Airbnb likely removed 31,000 homes from Canada’s rental market, study finds | Hacker News Reader

Airbnb likely removed 31,000 homes from Canada’s rental market, study finds

theglobeandmail.com

108 pointsbendauphinee153 comments

> 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?

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.

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.

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.

AirBnB causes damaging housing economics more rapidly than building more units can alleviate them. Is building more units a (long term) solution? Yes. Is banning AirBnB a solution? Also yes.

What seems strange to me is the idea that tourists and small time local economic actors profiting handsomely from short term rentals should take priority over a majority of local citizens. If citizens don't like your plan, out your plan goes (very similar to how California residents keep killing upzoning).

If you're a local citizen and want to put a wrench in short term rentals, engage in the political process. Go to your representatives and tell them to enact legislation to do so if that's what you want, and if they won't you will assemble with other local citizen voters and vote them out. That's democracy.

I can't speak to the nature of the Canadian market, but in the bay area where people also say banning AirBnB will help I always like to remind people that there are approximately 7,000 AirBnb units in SF[1], and there is was an estimated housing shortage of 300,000 units in 2016[2]. Even if you outlawed all AirBnb listings, it would not change rent prices at all, its a rounding error on the shortage of available housing.

1. http://insideairbnb.com/san-francisco/ 2. https://en.wikipedia.org/wiki/San_Francisco_housing_shortage

I'm sure it would matter to the local residents who could occupy those units of course (excepting shared tenancy with an owner/renter, arguably a fair use of AirBnB in extremely tight housing markets).

> AirBnB causes damaging housing economics more rapidly than building more units can alleviate them

Are you implying that it's impossible to construct an additional 31,000 homes across all of Canada?

Are you assuming that Airbnb and demand for housing is somehow spread 'across all of Canada'? Are you also assuming that the new 31K homes (if you manage to build them) won't also just become Airbnb fodder?

They could be built anywhere (yes, even Toronto and Vancouver) as long as the political will is there.

If 100% of those units were converted into AirBnB that's another problem: why is the demand for short-term rentals so much higher than long-term ones? Again, not really AirBnB's fault.

I wouldn't say that the demand for short-term rentals is so much higher than that for long-term ones. I'd say that landlords know they can make a lot more money with short-term rentals, and that's why they do it. The rentals don't even go to the long-term market.

I know that's partially the case in Ireland of why it's so hard to get housing. Landlords can make a full year's rental salary over the summer with AirBnB...Why rent long-term when you can do that?

Replacing cheap hotels with Airbnbs is like replacing buses with cars. Pretty soon you run out of room on the road. The problem isn't that we aren't building more roads or cars, the problem is the cars are space-inefficient. By using buses, we decrease the amount of road used per person, which eases congestion, and lowers cost (buses are much more cost-effective per person per mile than cars). So we don't need more houses, we need more (and cheaper) hotels. This would reduce demand for Airbnb, and thus reduce the number of homes bought explicitly to rent out.

But of course, who's going to pay for them and run them well? The nice thing about Airbnb is it created a competitive market, mechanisms to eliminate bad actors, customer service, price adjustments, insurance, and so on. You wouldn't get those things with a couple of hyper-efficient hotels. So it almost seems like we need the state to build the structure, and then allow people to bid on owning the rooms, and then renting them out on Airbnb. That way there could still be competition that drives all the useful features of Airbnb, but in a much more efficient form than the completely inefficient use of land that buying houses results in.

Airbnb doesn't replace cheapo hotels. It replaces expensive hotels. People go to airbnbs because hotels are too expensive for them.

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.

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.

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.

Chinese speculators reduce growth by keeping property vacant. Airbnb doesn't affect growth.

House prices are not growth, and they generate the tax revenue that you say helps get the infrastructure ready.

Building more supply to keep up with demand, no matter how real, would be growth.

Induced demand is not an infinitely scalable effect. There is some point at which adding more lanes will in fact reduce traffic congestion (ignoring logistical issues with extremely wide roads, which isn't the point of the induced demand argument).

With housing, the induced demand is mediated by housing prices. More housing lowers prices, which attracts more demand, which raises prices. But it's not going to raise prices above where they would have been had no new housing been built. (If prices were higher in the more housing scenario, what's stopping the person who moved to the city at those higher prices from moving in the less housing scenario?)

