
Airbnb likely removed 31,000 homes from Canada’s rental market, study finds - bendauphinee
https://www.theglobeandmail.com/canada/article-airbnb-likely-removed-31000-homes-from-canadas-rental-market-study/
======
Tiktaalik
> Nearly half of all Canadian Airbnb revenue in 2018 was generated by
> commercial operators, or those who manage multiple listings, the McGill
> report said. Their share of sales increased from 2017 in nearly all metro
> areas. Among this group, there are some hosts that vastly eclipse the
> competition: Fifteen managed at least 100 active listings apiece in the past
> year, the report said, and nearly 60 hosts earned more than $1-million in
> 2018.

> It vastly differs from how Airbnb often pitches itself: as a personal
> platform through which residents, either out of town or looking to put a
> second bedroom to good use, will occasionally rent out their spaces.

> Often, the largest “hosts” are in fact businesses that manage vacation
> rentals on behalf of homeowners.

City of Vancouver regulations (as ineffective as they are) explicitly targeted
and banned these sort of commercial operators.

What does Airbnb's valuation look like if such a significant share of their
revenue comes from the sort of activity that is actively being banned by more
and more cities?

~~~
Analemma_
Much smaller, which is why AirBnB has to keep pretending "oh, it's just people
renting out their main homes while they're out of town" and that any kind of
regulation or crackdown on their business is only hurting ordinary people,
even when everyone including them knows that's a lie.

------
eljimmy
I really wish my city would ban Airbnb with the exception being that you must
reside in the household you are looking to rent out, as in, a literal bed and
breakfast.

Our rental market is absolutely cut-throat right now. Affordable rentals on
realtor.ca aren't lasting more than a couple days after they go up.

~~~
dkhenry
I would like to know if you think the problem is AirBnB or the lack of
building new houses. I find a lot of people who complain AirBnB drives up
rent, but also believe building more units won't push down rents.

~~~
Spooky23
You have supply and demand, both drive prices.

Airbnb changes the demand curve by letting residential zoned property be
commercial short term rentals. It also doubles down by undermining actual
hotels.

So you can react by saying just more houses. And I can react by saying “don’t
do Airbnb, which is often illegal anyway.” We’re both right.

Capital shouldn’t have higher preference over citizens.

~~~
dkhenry
There are a lot of people out there who argue that building more houses won't
help solve the high cost of housing. I have also found a lot of those people
complain Airbnb is driving up pricing. To not acknowledge the supply problem (
and the supply solution ), but to say the minimal change in demand caused by
Airbnb is the problem to me is just dishonest.

~~~
seanmcdirmid
Name one mega city with lots of housing where the prices have actually gone
down. It isn't rocket science: add more supply in a hot area, it attracts more
demand. Kind of like how building wider highways doesn't really do anything
for traffic jams.

Most cities would like to keep their growth in check somehow so they have the
appropriate infrastructure ready for it. Things that distort that (AirBNB,
Chinese speculators, etc...) throw all of that off.

~~~
cpitman
Induced Demand (ie "bigger highways leads to more traffic") depends on having
an alternative. IE, traffic can take a different route, people can take public
transit, people can stay home, etc.

It sounds like you are claiming that it is _impossible_ to out build housing
demand. This cannot be true. There is a finite population of people that want
to live in any one place.

~~~
Spooky23
You are correct and the argument you are responding to is evidence of the boom
period we are in.

The NY Metro area is the definitive example of what you are talking about.
Every lane of highway or bridge built increased traffic because it enabled
someone to get the house they wanted cheaper somewhere else.

Now, construction costs are too high and land is in tight supply. The result?
Infill of formerly blighted areas (aka gentrification).

------
mrosett
I'm genuinely baffled that so few people in this thread see no value in Airbnb
providing cheaper options for travelers. As a software engineer, one way I
could advance my career would be to move back to the Bay Area. An imperfect
substitute, though, is visiting regularly to maintain the relationships I
built when I lived there. (Indeed, I'm writing this from a plane while flying
there.) Being able to stay in an Airbnb for half the cost of the hotel makes
that more feasible.

