-term rentals,” said David Wachsmuth, an assistant professor at McGill’s School of Urban Planning.

“The City of Vancouver itself is only expecting 25 per cent compliance. That’s a bad sign, if that’s the projection they’re making at the outset, before anyone’s had the ability to figure out the shenanigans to get around the regulations.”

It looks as though Vancouver city staff may be paying attention to what Wachsmuth has to say: he said city staff have been in touch following the release of his “Short Term Cities” study last week.

Vancouver and Toronto have both proposed to regulate short term rentals. Vancouver’s proposed policy would allow short term rentals, but only in the homeowner’s principal residence.

Those who want to legally list their home on a site like Airbnb would have to apply to the city for a permit and display their permit in their listing.

But Wachsmuth said it’s unlikely the city will have the resources to effectively enforce the proposed rules. He pointed to the way short term rentals have been regulated in Amsterdam, where Airbnb now automatically blocks any entire-home listing “once 60 days of booking have been reached.”

“In the absence of co-operation from the platforms, a city seeking to enforce an annual limit on 60 days of rentals would need to conduct 61 separate inspections to identify a violator,” Wachsmuth explained in his study. “Airbnb, on the other hand, can modify the online platform to disallow further rentals from a listing that has reached its 60-day limit.”

Along with the short-term rental platforms being responsible for enforcement, Wachsmuth thinks two other principles should be at the heart of regulation: one host, one rental, meaning that homesharing should be limited to people actually sharing their principal residence; and no full-time, entire-home rentals (some jurisdictions have imposed a 60 or 90 day limit).

A map from the study showing entire-home listings are most concentrated in Vancouver's downtown core. The pattern is similar in Toronto and Montreal.

David Wachsmuth, Short Term Cities study

A map from the study showing entire-home listings are most concentrated in Vancouver's downtown core. The pattern is similar in Toronto and Montreal.

Wachsmuth’s study showed that larger, commercial operators with multiple, entire-home listings are making the bulk of revenues: in Vancouver, 20 per cent of the hosts make 70 per cent of the revenue.

Based on his research of Airbnb usage in Vancouver, Toronto and Montreal, Wachsmuth said that short term rentals are both permanently taking rental housing supply out of the market, and are playing a role in pushing rent rates up.

In a statement, Airbnb disputed that assertion and said Wachsmuth “has a history of history of manipulating scraped data to misrepresent Airbnb hosts.” But Wachsmuth stands by his research.

“If you think about, if you’ve got 20,000 listings in one of these cities, there’s a million homes in Vancouver. So it’s a very small number in that sense,” Wachsmuth said.

“But when you realize the impact is as focused as it is on specific kinds of neighbourhoods and specific kinds of homes, then in those areas there’s a lot of impact. So one of the things we document is how concentrated some of the housing loss is.”

Housing construction in Vancouver's downtown core has been robust enough to keep up with the rapid growth in full-time, entire-home Airbnb listings, Wachsmuth says of this map. But in more well-established neighbourhoods like Kitsilano,

David Wachsmuth, Short Term Cities study

Housing construction in Vancouver's downtown core has been robust enough to keep up with the rapid growth in full-time, entire-home Airbnb listings, Wachsmuth says of this map. But in more well-established neighbourhoods like Kitsilano, "Airbnb growth is completely outpacing new constructions and actually reducing net available housing stock."

There’s also a connection between Airbnb and the trend to build luxury condos, Wachsmuth said: for 40 years developers have preferred to build condos rather than rental buildings. Now platforms like Airbnb “just make it an even easier decision for developers to opt for luxury condos.”

“Investors who want to buy those condos, not to live in but as some kind of financial investment, Airbnb’s a really nice way to make some additional money without having to worry about tenants who have rights.”

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