Airbnb could pull up to 1% off rental vacancies in Canada’s 3 biggest cities: study
Airbnb could have sapped as many as 31,000 units out of Canada’s rental market in the last year — enough to represent a drag of as much as one percentage point on vacancy rates in each of the country’s three biggest cities.
And it’s a problem that appears to be growing, according to a paper out of McGill University’s School of Urban Planning.
“Through removing housing that would otherwise be available on the long-term rental market, Airbnb is reducing housing supply and, in turn, housing affordability,” researchers found.
WATCH: June 5 — Quebec adopts new Airbnb regulations
The study, which is set to publish in the Canadian Journal of Urban Research, looked at nearly 280,000 Airbnb listings that were active in Canada between September 2016 and December 2018.
Researchers analyzed “frequently rented entire-home listings” (FREH) — housing units that were available for rent for at least half the year (183 nights) and actually rented for at least 90 of those nights. Basically, housing units that couldn’t possibly have been rented out long term.
They found 31,100 frequently rented entire-home listings over the past year, a number that had grown 40 per cent from the previous one.
Of those units, about 1,700 were located in the city of Vancouver, which had over 150,750 renter households in the 2016 census — the last year for which those statistics are available.
Those numbers suggest FREHs constituted a 1.13 per cent share of the city’s private renter households — higher than the total vacancy rate reported by CMHC.
WATCH: Dec. 4, 2018 — Tourism Vancouver partners with Airbnb
Meanwhile, in the city of Toronto, researchers found about 4,200 frequently rented entire homes on Airbnb in the past year, in a city with 525,835 renter households. That represents a share of about 0.8 per cent — close to the CMHC vacancy rate of 1.1 per cent.View link »
Montreal had 4,100 such listings on Airbnb, in a city of 493,365 renter households. There, the share was about 0.8 per cent, in a place with a CMHC vacancy rate of two per cent.
To put it more simply:
City of Vancouver
Airbnb share of total 2016 renter households: 1.13 per cent
CMHC vacancy rate (2018): 0.8 per cent
City of Toronto
Airbnb share of total 2016 renter households: 0.8 per cent
CMHC vacancy rate (2018): 1.1 per cent
City of Montreal
Airbnb share of total 2016 renter households: 0.83 per cent
CMHC vacancy rate (2018): 2 per cent
CMHC vacancy rates don’t necessarily provide an apples-to-apples comparison — those rates are counted by looking only at apartment structures in the fall, while the Airbnb units in the McGill study could encompass anything from condos to single-family homes.
Nevertheless, those are big numbers, said study author David Wachsmuth, an assistant professor at McGill.
“The bottom line is they’re very significant,” he said.
“You’ve got less than a few thousand apartments actually available for somebody to live in at a given moment.”
If Vancouver alone managed to put its 1,700 Airbnb units on the long-term rental market, “you’re looking at something like doubling the rental vacancy rate in the short term,” Wachsmuth asserted.
“It wouldn’t structurally double it for the rest of time, but you would have a major impact on people’s ability to find an apartment.”
WATCH: Dec. 5, 2018 — New Airbnb rules coming to Calgary
Airbnb challenged the study’s findings in a lengthy statement to Global News.
Spokesperson Alexandra Dagg said the research depended on “scraped data from our public site,” which she said can lead to “faulty assumptions.”
“Without all the information, faulty assumptions are made about our hosts and how they use our platform,” she said.
A host can, for example, block off a calendar at any time, potentially leading a researcher to think a listing has been booked — and that’s not always the case, Airbnb said.
Doing this can skew the data on how many nights for which a host has listed a property, and lead to misconceptions about whether a host is a commercial operator, the company added.
WATCH: March 7 — Nova Scotia moves to regulate short-term rentals
Wachsmuth said these concerns arise “all the time” when it comes to studying Airbnb, and that there’s “technical truth” in the company’s statement.
He and his research teams have never said they know precisely what’s happening on a given night in an Airbnb listing, he asserted.
But he added that they do have data suggesting aggregate trends in specific areas.
The research team on the study derived its data from AirDNA, a consulting firm that obtained it by performing daily scrapes of Airbnb’s public website.
That firm, Wachsmuth said, correlates listings with factors such as the reviews they’re receiving online, so that researchers know on an “aggregate basis” what’s happening in an area.
“One thing we never do, we never say: I can tell you exactly what happened on this property on this day,” Wachsmuth told Global News.
Airbnb also accused Wachsmuth of bias, noting that he has published “multiple studies that were funded by the corporate hotel lobby” and that he spoke at an “anti-Airbnb conference” in New York.
Wachsmuth did, indeed, speak at a conference titled ReformBNB that was billed as “the first international conference on illegal short-term rentals.”
Wachsmuth responded to Airbnb’s statement by saying that his latest study was funded by the federal government and that it was “independent, peer-reviewed research.”
WATCH: Sept. 1, 2018 — New short-term rentals licensing rules now in effect in Vancouver
He also said he’s done consulting with various parties, such as municipal and provincial governments, as well as a real estate group in Florida and with hotel workers in New York.
Wachsmuth said he understands why Airbnb would say that about him, but he added that their statement “doesn’t square with the facts here.”
“The kind of research we do is broadly in line with every other academic that looks at this stuff,” he said.
Wachsmuth’s paper noted 10 other studies that have drawn similar conclusions about the growth of short-term rentals.
One of them, published in the Harvard Law and Policy Review, found that Airbnb “brings an increasing number of the 45 million tourists who visit Los Angeles each year into direct competition with renters, distorting the housing market.”
Andy Yan, head of the city program at Simon Fraser University, read Wachsmuth’s latest study and agreed that the numbers were “significant,” given a “very tight rental market” in Vancouver.
While he noted that the research didn’t divide up listings by housing type, he said the study “highlights the precarity of the rental stock that’s dependent on condominiums.”
Removing a single percentage point from vacancy rates in cities like Vancouver, Toronto and Montreal, he said, is “significant, especially if you’re looking for a place to rent.”
WATCH: Feb. 7, 2018 — B.C. government reaches precedent-setting deal with Airbnb
“This is just a start, and I think it’s a very healthy start in that type of conversation,” Yan said.
And the study is consistent with findings about Airbnb in cities like San Francisco and Berlin, he added.
Tsur Somerville, a UBC business professor who studies housing, said it’s “useful to say this many units are being used by Airbnb, and therefore are not full-time rental use.”
He noted, however, that there are “renters who sublease their units on Airbnb,” and that studying the issue can become complicated when it comes to drilling down on specifics like that.
However, like Yan and Wachsmuth, he noted other research that has come to similar conclusions about Airbnb.
“We have a bunch of papers from places all around the world that suggest higher rates of Airbnb lower the overall supply of long-term units and raise rents,” Somerville said.
“The presence of Airbnb in significant numbers… is going to be associated with worsening conditions for people who are looking for long-term rental units.”
© 2019 Global News, a division of Corus Entertainment Inc.