~~~
sarcher
It's a mirror of the intracity highway issue. Access is improved for people
who don't live in a specific location, and the externalities of this decision
are dumped onto local citizens. The desirable location ends up hollowed-out,
as no more geography is generated but instead the existing geography sliced
away and allocated to visitors. They become destinations, more theme park than
city.

It's well accepted that the highway boom of twentieth century had a negative
impact on city life. That's why the Big Dig put that city-cutting highway
underground in Boston, and (one reason) why the viaduct in Seattle is going
underground, and why the I-93 corridor in Massachusetts became a public
transit route instead. Here's a longer list:

[https://en.wikipedia.org/wiki/Freeway_removal](https://en.wikipedia.org/wiki/Freeway_removal)

Transforming private residences into hotel rooms makes it easier to visit and
harder to live. Acknowledging this doesn't mean people don't like Airbnb, it
just means that both the positive and the negative impacts of their business
model are being discussed.

~~~
mrosett
For what it’s worth, I think I generate more positive externalities per day as
a visitor than when I lived there.

~~~
ryanbrunner
Perhaps on balance, but those externalities aren't shared by the city as a
whole - local businesses might benefit from you visiting, but individuals
living in the city are probably overall negatively affected due to increased
rent from tightened supply, lack of community due to increasingly more
apartments being rented out to AirBnB users, and other negative effects.

------
wedn3sday
> "Shared exclusively with The Globe and Mail"

Publish the actual paper or this is just vaporware nonsense. This is a non-
peer-reviewed paper with zero credibility, thats been seen by a small handful
of people. They could literally write a paper about the moon being made of
cheese and have the same credibility. They dont even make the source material
available in their article.

I dont want to sound overly critical, this looks like a legit finding that
matches up with my experience of the housing market, but Im completely fed up
with people publishing their "findings" without reporting where the data came
from and how they got to their conclusions. Until they publish the paper, this
should be dismissed out of hand. There's such a long history of people
completely messing up their statistical methodology that you cant believe
anything until you see the actual numbers/methods.

~~~
itsaidpens
The data they received is a competitive advantage and they are not under any
obligation to publish it. You don't need to, or are allowed to, extend your
demands of peer-reviewed academia to modern online journalism. Stop whining,
and address the claims of the article.

~~~
fuzz4lyfe
This is why they call it fake news.

~~~
itsaidpens
I just hate that pedantic comments like the original poster are the most
upvoted on HN.

The most upvoted comment on most articles isn't addressing the topic; it's
some sort of ridiculous analysis or criticism of process, or an embedded piece
of javascript, or whatever.

~~~
chongli
I happen to appreciate this style of comment on HN. We live in a frenzy of
sensationalism. Why can't we have a devil's advocate to remind us of the most
common, basic mistakes? It's like a compiler that catches null-pointer errors
for us.

------
Tiktaalik
This trend of professional Airbnb operators renting new condos as a business
is part of the explanation for why land values in Toronto and Vancouver have
spiked and distorted beyond local incomes.

A person can make substantially more money renting short term to a tourist
than they can to a long term tenant, so accordingly the land valuation is less
and less based on the underlying assumption of land being rented long term to
a person that can only afford what a local income provides.

~~~
dorchadas
It's a huge issue in Ireland, too. Houses in Galway and Dublin are hard to
come by partially (there are other factors, of course) because AirBnB
operators can make more renting to the tourists for the summer than to locals
for a year. With less to worry about, too (not to mention all the taxes they
likely aren't paying). Furthermore, it also destroys the communities. See
Barcelona for examples of that.

------
9387367
The same happened in London and I lived through it, saw this happening in my
neighbourhood, but the thing is, nobody cares. Every single person I brought
this up with dismissed it as a non issue.

Those flats on Airbnb have to come from somewhere and there are rental
agencies that specialise in managing properties exclusively for Airbnb, none
of this existed before and some of those properties were taken from the long
let market, which would drive prices up.

