While occasionally sharing your home on platforms like Airbnb can create a win-win for guests and your bank account, things get dicey when housing units are fully converted into short term rentals (STRs). Why? Because the switch to STRs makes long-term housing harder to find and more expensive – a growing trend in communities big and small across Canada.
That’s why Gen Squeeze, with support from the Federation of Canadian Municipalities, the Real Estate Foundation of BC, LandlordBC, Vancouver Foundation and Granicus, has launched a new toolkit that helps communities effectively regulate STRs.
The toolkit offers key insights for community members and local decision makers on the impacts of short term rentals and how to better manage them. Here are five big ones:
STR business is booming. An estimated $1.8 billion in revenue was generated by Airbnb operators in Canada in 2018 – up 40% from the previous year. Over the same period the number of individual listings grew an average of 19% nationwide, with small and rural communities showing the fastest growth (more than 40%).
Commercial STRs create the most impacts. The rapid rise of STRs, and their effects on communities and housing affordability, is mostly because of a shift from home sharing to commercial operations. In places like Toronto, Edmonton, Ottawa-Gatineau, Moncton and Halifax, close to 50% of all STRs are managed by multi-listing (commercial) operators.
STRs make housing more expensive and harder to find, especially commercial STRs. Across Canada in 2018, an estimated 31,000 potential homes were lost to commercial STR activity. But there’s also lots of local variability. For example, 18% of all housing units in Tofino, BC were used as STRs in 2018, compared to 0.5% in Lethbridge, Alberta.
Covid won’t make these impacts go away. A recent study across 27 global markets covering the first half of 2020 showed only a modest 4.5% drop in overall STR revenue compared to the previous year. Zooming in, it's clear that some cities are experiencing more drastic decreases, while many regional markets are booming.
- Most local governments aren’t specifically regulating STRs. Some have adapted existing bylaws that tackle certains aspects of STR but leave other impacts untouched, while others have banned them outright without proactive enforcement. Other municipalities are in the process of studying or developing regulations, but haven’t yet finished.
Short story: there’s a need for more and better regulation guided by best practices. Based on input from hundreds of local governments and a review of recent research on STRs, this toolkit gives local governments and communities the resources they need to do it by outlining:
- Current trends in short term rentals in Canada, including the shift from home sharing to commercial operations
- The impacts of STRs on communities, including benefits and harms
- Regulatory best practices and tools, based on input from hundreds of local governments and stakeholders
- Provincial and federal policies that could help make STR regulations more effective and consistent across the country
Over the next several months, Gen Squeeze will focus on getting this toolkit into the hands of local government staff and elected officials across BC and Canada, and offering one-on-one support to those who could use it. This work is all part of Gen Squeeze’s gameplan to make sure everyone, whether they’re renters or owners, can afford a home that suits their needs by 2030.
All communities facing housing pressures need to have this issue on their radar and a plan to assess it, alongside efforts by higher levels of government too.
A big thanks to:
The hundreds of local governments, stakeholders and advisors from across Canada whose input shaped the development of this toolkit, and to the funders who made this work possible: