Canada's Condominium Magazine

“Short term cities”: new report from McGill indicates top 1 percent of short term renters growing (Airbnb) taking in $51.7 million annually

$51.7 million of income was earned by the top 1 percent of “hosts” out of a total revenue of $430 million last year for the cities of Toronto, Montreal and Vancouver. Some of these full-time entire home “hosts” have hundreds of properties listed on Airbnb. The claim was rejected by Airbnb (see below.) 

In other words, 12 percent of short-term rental income was earned by 1 percent of hosts — who are mostly commercial ventures (or multiple property owners) according to a new draft report.

The lead author, Professor David Wachsmuth, said, “More and more of the money is being earned by a smaller and (a) more kind of commercialized and sophisticated, large-scale set of hosts,” as quoted in The Star. [2]  The largest host in Toronto had 128 listings and earned $1.34 million on Airbnb, said the report. Also cited were the top five Airbnb listings, pulling in an average of $145,000 each annually.

According to The Star, this represents “14,000 entire homes, including condo units” taken off the long term rental market for residents of these cities. “Every home that is converted to full-time Airbnb use is subtracted from the pool of actual potential long-term rental housing units in a city,” according to the draft report. [2]

Note: New rules proposed in Toronto and Vancouver will impose a one-host-one-home regulation together with additional fees.

 

Report: full-time short term listings up 100 percent in Toronto

McGill University School of Urban Planning released a draft report (currently under peer review) indicating that the short-term rental market (primarily Airbnb) is dominated by corporate or commercial ventures rather than individuals.[1] In three cities studied (including Toronto), full-time entire-home listings represented 6,500 properties, up 100 percent in Toronto from May 2016 to 2017. [2]

The report, titled “Short term Cities: Airbnb’s Impact on Canadian Housing Markets” comparatively analysed short-term rentals in the three subject cities based on data from Airdna. (Airdna is a company tracking Airbnb listing performance.) Additional data were derived from 2016 and 2011 census and also the Canada Mortgage and Housing Corporation’s “rental market survey.”

The report concluded: “These aren’t . . . people who own their house and they’re renting it out on the weekend when they’re gone.” [2]

According to the Star, Airbnb spokesperson Lindsey Scully “rejected the report’s conclusions.”[2] She indicated that the author of the study “has a history of manipulating scraped data.” She specified:

“The fact is, just 760 Airbnb entire home listings, or 0.07 per cent of the entire housing stock in Toronto, are rented frequently enough to out-compete a long-term rental, undercutting the author’s baseless conclusions about housing units removed.”

The report disagrees (it is currently draft, under peer review) citing:

  • converted to full-time Airbnb usage increased from 9,000 to 14,000 in the three cities studied, growing 25 percent faster than other types of listings

Short term rentals issue

Short-term rentals remains a difficult issue for urban planners, the City of Toronto in particular, with a shortage of long-term rental units for residency. On one hand Airbnb facilities individual owners earning rental income. On the other, depending on the special interest involved, there are many issues yet to be managed:

  • For the resident renter: a shortage of rental units, as condo-owners and homeowners leverage short term rentals for extra income. This creates pressure on rental costs upwards, and means many people, desperate for homes, are left out of the market.
  • For condominium communities, the influx of constantly new people, overnight guests, tourists who treat the rental units as hotel rooms. Issues include noise complaints, security concerns, the impact to resale value, and so on.
  • For home owners (in detached home neighbourhoods), similar issues, perhaps not as overt.
  • For hotel industry: commercial entities renting short term compete with hotels, but without the restrictions, taxes and costs of a hotel
  • For the city: a legislative and enforcement nightmare.

 

 

NOTES

[1] Draft report: Short-term Cities: Airbnb’s Impact on Canadian Housing Markets, McGill University School of Urban Planning

[2] As reported in Toronto Star Aug 4, 2017 “Large commercial operators a growing concern in the Airbnb market”

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