~~~
ng12
It's a matter of scale. How much does AirBnB inflate price versus overly
restrictive zoning and NIMBY laws? AirBnB is just easier to rail against
because it's a private company.

------
jseliger
If only we had some technology that could increase the number of housing units
on a given piece of land; such a technology could allow us to build as much
housing as people want to occupy.

Too bad this has to remain a fantasy. [https://www.vox.com/a/new-economy-
future/urban-sprawl-housin...](https://www.vox.com/a/new-economy-future/urban-
sprawl-housing-costs-solutions-elevators)

~~~
swiley
You don’t even need elevators. In most cities it’s possible to build and
maintain small concrete rooms in a single story structure with an exterior
wall and make a profit renting them out for less than ~$40/month. The issues
come from zoning, rent seeking, and regulation.

~~~
LeifCarrotson
You're speaking of storage units, correct? Not habitable structures?

~~~
nine_k
Have you ever seen a typical apartment in downtown Tokyo?

~~~
marak830
While I agree with your point, I have. I do have an elevator and eevry
apartment building (and business I have worked at), has an elevator.

------
RocketSyntax
Thoughts: 1) It's just basic free-market supply and demand. Landlords own
property to make money, so if they want to take a risk in short term rentals
they should be able to. 2) I would love to live in a double-wide shipping
container... actually that's probably bigger than what I have now.

------
thehappypm
People rarely discuss the positive impact of AirBnB: boosting the number of
tourists. I wonder how much additional tourism spend and tax revenue the city
is getting from the influx of tourists. Hotels aren't closing down; AirBnB's
just make traveling easier.

~~~
dorchadas
Is an increase in tourists really a positive impact? Sure, they bring more
money to the city, but there's lots of downsides to it as well, especially
when they stay in AirBnBs. See Barcelona, for example.

For the record, I'd almost say increased tourism in most places isn't a net
positive.

------
jumbopapa
It's interesting to see how the Airbnb market has evolved. I used to always
hear that "Airbnb is cheaper", but lately when booking trips I've been able to
find better deals in hotels.

------
segmondy
What will happen when the market contracts and people don't travel much? I
know a couple in Canada that have acquired 7 homes in the last few years
strictly for Airbnb rentals.

~~~
loceng
The thought with a few commercial Airbnb people I know is that, at least in
major Canadian cities, the demand for living in Canada won't allow this to
happen. What's more likely are controls that will be put into place to extract
more of the profit, making it less profitable to run such a business, in order
to fund displacement from gentrification and low-income housing projects. This
is however one of those invisible beasts that has enough people + Airbnb as an
organization aligned to lobby politicians to push back against any legislation
that will harm their profits.

------
lixtra
The numbers have to be seen in relation to 250.000 immigrants (2012) that
occupy a larger amount of flats each year. Also this pool of AirBnb flats
offers flexibility for people who didn’t find a long term apartement yet and
home owners who want to reshape these homes.

~~~
bobbyT314
The number of immigrants admitted to Canada per year is very stable and only
slowing rising. On average it has been between 200-300 thousand per year for
at least the past 20 years. This is not the driving force of lack of housing,
and is a driving force of a stronger economy with the introduction of skilled
labour.

[https://www.statista.com/statistics/443063/number-of-
immigra...](https://www.statista.com/statistics/443063/number-of-immigrants-
in-canada/)

~~~
Veen
I can't see how immigration can be considered to have no impact on available
housing. People have to live somewhere and if there were fewer immigrants,
there would be more housing stock for non-immigrants — unless you believe that
immigration causes houses.