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.

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).

So what you just claimed here is that adding more supply attracts more demand. With that logic by removing supply we reduce demand. So Airbnb would be reducing demand, especially on infrastructure since part time residents don't use the most expensive infrastructure ( schools ).

Also there are cities where housing prices have stayed in check, and generally they have done it by building more supply. Here is a ink to a graph that show the difference between Dallas and Atlanta and San Francisco ( https://fred.stlouisfed.org/graph/?g=oe8E ). For reference Atlata had over twice as many new units constructed per year as San Francisco with half the population. This is why I say denying the supply side fix is dishonest. There is no reasonable measure where what you claim about supply attracting demand is true.

Eventually it would right? If rents shoot up and people can’t make a living at it in that city, they will simply go elsewhere. AirBNB also doesn’t need public schools or the other businesses and services that are dedicated to residents, so those would go away also (and do in Airbnb heavy areas).

Dallas and Atlanta are nit great examples, as they basically have unlimited land to expand on.

> building more houses won't help solve the high cost of housing

It won't:

> Building enough housing to roll back prices to the "good old days" is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse.

https://experimental-geography.blogspot.com/2016/05/employme...

Unless we do something dramatic and Bucky Fuller-istic like...

https://www.berkeleyside.com/2018/08/02/prefab-housing-compl...

It will and your links even say that

> If the (first) model is correct, it would take a 53% increase in the housing supply (200,000 new units) ... to cut prices by two thirds

There is no reason you couldn't build that many new units over a ten year period. In fact if San Francisco increased its construction to match D.C. it would have that many new units in less then a decade

edit: Just to clarify, the only limitation is political. People don't want to allow the construction required and would rather pass protectionist laws that effectively lead to the Housing and Homeless crisis you see in SF and LA. In so much that you can convince Rich San Franciscans that those poor people they keep saying they care about should be able to have a reasonable path to getting housing you could fix it in less then a decade

Assuming the model has that predictive power is there really the physical capacity to build that much without adopting radical methods like the instant dorm? And if there is, is that really the best option?

One the one hand, I grew up in SF and it's been hard coming to terms with the idea that I'll never be able to own my own home here. At this point I'm just glad that there's still (relatively) cheap land in the eastern part of the state.

One the other hand, I don't want the city I love to be changed for the worse by rampant growth with the admixture of profit-driven decision-making to make the situation even more complicated. I've already got the futureshock[0], I don't think more-of-the-same accelerated 10x would result in a great place to live.

One the gripping hand, I'd love to renovate the mega-structure of the Bay Area, clear off and revitalize the old creeks and replace the lost housing with arcologies[1].

[0] https://en.wikipedia.org/wiki/Future_Shock

[1] https://en.wikipedia.org/wiki/Arcology

If you don't assume the model has predictive power, then why bother listing it as a source? The real issue is what you say in the second part of your comment, people don't want the city to change. So in an attempt to live in a world that doesn't exist any more they try to hold back change and hope Prop 13 will allow them to wait out all the interlopers.

The city has changed and its a hellscape. No one can live there unless they bought their house in the early 90's or before. Teachers, Police, Firefighters, and every other kind of public servant is paid below the poverty line for the city they are supposed to serve. Low income people are forced further and further out, and entire economic sectors are starting to experience people insolvency. The city is being slowly turned into a monoculture of tech workers, and office buildings. The only thing the people of the city can bring themselves to do is try to legislate ever more controls on change and try to keep the city in some sort of 80's time warp. However they just banned selling e-cigarettes, and passed a law making sure the government doesn't use facial recognition software so I guess they don't feel the crisis of homelessness or high rents is something that should be given their attention.

> If you don't assume the model has predictive power

I am assuming that for the sake of discussion. Part of the reason I link to that article is because the author seems to me to be data-driven and careful about how much you can accurately predict from the data he collected and analyzed.

> people don't want the city to change.

I can't speak for everyone, but for me it's not about preserving the city in amber, I don't want it to become like Manhattan or Tokyo. Like I said above, I want to make cool high-tech arcologies and revitalize the ecology of the Bay.

