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City pushes to collect new info on Airbnb with view to new rules

April 1st, 2016 · 36 Comments

So interesting to see how the ground is shifting on this issue of Airbnb.

When I first wrote about the phenomenon in Vancouver four years ago (inspired by rumblings of dissatisfaction I’d been hearing in other cities), there didn’t seem to be a lot of concern.

The bed-and-breakfast people weren’t so happy, but the hotel association was staying out of the fight and it didn’t seem to be on a lot of people’s radar. My main problem with the story was finding an Airbnber to talk to me, I presume since many of them are breaking several kinds of bylaws or strata rules or CRA reporting requirements.

Fast forward, and we get to this week, where council is now pushing hard to get maximum information in order to figure out what to do. The number of listings in Vancouver has increased to almost 5,000.

It’s not just this council that’s worried. Others are too, along with landlords (I talked to an apartment manager in my story whose sign in front of the building specifies “No Airbnb) and strata councils, which have been rapidly moving to create new bylaws that prohibit Airbnb rentals.

At the same time, it’s not a black and white issue. I, like many in this city, have used Airbnb elsewhere because of the chance it gives to feel like you’re living in a real apartment in a regular neighbourhood. I try hard to stay at places that don’t appear to be set up as permanent hotels. I’m not always successful, but I do try. My best experience was a gorgeous place in Lyon I rented from a flight attendant who was in Iceland during our four days there.

I’ve also been contacted, since I wrote the story, about people who say they’re concerned that there will be a crackdown on the kind of Airbnb rentals they do that they believe help provide needed spaces for visitors, but don’t take away long-term housing — people who rent out a spare room or who rent out their whole places if they are away for a few weeks or months on vacation or business.

I understand there’s been divided opinion at the city’s rental advisory committee, because some representatives there say it helps renters if they can have someone stay a few nights a month to help them make the rent.

And a UBC student has also written about the issue of people who are renting out a spare room.

On the other hand, there are indeed whole units being lost to the “hotel” market. I wrote about last year about a couple who said they decided to Airbnb their basement because the tenant was moving out. I later heard from the tenant that she’d been told they were planning to do that, so she decided to leave without a fight.

That’s a problem when, as anyone looking for rentals these days knows, it’s a near-zero vacancy rate and there are 100 applications for any available unit that isn’t a slum.

 

Categories: Uncategorized

  • sthrendyle

    There are probably 5,000 case by case studies that you would need to conduct; though. I’m sure what is happening in Ulrike Rodriguez’s building is truly dodgy and should be stopped, but you are right, AirBnB does offer the opportunity to earn a few extra dollars and it definitely makes for more interesting travel. (This is also a huge issue in Whistler). I think for landlords what it becomes is – do I want to take a chance on renting my place out for 5 nights for month for the same as I might rent to a tenant, and not risk having a ‘bad tenant experience’? When a ‘bad’ Airbnb client comes along, you are done with them in a day or two. A problematic tenant might end up being in RTA arbitration, a nightmare most people don’t want to go through.

  • Kenji

    All for-money hotel accommodation should be regulated by the Hotel Keepers Act. This limits liabilities for both the renter and the guest. It should also be registered as a hotel by the City, which has a legitimate – and in Vancouver, pressing – interest in knowing how much of the limited area of the city ought to be given over to businesses that are in the hospitality industry and which are dwellings for residents.

    I don’t blame people for making money innovatively but it is not a small little thing anymore. This is literally the biggest hotel chain in the world now. Time to grow up.

  • Miteymiss

    Thanks for your interest in this issue. I’ll be at City Hall Tuesday to support Councillor Meggs as he presents his motion.

    I have two hopes: first, that the City’s policy-makers recognize that suites outfitted as hotel rooms in multiple-unit >residential< buildings should be addressed differently than single-family homes. And second, that "commercial users" — New York City's term for Airbnb "hosts" who list more than two homes for the pure profit of it — are culled aggressively.

  • IanS

    After reading the article, I’m at a bit of a loss to identify the nature of the problem, what exactly is being investigated and what the City plans or hopes to do about it.

  • Tiktaalik

    Considering that we just had a report that busted some very popular housing myths, I’m glad to see that while the city is very concerned, they’re still going to conduct research and approach this problem in a data driven way.

