New report suggests B.C. renters paying 'Airbnb tax' due to market pressures

A team of researchers has crunched the numbers and estimates that British Columbia’s renters are paying roughly 20 per cent more than they otherwise would have due to the impact of short-term rentals.

The McGill study focussed on people renting units on platforms like Airbnb or VRBO as businesses prior to the onset of the COVID-19 pandemic. It concluded that long-term renters were paying significantly more due to the impact of short-term rentals on the market.

The report, titled “The housing impacts of short-term rentals in British Columbia’s regions” was commissioned by the British Columbia Hotel Association.

“When we saw the report, we couldn’t help think that tenants are paying an Airbnb tax right across British Columbia,” said Thorben Wieditz, with the watchdog group Fairbnb, urging the NDP to implement a province-wide, Vancouver-style system. “Municipalities often do not have the resources of the capacity to establish effective regulations.”

The McGill researchers calculate that an extra $2 billion was paid in long-term rents in B.C. between 2016 and 2019. The team also recommends a province-wide approach that includes a requirement for operators to register and places restrictions on the industry to curb soaring housing costs.

In B.C., only Vancouver has limits, requiring registration and a licence and, more importantly, limits listings by requiring them to be at the host’s principal residence for rentals of fewer than 30 days.

The study's authors describe Vancouver's approach as a "Canadian success story" that has resulted in returning hundreds of units to the long-term rental market, and say similar restrictions could have similar results if adopted province-wide.

David Wachsmuth, the lead author and Canada research chair in urban governance and associate professor of urban planning at McGill University, said it's difficult to estimate the current impact of short-term rentals on long-term leases because they need more data, but that after years of suppressed demand during the pandemic, the number of listings is now even higher than it was before.

"It's a bit of a complicated question," he said in an interview with CTV News. "Probably something in the ballpark of 10 to 15 per cent of the rent increases seen in British Columbia in 2022 can be explained by the really rapid return to growth of Airbnb."

Wachsmuth estimates that median leaseholder in Vancouver was paying an extra $20 per month due to short-term rentals last year, which adds up because "that household is still paying all the extra dollars a month that Airbnb drove up their rent in 2017, 2018 and 2019."

The McGill analysis found that year-over-year, there was an increase of 17.8 per cent in the number of listings, and that the short-term rental market is “dominated by commercial operators” rather than homeowners renting out all or part of their primary residences.

In June of this year, they found an average of 28,510 active short-term rental listings in B.C. each day estimating that 16,810 of those units were taken off the long-term market.

Nearly half of the properties they assessed were owned by people with multiple listings, a share they say has been climbing steadily, noting that despite a “massive decline during the pandemic, the market is now at an all-time high and that as of this year “short-term rentals were taking 16,810 housing units off of B.C.’s long-term market.”

The report emphasizes that, “given the severity of BC’s housing crisis, municipalities or the province should strongly consider principal-residence requirements to redirect STR activity from commercial operations to home sharing, and thus relieve pressure on rising rents.”

Airbnb has their own statistics and characterized their hosts as predominantly small-scale, claiming 83 per cent of hosts share just one home and nearly half of them report the income as helping them afford to stay living there.

"The majority of hosts in British Columbia share just one home and the average host operates fewer than 60 nights per year," wrote a spokesperson via email. "While we support sensible short-term regulations, the focus needs to be on building more housing to help address the country’s housing affordability and supply challenges."

Wieditz pointed out than when short-term rentals started, the public generally supported the idea of renting all or part of their home when they went on vacation or had space to spare.

"There's (now) a minority of hosts that operate responsibly and rent out their own place to make some extra money," he said. "But then there a few hosts that operate a portion of the inventory and those are absentee landlords that inadvertently impact the housing market and increase housing costs for everyone else."