It's perfectly possible for immigration to be a net positive for the economy
and for it to have negative affects on the availability of housing.

~~~
bobbyT314
Of course it has an impact. But it is likely not a dominant one or we'd have
experienced the housing crises we're seeing now, long ago.

~~~
Veen
There are approximately 14,072,080 occupied private dwellings in Canada. The
rental of 31,000 of them on AirBNB is unlikely to be a significant factor in
the housing shortage.

[https://www12.statcan.gc.ca/census-recensement/2016/as-
sa/98...](https://www12.statcan.gc.ca/census-recensement/2016/as-
sa/98-200-x/2016005/98-200-x2016005-eng.cfm)

As the article states, 31,000 is 1.5 percent of rental accommodation. If we
assume that half of the 300,000 immigrants rent, and that they tend to rent in
couples, that's 75,000 rental properties consumed by immigration each year --
or about 3.5 percent. That's an additional 3.5 percent of rental housing stock
each year, a much faster increase than the number of AirBNB rentals.

Regardless of whether you think immigration or AirBNB are major causes of a
housing shortage, it's disingenuous to argue that immigration has less of an
impact than AirBNB.

EDIT: It's also worth noting that construction is expected to slow over the
next five years, whereas immigration is expected to grow.

[https://www.cbc.ca/news/politics/immigration-
canada-2018-1.4...](https://www.cbc.ca/news/politics/immigration-
canada-2018-1.4371146)

[https://www.on-sitemag.com/construction/end-of-an-
era-20-yea...](https://www.on-sitemag.com/construction/end-of-an-era-20-years-
of-almost-uninterrupted-construction-growth-poised-to-slow/1003962031/)

------
SilasX
Sorry for the Joker meme, but we really have a double standard here.

\- Crappy local policy prevents creation of 300,000 housing units: nobody
panicks.

\- Startup removes 30,000 housing units from the market: everyone loses their
mind!

~~~
wvenable
Given that construction is effectively non-stop in Vancouver, this is a
bullshit post.

~~~
SilasX
It’s not 300k homes though, and the relevant comparison is to what _could_
have been. The existence of some construction is not a refutation and does not
make the government’s role “bullshit”.

~~~
wvenable
It's not "some" construction though.

------
fjabre
I've had mostly negative experiences with Airbnb over the years.

My neighbors airbnb their house every weekend. So nice loud music and rude
guests to deal with fairly often. Of course why not? They are not accountable
to rest of us full timers in my neighborhood.

My place was broken into by someone who stayed at it before using Airbnb.

One guest almost started a fire and had to be removed.

Checking in and out of airbnbs can be a bit of a nightmare. Everyone has their
own process for checkin.

Airbnb destroying local real estate markets is no surprise. They've been doing
it for several years and getting in trouble for it for several years.

Growth at all costs - no matter what it does to local markets or people's
lives. I'm sure their impact on local economies is the least of their concern
until the governments attached to those economies start to speak up.

~~~
sfsfsf6666
It's long term renters that increase the probability of issues/squatting/ill-
maintenance cropping up, and generally start a long term degradation of the
neighborhood. Long term renters also seem to buy ridiculously overpowered
audio systems, and run them in such a way that one can hear the thump-thump
bass, a block away. Not to mention they often pack like sardines into a place,
and then you have 4 or 5 autos per residence.

~~~
fjsolwmv
You are describing young, single people, not long-term renters.

~~~
dsfyu404ed
"How dare those uncouth young people not abide by my arbitrary standards of
class that I expect the neighborhood to meet"

I don't see why people are so bothered by what other people do. Any normal
community is going to have people doing things and some of those things make
noise, smell or sound.