    I think it’s totally reasonable for the city to want to reduce the amount of condos being constantly rented out on super short terms like a hotel business. Those units should be rented to long term tenants. I’m interested to see just how high of a percentage of Airbnb activity in Vancouver falls in that category. I wouldn’t be surprised if it’s less than people think.

  • A Taxpayer

    “Those units should be rented to long term tenants.”

    Why? If the Strata Corp has no problem with short term rentals then why is it the concern of anyone else what someone chooses to do with their property? Clearly they are not a nuisance to their neighbours.

  • boohoo

    Yep, it offers much greater flexibility on top of more money. We had rented, they left, and we started airbnbing our suite. Some up front costs for sure, and there’s more communication required than with a tenant but, you make more money (in our case we booked several months for more than double what we were getting in rent), I can just book it off if I have friends or family coming, far less wear and tear on the appliances, plus you often meet really nice people, etc.

    I get that the city needs rental housing, but as a single family homeowner, why is that my responsibility?

  • A Taxpayer

    I totally agree with you but I am curious. Do you believe that property owners are entitled to leave their houses/condos empty without any financial consequences? Or that property flippers should not be subject to any additional taxes to those currently levied?

  • Tiktaalik

    Looking at the issue from the broader view, in the worst case, prevalent short term rentals potentially have negative impacts on the cost of living for both renters and homeowners.

    There are real negatives to a high cost of living in a city, especially in relationship to other cities, and it could be appropriate for the city to act via regulation to prevent things that would exacerbate cost of living increases.

    To be very clear the scenario I and most people are concerned with is when condo owners rent out their units 100% of the time, essentially using their condo as a room in an abstract hotel business. People renting out their places on occasion is not really an issue to be that concerned about in my opinion.

    In this ‘Abstract Hotel’ scenario the amount of revenue an investor can earn from their condo is dramatically more than what they could earn by renting it out normally. The concerns I have arise from a scenario where many people recognize these new financial benefits, and thus start renting their units on Airbnb in this fashion instead of renting them normally. This results in a lowering of vacancy as units are taken off the market in favour of Airbnb, and rent increases as there is the same demand for less units. Vancouver already has a sub 1% vacancy and people have already expressed a lot of concern about decreasing affordability in the rental space. Clearly one can build more units in response, and the city is already doing this, but this is easier said than done as the turn around time to build condo buildings is counted in years. As well if you’re building new condo buildings, and not new purpose built rental buildings, then you’re going to be losing a great deal of units to investors on Airbnb, and not really helping the low-vacancy problem that much.

    Additionally if the potential revenue from a rental condo is now higher, condo prices could rise as greater returns give investors more flexibility to afford more expensive condos, and developers are able to charge more. The treatment of housing as investment is already prevalent but rising revenue streams will increase speculation further. An additional impact of higher condo prices is higher regular rents for regular rentals, as condo owners have paid more and need to try to recoup those costs.

    I’m laying out the worst case here, and not suggesting this is currently happening, but due to these potential impacts in the above scenario, I think it’s worth studying the issue closely to better understand the nature of Airbnb in Vancouver and how it’s being used.

  • Tiktaalik

    Related:

    Airbnb to purge illegal hotels from San Francisco listings.
    http://www.sfgate.com/business/article/Airbnb-to-purge-illegal-hotels-from-San-Francisco-7223613.php

    Airbnb is now starting to work with municipal governments to enforce municipal rules. It’ll be interesting to see how accommodating Airbnb will be and at what point they push back.

  • IanS

    “… the scenario I and most people are concerned with is when condo owners rent out their units 100% of the time… renting out their places on occasion is not really an issue to be that concerned about in my opinion.”

    Why? If someone rents their condo a half dozen times a year or 100% of the time, isn’t the key issue you’re concerned about the fact that the unit is not available for long term rental? Why is it better if the condo unit is only ranted out “on occasion”?

    “The concerns I have arise from a scenario where many people recognize these new financial benefits, and thus start renting their units on Airbnb in this fashion instead of renting them normally.”

    In economic terms, that would be acting rationally. If one can make more money, and avoid the restrictions imposed by the RTA, why not do so? Wouldn’t you?

  • Tiktaalik

    “Why is it better if the condo unit is only ranted out “on occasion”?”

    I’m assuming in this scenario that someone is living in the unit, and occasionally renting it out (eg. when they’re on holiday, on weekends). This doesn’t matter because it doesn’t impact vacancy.

    “In economic terms, that would be acting rationally. If one can make more money, and avoid the restrictions imposed by the RTA, why not do so? Wouldn’t you?”