> The city has changed and its a hellscape. No one can live there unless they bought their house in the early 90's or before. Teachers, Police, Firefighters, and every other kind of public servant is paid below the poverty line for the city they are supposed to serve. Low income people are forced further and further out, and entire economic sectors are starting to experience people insolvency. The city is being slowly turned into a monoculture of tech workers, and office buildings.

You're preaching to the choir here brother. You left out the traffic and insane drivers.

> The only thing the people of the city can bring themselves to do is try to legislate ever more controls on change and try to keep the city in some sort of 80's time warp. However they just banned selling e-cigarettes, and passed a law making sure the government doesn't use facial recognition software so I guess they don't feel the crisis of homelessness or high rents is something that should be given their attention.

Yeah, SF city politics is a shit-show. Everyone is so busy being Progressive that they can barely make any progress. (You like that line? You can use it. ;-) But you're being unfair IMO. I watch SFGOVTV and I can tell you that people are very much concerned about and working on homelessness and out-of-control rents (along with a lot of other weird stuff. Like "Legacy Businesses", what's up with that? I'm kind of a lefty and even I feel that that's "commie-pinko" level economic meddling. But then again, I like most of the businesses that get on the registry and receive money. I can't really hate something too much that if it helps them stay viable through the rough seas. But then again again, it's such a blatant political machination: you have to get a Supervisor to sponsor your business to be considered. Or what about this new system they're rolling out to make homeless people use a special card and account with the city to receive any help. Orwellian surveillance is fine if we are using it to help them, eh? Or the police whose job it is to board buses and trains and "check your papers" to make sure you're not evading fare. That's not progressive, it's imperial. What would be progressive is making the buses free to ride. Or doing like in Seattle: it's not the drivers' job to collect fares. You can ride the bus in Seattle without paying. You're supposed to, but if you're broke you can just mumble an apology to the driver and ride anyway.)

Er, um, rant over. Sorry about that. SF city politics is a hellofa drug...

Anyhow, we need to come together and think clearly about things to solve any of this. We have to balance growth (population and economic) with quality of life, advances in technology, ecological harmony, international politics and financial stuff, etc...

No way. Who is going to fund billions of dollars of construction that will crash the market? Nobody.

Commercial real estate is about cashing in quickly and selling shares of accelerated depreciation. Not gonna happen.

Woke rich people will continue to feel good about not chasing off the homeless people sleeping behind the garbage can and cash in. When the market tanks, they’ll walk away.

> Airbnb changes the demand curve by letting residential zoned property be commercial short term rentals

Sure, but how big is that change? The article references 31,000 homes in a country of 37 million people. If you assume the average of 3 people per home that's only "displacing" ~0.2% of the population.

That's not even correct way to look at it. Airbnb's tend to be concentrated in more nicer residential areas, where if you can afford, you want to rent.

I'm not sure what your point is.

You are taking into account the entire population of the country while calculating the displacement of the population, while Airbnb units this article is referencing tend to be concentrated in certain neighbourhoods of certain cities. Your calculation is off by a mile.

Why are you assuming the distribution of AirBnBs is significantly different than the distribution of Canada's population?

Do you actually believe that you have equal amount of Airbnb's in Jane and Finch compared to Entertainment district even though population in the respective areas might be comparable?

Again really not sure what your point is. If you can't afford Entertainment district move to another one -- unless you're arguing that AirBnB is the reason why the Entertainment district is expensive.

It’s clearly increasing the price over what it would be. Just because X is affordable does not make X + a little bit more affordable.

So, now you not only displace people from that location you want the displacement to casecade across the rental market forcing large numbers of people to have a worse commute and or pay more in rent. Perhaps some people could possibly have a major problem with that idea.

PS: You can actually just search locations on Airbnb it’s rather concentrated magnifying this impact.

Airbnb is a part of the reason. There are studies out there that show that the rents in nicer neighbourhoods have gone up more than the average increase in the city. It is easier for the landlords to Airbnb the unit and make more money compared to renting it out long term. This decreases the supply of available long term units, which in turn increases the rent. Now is Airbnb the only cause for increase in rental prices? Hell no, but it definitely is a catalyst. I do think that Airbnb is beneficial if it was used the way it was meant to be, but it just has become another investment avenue for the rich now while fucking over people who actually work and live in the city but can't afford to buy a place.