------
jpollock
I'm guessing the number of short-term people hasn't changed (except for
population growth), so what impact has this had on hotel occupancy rates?

~~~
ncphillips
Anecdata, from people I know working in hospitality, is that they're going
down, and hotels are definitely being threatened by AirBnBs

------
mrosett
If property owners can make more money renting out properties on Airbnb, that
suggests short term rentals are the highest value use of that property. I
derive a lot of value from using Airbnb when I travel, particularly in markets
with housing shortages. If an apartment can host a hundred visitors a year, is
that obviously worse for the city than renting it out to a single person?

~~~
snarf21
I think the main issue is that there are laws related to hotels and there are
laws around renting/leasing and there are laws around owning houses. The
"short term rental" category gets to bypass all these regulations and that is
the exclusive source of their margins. Once government constructs rules around
short term rentals, the advantage goes away. It is also interesting that the
focus of these discussions is never really balanced. It is always why it is
bad for home owners or would be renters OR exclusively why it is great for
consumers who get to pay less, etc. These things are complicated and it will
take slow governments more time to adapt to the changed world.

~~~
mrosett
> The "short term rental" category gets to bypass all these regulations and
> that is the exclusive source of their margins

I agree in part and disagree in part. I do think that regulatory arbitrage is
part of what makes Airbnb, Uber, et al valuable. I don't think it's the
_exclusive_ source of their margins. They generate a lot of value through
creating a liquid 2-sided market.

~~~
snarf21
Not disagreeing, but aren't classified and brokers and apps like
apartments.com already a liquid 2-sided market? If what you are saying is that
they create a liquid market for short term rentals where that didn't exist
before, then I agree but again I think that is a lot less liquid when
regulation gets applied.

~~~
mrosett
They definitely are. I’m saying Airbnb will be valuable for the same reason
they are even as regulation limits their market.

------
sokoloff
AirBnB perhaps _moved_ that number of units from the long-term rental market
to the short-term rental market.

------
LoSboccacc
rental market is a distortion anyway, things are foobar because ownership is
getting harder and harder, creating a whole generation of renters-for-life,
but the solution lies not in affordable rents, it's affordable housing where
is at.

------
bparsons
I always wonder why the same argument isn't applied to hotel rooms. If the
government forced every hotel room to be converted to affordable housing, the
homelessness problem could be solved overnight!

~~~
yifanl
Because hotels were originally zoned for short-term rentals and operate as
short-term rentals.

AirBnB properties were originally zoned for long-term housing and operate as
not-long-term housing.

------
xutopia
No it hasn't. A lot of homes are rented out through AirBnB now because it's
the way to be found. It also guarantees payments.

~~~
parthdesai
What are you talking about. No one is renting a long term unit, i.e. signing
an actual lease on airbnb, at least here in Toronto.

------
hourislate
I have a feeling 99% of these homes they are referring to are condo's in
Vancouver and Toronto (VAN,YYZ are the condo building capitals of NA). A lot
of these units are owned buy foreigners or as investment properties. According
to a real estate friend, some Chinese have purchased entire floors of these
buildings to park capital fleeing China. I know that many buildings in
downtown Toronto can be up to 50% AirBnb rentals.

Coincidentally, I spoke with someone on the weekend who can't take it anymore
and wants to sell their unit or put it to work as an AirBnb because of the
amount of prostitutes, drug dealers, etc using the building as short term
rentals through AirBnB.

Canada really needs to get a grip on foreign ownership. 10's - 100's of
billions of capital outflows over the last decade from China, Hong Kong, Iran,
etc have created a tough environment for the local population. Co-op's could
possibly solve this problem by creating rules where short term rentals,
foreign ownership, etc are not allowed. Although it's tough to get a mortgage
for a co-op condo.

~~~
john_moscow
Vancouverite here. The biggest trouble is that our economy now really depends
on that dirty money. The biggest sector of the BC economy (almost 20%) is real
estate and the next one is construction with 8%. So banning that would mean
losing roughly a third of the budget income, let alone most mortgages going
under. On the other hand, continuing it would make property ownership pretty
much out of reach for anyone without external capital flowing in. Tough spot.

~~~
harryVic
You make an assumption that foreign money is entirely funding those two
industries which is untrue. Vancouver is the most desirable city in a country
with 36 Million people, so it makes sense for real estate to be expensive
there. And new immigrants want to live in lower BC because it is warm here. I
am an immigrant and I live in Victoria. It doesn't matter how much more I
could make in Calgary, I don't want to spend 9 months of a year shoveling
snow.