    Yeah sure why not. However, individuals acting rationally can produce outcomes bad for the group (see: tragedy of the commons). Following study, the city may find that certain uses of Airbnb may be good for individual investors, but be bad for the wellbeing of city in general.

  • boohoo

    Charging based on leaving it empty seems really hard to do and not worth it. Charging more for flipping could be ok depending on various definitions and conditions. Some kind of foreign owner tax is a no brainer.

    The city or other levels of government or private developers should be building significantly more rental housing as again,I don’t think it’s current homeowners who should be responsible for or punished for not providing rental housing, something they’ve never been responsible for. People rent out their basements or extra rooms to make money, not some noble intent of providing housing. If you can get more income through airbnb, what rational person wouldn’t?

  • A Taxpayer

    Yes, that is the progressive way isn’t it. You are all for capitalism when you are making the buck but it is tax the profiteers for the good of the community when others are making the buck.

  • Kenji

    I should have mentioned in my earlier post that my concern is mostly for that of apartment dwellers who could be and apparently are concerned by anonymous one-nighters doing whatever in the flat next door, and of course the fact that any kind of building security goes out the window when you’re distributing front gate keys/codes willy nilly.

    While I do think the city has to have a better idea which properties are for residents and which are hotels, in order to better manage land use, people with houses who rent out the basement now and then are not as concerning to me. At least the owners are living in the property.

  • Kenji

    Because return on investment is different for real estate than it is for betting on stocks or playing bingo. Land is like air and water, it is finite and there is or should be some regard for it in terms of collective stewardship.

    Under a no-holds-barred financial scenario, you could have a trillionaire buying all our houses and letting them just sit empty.

    If that is not acceptable – if there outta be a law – then you agree with me that real estate is not just about letting the buyer do whatever he wants.

    In fact, when was that ever the case? Anyone who has had the cops called on them for a loud party because his friends came over with their electric guitars to celebrate his 40th (cough cough) knows that there is a cap on how we can use our property.

  • A Taxpayer

    The difficulty that cities face in regulating the activity is that there is a demand for the service by a broad cross section of the population, low barriers to entry, it is self regulating (host and guest reviews) and profitable with few direct negatives to the community, mainly competition with hotels that some might characterize as unfair.

    This is the free market at its finest and the situation is self correcting. Demand for the service is not unlimited and at some point supply will affect occupancy rates reducing the excess profits owners are now enjoying and the certainty of rental income may be more important to owners needing to rent their properties 100% of the time.

    So before launching yet another regulatory regime and its resulting costs, we really need to examine the problem we are trying to address. If it is lack of rental housing, there are much better ways with a higher degree of success than maybe increasing supply by regulating Airbnb rentals.

  • boohoo

    Hey look, civil discourse lasted for such a sweet fleeting moment.

    If I were buying property in Tanzania, I’d expect to pay more than a local, not sure how that’s a bad thing? Or am I misinterpreting your passive aggressive insult?

  • IanS

    “…individuals acting rationally can produce outcomes bad for the group (see: tragedy of the commons).”

    I see your point. However, the tragedy of the commons analogy only takes you so far on this issue, as the property at question would be privately owned. I do see where you’re coming from though. Interesting issue.

  • A Taxpayer

    You did not say that it would not be fair to charge people for leaving their property empty, only that it would be hard to do. Presumably, if there was a cost effective way of doing so, you would be for it. And you clearly supported an additional tax on flippers. This was the point of my comment – you clearly do not fit into either of these categories so are quite willing to implement a tax on those property owners.

  • boohoo

    “Presumably, if there was a cost effective way of doing so, you would be for it.”

    “Charging based on leaving it empty seems really hard to do and not worth it.”

    As in I don’t think it’s worth it as in I don’t support it. Stop with the assumptions pretty please.

    Again I tempered my flipping comment with the caveat that it’d be difficult and subject to a number of factors I haven’t fully thought out or am aware of.

    I know you really desperately want to live in a black and white world where you think x and I think y and it’s just as simple as that. Unfortunately, it’s not. And your insistence on labeling people into a tidy little ‘progressive’ box is intellectually dishonest and lazy and just annoying.

    Grow up and have real discourse about an incredibly complicated subject, or get lost.

