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Vancouver eyeballs Airbnb as rental properties snapped up

Short-term rentals target tourists, leaving fewer homes on the market for local residents
Short-term rentals offer advantages for travellers, but there can be drawbacks for neighbours.

Cities from Santa Monica to Paris are jumping to curb the impact of Airbnb on housing affordability. Some are budgeting hundreds of thousands of dollars to identify properties being offered to tourists and return them to the rental pool for local residents.

Airbnb has become the granddaddy of sites used by homeowners to make money by renting out their entire home, or even a single bedroom (either private or shared).

At the end of June, the San Francisco-based company closed a round of $1.5 billion in private funding from hedge funds, mutual funds and private investors for a valuation of $25.5 billion, making it worth more than some of the largest hotel chains.

Critics fear the service is gobbling up listings from local rental markets, tightening accommodation supplies and leading to higher rental prices.

In Vancouver, where the vacancy rate is low and discussions about affordability are fever-pitched, city officials say they are in the early stages of reviewing “actions taken by other cities,” said chief licence inspector Andreea Toma.

During the summer of 2009, only 144 guests used Airbnb to secure a place to stay in Paris. Last year, this number rose to 517,821, according to numbers released by the company.

In one snapshot of the Paris neighbourhood of Le Marais, the number of tourists renting homes through Airbnb outstripped the number of local residents.

“This is astounding and alarming, and perhaps a bit of a warning,” said Karen Sawatzky, a Simon Fraser University masters student who has been researching the impact of short-term rentals listed on Airbnb on housing affordability in this city.

“Vancouver doesn’t draw quite the tourist crush Paris does,” said Sawatzky, but Airbnb listings are on the rise and this June, she counted 3,473.

Some of this explosion has happened due to Airbnb users evolving beyond individual homeowners who occasionally rent out their properties to include investment and management companies.

In Paris, one of the “most prolific hosts” advertises more than 200 apartments, according to the Wall Street Journal.

In Vancouver, Sawatzky found that 1,215 — or 35 per cent of the total listings — are in the hands of just 381 hosts.

Indeed, there are many hosts on the Vancouver site such as Catherine, with only a single listing, a “cozy room near a scenic park” on East 39th Avenue.

But there are also some hosts with a slew of them: Andrew, for example, has 30 condos mostly located downtown. He asks for a minimum three-night stay and charges from $99 to $200 per night.

Another, Nicole, who posts: “We travel often, we love sharing our homes with people from all over the globe, making new friends and memories,” has 16 listings, including a cluster of condos in Yaletown.

Kelly is a host with 22 listings being offered for a minimum 5-day stay. They are mostly condos and a duplex scattered across False Creek, Kitsilano, Marpole, Richmond and Burnaby that are managed by Suite Living Furnished Accommodations, an East Vancouver-based company on Renfrew Street run by Lisa Chan.

The Vancouver Sun spoke to Chan, but she declined to comment.

Another Airbnb host, who goes by the name DreamRentals, posts: “We manage over 70 luxury suites.” It currently has 47 entire home listings on Airbnb.

Sawatzky, the SFU researcher, calculated that as many as 71 per cent of Airbnb listings in Vancouver are for entire homes as opposed to a single room.

She said some of these owners might be hoping to rent out their homes while away on vacation, but believes the figure suggests a high number of units that could, but aren’t, being offered to full-time tenants. In the downtown core, she found this figure was even higher, at 82 per cent.

Numbers like this have prompted other cities to be more explicit in curbing Airbnb.

In Paris, officials are making door-to-door raids to fine illegal rentals.

Quebec is planning to require homeowners to pay the same taxes and follow the same rules as hotels.

In Santa Monica, city officials recently designated a budget of $410,000 in their first year of running a department to specifically patrol short-term rentals. Starting a few weeks ago, property owners and residents cannot rent their places unless they stay in the unit with their guests. This means they cannot rent out their units if they are going away on vacation.

Santa Monica estimates this will make about 1,400, or 80 per cent, of the listings on home-sharing sites like Airbnb illegal, according to assistant planning director Salvador Valles.

He said to back up the new ordinance, the city has hired a full-time analyst and will bring on two full-time enforcement officers to physically look at photos and knock on doors to find people breaking the law, even though there will be an initial grace period this summer to allow for tourists who had already secured bookings.

This shift from an approach based on complaints to a more proactive one is key, said Valles.

“Resources are (needed) if the goal is to return these units to the long-term rental market,” he said.

In February, San Francisco brought in a new law requiring that hosts must be permanent residents who register in-person with the city. It also restricted entire-unit rentals to 90 days a year.

Now it is also creating a dedicated short-term rental enforcement office with six staff and a $900,000 budget, partly funded by a $50 fee that registered hosts pay every two years, plus a 14-per-cent hotel tax.

Back in Vancouver, homeowners already — by law at least — cannot rent out their space for less than a period of one month unless they are part of a hotel or have a license to run a bed and breakfast operation.There were only 58 registered B&Bs in Vancouver in 2014.

For now, the City said it uses a number of inspection and bylaw tools to ensure renters’ rights are being adhered to with respect to Airbnb.

“City staff continue to monitor to ensure that rental properties do not violate the bylaws on short-term accommodation,” said Toma.

“If a complaint is received, the City will follow up with registered owners to warn them that short-term rentals are not an approved use.

For its part, Airbnb’s Canada country manager Aaron Zifkin said in a statement it’s “meeting with leaders and community members in cities around the world, including Vancouver, and we’re confident that as they learn more about the sharing economy, they too will draft and pass policies that protect the public interest and ensure the sharing economy continues to thrive.”