~~~
seanmcdirmid
So Vancouver is a nice place to live, but so is nearby Seattle. Does Vancouver
deserve to be more expensive than Seattle rent wise? No, at least as a tech
worker, the salaries just aren't there.

~~~
harryVic
Moving to Vancouver from another country is much easier than moving to
Seattle. And Seattle is considered to be a city with a bad weather in the US.
That bad weather is actually considered good here in Canada.

~~~
seanmcdirmid
A lot of techies from Vancouver are working in Seattle under NAFTA TN visas,
which are pretty easy to get.

~~~
Macross8299
It is not surprising considering how similar Vancouver and Seattle are and
considering that the Vancouver mayor openly brags about how low tech salaries
are [0]

[0]: [https://nationalpost.com/news/canada/city-of-vancouver-
criti...](https://nationalpost.com/news/canada/city-of-vancouver-criticized-
for-boasting-about-low-pay-of-its-tech-workers-in-amazon-hq-bid)

------
marcrosoft
The title is misleading. There's nothing to see here folks. Airbnb _only_
rents properties. Nothing has been removed. The owners of the properties are
probably making more money with short-term rentals than long-term. Everyone
involved with the transaction is acting rational.

~~~
herodotus
When people live and work in a city, and if they cannot or do not want to buy
a property, they are looking for a rental agreement that typically guarantees
them a place for a year, and is renewable. This is completely different from
an Airbnb rental. For owners or rental units (such as basement suites), much
more money is to be made with Airbnb, because people who are staying for 5
days pay rates that are was higher than the typical yearly rental fee for the
same place. So of course many owners go the Airbnb route. And those units are
lost to the other rental market. For my city (Vancouver) this has contributed
to the housing market pain that exists here. And it affects real people in
real ways. There is plenty to see and think about here.

~~~
marcrosoft
> When people live and work in a city, and if they cannot or do not want to
> buy a property, they are looking for a rental agreement that typically
> guarantees them a place for a year, and is renewable.

I had to stop here.

1\. It is not always the case but that person (fortunately) has the freedom to
choose another location.

2\. Guarantees don't really exist unless you are talking physics theory and
even that sometimes surprises people.

> much more money is to be made with Airbnb, because people who are staying
> for 5 days pay rates that are was higher than the typical yearly rental fee
> for the same place.

You made my original point. This transaction is a win-win for both parties
involved.

The rest of your argument centers around stifling this transaction to
subsidize an artificial-non-sustainable market.

Yes, this effects real people in real ways but they need to take _personal_
action and do what's best for them personally instead of effecting change on
the rest of the area.

~~~
mikehodgson
So it's alright for one group to affect change on the area, but not the other?

We should just suck it up, let foreign investors buy up property to rent to
other foreigners, and commute a couple of hours to work every day instead?
Canadians are polite, but we're not THAT polite.

------
itsaidpens
Anyone have any thoughts on Montreal?

~~~
xutopia
I have a friend who rents out an apartment long term on the south shore
through AirBnB. It works out to about the same price as he would get from
renting out long term through ads but the process is actually easier for him
with the platform than posting ads and answering phone calls.

I have a basement apartment that my friend rents out and when he goes on trips
he rents it out. If he leaves I would consider AirBnB even if long term
because it would save me a lot of trouble.

~~~
itsaidpens
I just love the city, and I'd like to buy a property there.

~~~
33degrees
It's not the greatest market for buying right now, which has led to an
increase in the number of renters and extremely low vacancy rates...