Airbnb’s tend to be near central business districts or other attractions.

If by offering short term rentals you take 30% of the rentals off the market (which may only be 100 apartments), that has a huge impact. Rental prices are all about marginal demand.

There are other factors as well — there is a de facto price floor due to section 8 prevailing rent. Because of factors like the “just build” doesn’t work, as profitable new construction is high-end, and the older stock tends to turn into defacto hotels.

Building more units might push down rent, but that assumes that the increase in housing supply won't be offset by owners who will simply convert those new units into more Airbnbs.

If landlords think short-term rentals are better for business than lease-based tenancy, then the amount of housing that would need to be built is much higher than demand.

Hopefully some regulation will be enacted as a result of this study but I won't hold my breath. Way too much money to be made by banks and RE agents in artificially restricting supply.

Its only as high as the amount of demand for _both_ of those things. It may be that landlords convert some percentage of units into short term rental units, but even that has a limited return on investment. There are only so many people that are going occupy those short term rentals, so even if you kept the price of them the same the decrease in occupancy is going to hurt enough to limit the total number of units going onto that market.

> Its only as high as the amount of demand for _both_ of those things.

What if it's in a major international tourist destination?

It doesn't matter. If you doubled the number of housing units in New York City you'd crash the real estate market there. It would suddenly become laughably cheap to live there. Even if they all became Airbnbs competition for tenants would drive prices for those short term rentals to basically zero. And if you don't believe it for doubling the housing units, try tripling, or 20x. Don't let me hamper your imagination.

I think it's both. There's a few different situations with AirBnb

1 We had surplus housing. AirBnB would (probably) be fine from an availability perspective.

2 We have adequate housing. AirBnB would still not be good. A good portion of the available places for long term rent would be taken up by short term tenants and would drive up prices.

3 We have not enough housing. AirBnB same effects as 2, but even more so.

It seems to me that we live in situation 3. We need to build housing AND curb the excesses AirBnB. Just building more housing won't fix the problem. Just banning AirBnB won't suddenly give us an adequate housing supply.

If you had surplus housing, Airbnb would not exist because there is no point.

I think it would exist for it's marketed purpose: to let people stay in a city they don't live in for a short period of time (a week or so).

I don't think anyone is going to get a lease somewhere just to visit.

I think it's a combination of many factors, for sure. Definitely also being impacted by the tighter mortgage regulations that our government enacted recently.

It's also really unfavorable to be a landlord (at least in Ontario) as it's possible for a tenant to take up a lease and not pay for almost an entire year while you legally evict them. So I suppose it's understandable why people prefer to AirBNB their units, aside from making more money.

Really shitty situation all around.

I admit that eviction situation sounds difficult for landlords. I know I would be frustrated if I was a landlord in that situation.

Do you have evidence that the eviction issue is wide-spread enough to cause landlords to prefer AirBnB-ing to renting?

It looks like city centers have the highest density of AirBnBs. I find it hard to believe that people renting in city centers (let's be honest these are usually luxury apartments) not paying their rent are so frequently that the only recourse is for the landlord to turn to AirBnB to turn a profit.

To me, it seems the profit motive is a more likely explanation. The landlords have the ability to long-term rent, or use AirBnB. They _choose_ to use AirBnB because it is more profitable.

>that the only recourse is for the landlord to turn to AirBnB to turn a profit.

Just playing devil's advocate, but that assumes that the landlord didn't factor those things like eviction law into their decision of what type of property to buy and where to buy it.

Maybe the landlord made the decision between buying a rental property in a suburb and buying an AirBnB property in a city center and decided that the former case was infeasible due to eviction laws.

For instance, you can buy a small apartment building in metro vancouver for 2-5 million CAD. Same price as a couple of luxury apartments downtown.

It's also things like Invitation Homes. They buy hundreds of thousands of houses and charge really high rents (even in areas where it makes you scratch your head how they can charge that much), they also have a guaranteed 5-6% rent increase each year you stay. So renting from them is never a long term possibility, you will always eventually hit a point where the rents just too high and will be forced to move.

It is more likely that IH knows the rental market price and you don't. 5% growth per year is totally normal in desirable areas . It's lower than real estate appreciation.