  • A Taxpayer

    You still don’t get the distinction. You don’t support it because it isn’t worth it, not because it isn’t fair. Same for taxing flipping. The heart of the issue is private property and when/how the state should intervene in how people choose to use their private property. You believe that you have the right to rent your property on Airbnb (which I agree with) and others may believe they have the right to leave it vacant or sell it after owning it for a short period (which I agree with) yet you would tax them if you could.

    This is a complex subject which is no doubt why you are having so much difficulty with it.

  • A Taxpayer

    Land is not like air and water which is essential to life where not being able to afford Point Grey Road is not.

    That is not to say there should not be any regulation on the use of land or even requiring an owner to sell in the event of expropriation at fair market value. (Even in the case of stock ownership, there are occasions when shareholders are required to sell their shares whether they want to or not.)

    However, regulations that affect what people can do with their property are normally about the impact of that usage on other people’s property. In this case, the argument is that Airbnb makes property more expensive for others to purchase or rent. This is a very weak argument in support of regulation.

  • Tiktaalik

    Yes I regretted citing “tragedy of the commons” almost immediately after writing it. My intention wasn’t to use it as a direct analogy to this exact situation, but rather I included it purely as an example of a scenario where individually benefiting actions can be negative in a group context.

  • IanS

    Yeah, I understand what you are saying. The distinction really leaps out at you when considering possible ways the City might attempt to address the problem, if indeed there is a problem.

  • boohoo

    I do, you’re simply making assumptions about what I think again cause it’s easy to take pot shots. I’m done.

  • organmorgan

    Someone bought a large heritage house and its accompanying carriage house on our Strathcona block and now advertise both as full-time AirBnB rentals. The owner owns other full-time AirBnB properties around Metro Vancouver. Previously, an actual family lived in the house. There are three or four full-time AirBnB rentals on our block alone. To the extent that they displace renters and live-in owners, they’re hollowing out our community one space at a time. These are spaces that would house artists, pensioners, seniors, etc. It’s a real problem.

  • A Taxpayer

    If the apartment is a condo then owners can and do regulate the rental of suites through the strata corporation. As for renters in an apartment building, they never have any say over who the landlord chooses to rent to. It is a much bigger problem to have a bad full time neighbour renting next to you that you have no control over than an occasional noisy tourist.

    And why are you letting boohoo off the hook? He was previously renting his suite but has now selfishly taken it out of the rental pool because there is more money in Airbnb.

    Would it be okay if someone lives in a condo and owns a second suite in the building which they rent out on Airbnb?

  • Kenji

    To me, it is different when you actually live above your B&B guest in the same house. You are literally hovering over them, which exerts a certain inhibitory effect.

    And that is why my wife and I don’t use B&Bs!

    Re the difference between a bad fulltime neighbor and the odd noisy tourist: why I gotta choose? Both are antisocial and antithetical to the idea of living together in a shared building.

  • Kenji

    Uh, well maybe that is other people’s argument. My argument against willy-nilly land usage is that in this town, there ain’t much of it and I don’t think we can be trusted, sadly, to divvy it up amongst us owners (yes, I am one of them) in a fair and consistent way. The city is authorized and required to make land use decisions. Therefore, they should know how much of the land is for living in as a resident, how much is for renting as a hotel. Pretty simple.

    Specific to Air BNB, I can’t imagine that anyone in a strata who shares a common front door is thrilled about the idea of having an infinite quantity of one-nighters being given keys to that door. It is an obvious security concern.

  • A Taxpayer

    If the Strata owners do not want Airbnb rentals in their building then they can pass a bylaw prohibiting them just like they can prohibit long term rentals. This is not a valid argument to regulate Airbnb rentals.

  • A Taxpayer

    Is your concern about Airbnb the rental units it may displace or the effect of the undesirable aspects of tourists on the local community?

  • Kenji

    I want tourists. Tourism is great!

    I am against the city operating in the dark when it comes time to considering whether to approve a hotel project, and as a reasonably conscientious neighbor, I think it is inconsiderate and a yawning pit of potential liabilities to operate a hotel room in the midst of an apartment building.

  • Kenji

    Sure, if that works. My condo told me to get rid of my cats and I told them to GFT and send them a giganto package of constitutional law, etc, to baffle and deter them. It worked because strata councils are filled to the brim with dumb people.

  • A Taxpayer

    I suspect your neighbours just might prefer to share the building with an Airbnb rental to a suite infested with cats.

  • Kenji

    Two little cats is not an infestation. It is a quorum.