I don't think so? First, if that were true they wouldn't be significantly higher than other houses in the neighborhood if that were true. Also, In 15 years of renting I've never had a guaranteed rent raise - ever. Rent only rose when the market made a raise make sense. Guaranteed regardless of the market is not normal in residential renting in my area.

I'm not sure if you live in Toronto or Vancouver or elsewhere, but I have noticed a lot of comments like yours are from Bay area residents. It's a valid comment for the Bay area, but not in Canada where the nature of the situation is quite different. In Vancouver the construction industry has been going more or less full throttle for the past decade or more, and the city is being continuously rezoned for higher density. Supply is still short but it's not for lack of construction.

Increasing supply isn't always a silver bullet. Rent prices are a huge problem in places like Toronto, where there is a tremendous amount of new multi-unit residential development.

Average price of 1 bedroom condo in TO now is like $2100/month. Given the salaries here, I don't think it's affordable to a lot of people anymore.

Why should a city have the right to tell a house-owner what they can do with their house and what not? In order to satisfy other people who want to live in said city and want to pay less rent?

Are you ideologically against the right of private property in general, or only against the specific right to own houses?

Please don't take HN threads into ideological flamewar. We've already had to ask you this.

https://news.ycombinator.com/newsguidelines.html

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.

Kind of a double-edged sword. It makes it easier to visit, but more difficult to live there if you do land a job:

In New York, for instance, Airbnb directly accounted for a US$380 increase in median annual rent costs, according to a separate report from Prof. Wachsmuth last year that was funded, in part, by a hotel-industry organization.

Things that hurt the local population to benifit other people are rarely well liked.

It's similar to how you'd conclude no one was using Uber from reading the equivalent threads.

Not many people want a lot of tourists in their town.

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

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.

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

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.

> "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.

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.

This is why they call it fake news.

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.

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.

But surely without the original data, it's impossible to judge the accuracy of the report. How can one address the claims of the article without any idea whether its conclusions are justified? People have a justified skepticism when it comes to online reporting: it is not unusual for media outlets to take a skewed, partial, or plain incorrect view of a piece of research.

> Stop whining, and address the claims of the article.

How can you possibly do that when you can't see the raw data and methodology yourself?

We've banned this account for repeatedly breaking the site guidelines and posting unsubstantive comments, and ignoring our requests to stop.

https://news.ycombinator.com/newsguidelines.html

It's not unusual for a publication to have early access to research if they're writing a detailed piece about it.

The lead author has said that the paper will be available for download tomorrow: https://twitter.com/dwachsmuth/status/1141665262065860608

The G&M article says it's a peer-reviewed study and fully funded by the federal government, so the likelihood of moon cheese methodology is low.

The number of untrue conspiracy theories promulgated by the mainstream media is high enough that I like reading things for myself instead of getting the pre-digested version.

The author also published a short summary of the findings in a link on his twitter as well, which includes a GitHub link to some of the code used for the analysis and figure generation (no data though). It's worth a read.

One of my favorite sayings is, "trust in Allah, but tie up your camel." The author seems legit, and the article is well written, but unless we can check the work and see the numbers its much better to assume moon-cheese then to just blindly trust whatever you're being told.

RTFA. You are getting basic facts wrong.

>In the past, Prof. Wachsmuth has done consulting work and produced reports for governments, and civic and business groups, including a hotel-industry association. This study, which has been peer reviewed, was funded solely by the federal government, however.

How can the two statements, "Shared exclusively with" and "has been peer reviewed" both be true? Just saying something has been reviewed doesnt mean anything, there's no citation or even the name of the Paper or journal it was published in.

It's a term of art in journalism, it has nothing to do with anything related to the circumstances behind the study or its release

>Publish the actual paper or this is just vaporware nonsense.

Even without the data it's not non-sense. It's a pretty rational hypothesis. Being rational definitely doesn't make something right, but it's about as far away from non-sense as you can get.

> This is a non-peer-reviewed paper with zero credibility...

All right, all right, perhaps we can we have some respect for other professions around here?

You know the human world isn't the robot world, it's not built on 'data' it's built on relationships, agreements and good faith.

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.

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.

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.

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.

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...

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.

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

Have you ever seen a typical apartment in downtown Tokyo?

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.

Primarily to support nine_k down below, wtf are you smoking. I've yet to see a wheelchair user climb stairs. As for the remainder of your comment, I'll leave that low hanging fruit to dangle.

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.

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.

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.

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.

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.

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.

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.

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...

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.

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.

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...

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.on-sitemag.com/construction/end-of-an-era-20-yea...

Ok, so admit 31,000 fewer immigrants and the AirBnB problem would go away, right?

Rallying against AirBnB is so silly -- no matter how you slice it it's always a minor factor in self-inflicted "housing crisis" scenarios.

Airbnb distorts the value of the land, which has broader implications than just the literal 31k units that these researchers identified.

By how much? More importantly, how much compared to the distortion caused by Canada's zoning/housing policies?

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!

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

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”.

It's not "some" construction though.

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.

As a counter-point, I lived in AirBnBs for over two years in places ranging from Morocco to France to Bulgaria, and had an almost universally positive experience.

I live next to an Airbnb that constantly has new people coming through and occasionally some music and I don’t have any problem with it. None of my neighbours have complained either and I know quite a few of them in the 3yrs I’ve lived here.

I guess your experience may vary depending on what type of place you have and what type of owner of the unit. It’s really not hard to filter out the idiots with the review system.

The people who I have met waiting for the elevator were always super polite when I see them and our walls are thick enough with concrete where I don’t hear the music unless I’m close to my living room wall, which is far from my bedroom.

The owner of the unit, an older retiree from the area with just the one unit AFAIK, was very polite and open about it too and gave me his number in case I had any problems (which I’ve never used). But 99% of them seem to be European or Chinese travellers, who at most occasionally need some help with our complicated fob system. It’s only rarely young people who are partying and if it is it’s always the weekend where I’m more tolerant.

Plus I’ll never forget how Airbnb saved me when I flew into SF last minute as a 20yr old and the only option was a $500 hotel or not sleeping that night, because my prior arrangement with someone fell through when they were unexpectedly out of town. I was fortunate to find an Airbnb guy who accepted my request at 9pm after I got out of the BART with a dying phone. I was literally preparing to spend the night in a park with my luggage. So I’m a bit biased regarding Airbnb and the alternate options without it (which no one seems to offer or care about in their calls to ban it).

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.

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

"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.

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?

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

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?

It creates an economic(and tax revenue) downward spiral in an area if it becomes a significant percentage of vacation rentals.

Real estate isn't really that controlled by market forces. Its a means to an end and pricing does not actually represent best utility.

>that suggests short term rentals are the highest value use of that property.

that's undeniably true for all property in most places that have any tourism value, but it's a short-term value akin to "if we light this city on fire, we can probably make a lot of money selling tickets to watch it".

People also have to live in the city for it to have any value as a tourism destination. If an apartment can host a hundred visitors a year but there's no service industry staff living within 50km because all their houses have been converted to AirBnB's, your tourism industry is going to collapse.

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.

> 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.

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.

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

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

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.

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!

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.

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.

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.

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.

my friend just a year out of undergrad started a short term rental management company here in toronto and its crazy how much money comes thru, and ive lived my entire life around one of the wealthiest areas of the country

It's affecting all property types. I know of one street corner where there is one newish townhouse which is a full-time AirBnB, as well as a turn-of-the-century apartment walk-up which is 100% airBnB. There is also a 1970's apartment building where a number of "tenants" sublease their property on AirBnB. I found this all out when I was helping a friend look for a place to stay near the University of Toronto...

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.

The moral dilemma of curtailing dirty money to keep your economy going. Yikes.

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.

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.

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.

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

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...

Most new immigrants don't have a budget to buy a $1M+ home, neither do locals with a $80K median gross household income, so the demand must come from somewhere else.

Pretty much this. Yes absolutely 'everyone wants to be here' but the land valuations are so beyond typical local incomes that it's a weak af explanation.

Your argument holds no water I'm afraid. The same thing is going on elsewhere in the country - Toronto has reached the same expensive real estate levels because it's warm there too?

Any thoughts on Montreal?

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.

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.

> 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.

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.

Anyone have any thoughts on Montreal?

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.

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

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...

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